10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________

FORM 10-K

(Mark One)

xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2015

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number: 001-34855

______________________________

WHITESTONE REIT

(Exact Name of Registrant as Specified in Its Charter)

Maryland	76-0594970
(State or Other Jurisdiction of Incorporation or	(I.R.S. Employer
Organization)	Identification No.)
2600 South Gessner, Suite 500, Houston, Texas	77063
(Address of Principal Executive Offices)	(Zip Code)

Registrant's telephone number, including area code: (713) 827-9595

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Shares of Beneficial Interest, par value $0.001 per share	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer oAccelerated filer xNon-accelerated filer oSmaller reporting company o

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

The aggregate market value of the common shares held by nonaffiliates of the registrant as of June 30, 2015 (the last business day of the registrant's most recently completed second fiscal quarter) was $344,674,385.

As of February 26, 2016, the registrant had 27,004,048 common shares of beneficial interest, $0.001 par value per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: We incorporate by reference in Part III of this Annual Report on Form 10-K portions of our definitive proxy statement for our 2016 Annual Meeting of Shareholders, which proxy statement will be filed no later than 120 days after the end of our fiscal year ended December 31, 2015.

WHITESTONE REIT

FORM 10-K

Year Ended December 31, 2015

Page
PART I
	Item 1.	Business.	1
	Item 1A.	Risk Factors.	5
	Item 1B.	Unresolved Staff Comments.	19
	Item 2.	Properties.	19
	Item 3.	Legal Proceedings.	26
	Item 4.	Mine Safety Disclosures.	26

PART II
	Item 5.	Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities.	27
	Item 6.	Selected Financial Data.	30
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	32
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	60
	Item 8.	Financial Statements and Supplementary Data.	60
	Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	60
	Item 9A.	Controls and Procedures.	60
	Item 9B.	Other Information.	61

PART III
	Item 10.	Trustees, Executive Officers and Corporate Governance.	62
	Item 11.	Executive Compensation.	62
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters.	62
	Item 13.	Certain Relationships and Related Transactions, and Director Independence.	62
	Item 14.	Principal Accountant Fees and Services.	62

PART IV
	Item 15.	Exhibits and Financial Statement Schedules.	63
		SIGNATURES.	64

Unless the context otherwise requires, all references in this report to the “Company,” “we,” “us” or “our” are to Whitestone REIT and its consolidated subsidiaries.

Forward-Looking Statements

The following discussion should be read in conjunction with our audited consolidated financial statements and the notes thereto in this Annual Report on Form 10-K. 

This Annual Report on Form 10-K contains forward-looking statements within the meaning of the federal securities laws, including discussion and analysis of our financial condition, anticipated capital expenditures required to complete projects, amounts of anticipated cash distributions to our shareholders in the future and other matters. These forward-looking statements are not historical facts but are the intent, belief or current expectations of our management based on its knowledge and understanding of our business and industry. Forward-looking statements are typically identified by the use of terms such as “may,” “will,” “should,” “potential,” “predicts,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates” or the negative of such terms and variations of these words and similar expressions, although not all forward-looking statements include these words. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements.

Forward-looking statements that were true at the time made may ultimately prove to be incorrect or false. You are cautioned not to place undue reliance on forward-looking statements, which reflect our management’s view only as of the date of this Annual Report on Form 10-K. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results. Factors that could cause actual results to differ materially from any forward-looking statements made in this Annual Report on Form 10-K include:

• the imposition of federal taxes if we fail to qualify as a real estate investment trust (“REIT”) in any taxable year or forego an opportunity to ensure REIT status;

• uncertainties related to the national economy, the real estate industry in general and in our specific markets;

• legislative or regulatory changes, including changes to laws governing REITs;

• adverse economic or real estate developments or conditions in Texas, Arizona or Illinois;

• increases in interest rates and operating costs;

• availability and terms of capital and financing, both to fund our operations and to refinance our indebtedness as it matures;

• decreases in rental rates or increases in vacancy rates;

• litigation risks;

• lease-up risks, including leasing risks arising from exclusivity and consent provisions in leases with significant tenants;

• our inability to renew tenants or obtain new tenants upon the expiration of existing leases;

• our inability to generate sufficient cash flows due to market conditions, competition, uninsured losses, changes in tax or other applicable laws; and

• the need to fund tenant improvements or other capital expenditures out of operating cash flow.

The forward-looking statements should be read in light of these factors and the factors identified in the “Risk Factors” section of this Annual Report on Form 10-K.

PART I

Item 1.  Business.

General

We are a Maryland Real Estate Investment Trust (“REIT”) engaged in owning and operating commercial properties in culturally diverse markets in major metropolitan areas. Founded in 1998, we changed our state of organization from Texas to Maryland in December 2003.  We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”).

We are internally managed and, as of December 31, 2015, we owned a real estate portfolio of 70 properties containing approximately 6.0 million square feet of gross leasable area (“GLA”), located in Texas, Arizona and Illinois.  Our property portfolio has a gross book value of approximately $836 million and book equity, including noncontrolling interests, of approximately $247 million as of December 31, 2015.

Our common shares of beneficial interest, par value $0.001 per share, are traded on the New York Stock Exchange (the “NYSE”) under the ticker symbol “WSR.”  Our offices are located at 2600 South Gessner, Suite 500, Houston, Texas 77063.  Our telephone number is (713) 827-9595 and we maintain a website at www.whitestonereit.com. The contents of our website are not incorporated into this filing.

Our Strategy

In October 2006, our current management team joined the Company and adopted a strategic plan to acquire, redevelop, own and operate Community Centered Properties™. We define Community Centered Properties™ as visibly located properties in established or developing culturally diverse neighborhoods in our target markets. We market, lease and manage our centers to match tenants with the shared needs of the surrounding neighborhood. Those needs may include specialty retail, grocery, restaurants and medical, educational and financial services. Our goal is for each property to become a Whitestone-branded business center or retail community that serves a neighboring five-mile radius around our property. We employ and develop a diverse group of associates who understand the needs of our multicultural communities and tenants.

Our primary business objective is to increase shareholder value by acquiring, owning and operating Community Centered Properties™. The key elements of our strategy include:

• Strategically Acquiring Properties.

◦ Seeking High Growth Markets. We seek to strategically acquire commercial properties in high-growth markets. Our acquisition targets are located in densely populated, culturally diverse neighborhoods, primarily in and around Austin, Chicago, Dallas-Forth Worth, Houston, Phoenix and San Antonio.

◦ Diversifying Geographically. Our current portfolio is concentrated in Houston and Phoenix. We believe that continued geographic diversification in markets where we have substantial knowledge and experience will help offset the economic risk from a single market concentration. We intend to continue to focus our expansion efforts on the Austin, Chicago, Dallas-Fort Worth, Houston, Phoenix and San Antonio markets. We believe our management infrastructure and capacity can accommodate substantial growth in those markets. We may also pursue opportunities in other regions that are consistent with our Community Centered Property™ strategy. Markets in which we have developed some knowledge and contacts include Orlando, Florida and Denver, Colorado, both of which have economic, demographic and cultural profiles similar to our Arizona and Texas markets.

◦ Capitalizing on Availability of Reasonably Priced Acquisition Opportunities. We believe that currently and during the next several years there will continue to be excellent opportunities in our target markets to acquire quality properties at historically attractive prices. We intend to acquire assets in off-market transactions negotiated directly with owners or financial institutions holding foreclosed real estate and debt instruments that are either in default or on bank watch lists. Many of these assets may benefit from our Community Centered Property™ strategy and our management team’s experience in turning around distressed properties, portfolios and companies. We have extensive relationships with community banks, attorneys, title companies and others in the real estate industry with whom we regularly work to identify properties for potential acquisition.

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• Redeveloping and Re-tenanting Existing Properties. We have substantial experience in repositioning underperforming properties and seek to add value through renovating and re-tenanting our properties to create Whitestone-branded Community Centered Properties™. We seek to accomplish this by (1) stabilizing occupancy, with per property occupancy goals of 90% or higher; (2) adding leasable square footage to existing structures; (3) developing and building new leasable square footage on excess land; (4) upgrading and renovating existing structures; and (5) investing significant effort in recruiting tenants whose goods and services meet the needs of the surrounding neighborhood.

• Recycling Capital for Greater Returns. We seek to continually upgrade our portfolio by opportunistically selling properties that do not have the potential to meet our Community Centered Property™ strategy and redeploying the sale proceeds into properties that better fit our strategy. Some of our properties that we owned at the time our current management team assumed the management of the Company (the “Legacy Portfolio”) may not fit our Community Centered Property™ strategy, and we may look for opportunities to dispose of these properties as we continue to execute our strategy. For example, in December 2014, we sold three suburban office properties in Clear Lake, Texas that were part of the Legacy Portfolio.

• Prudent Management of Capital Structure. We currently have 50 properties that are unencumbered. We may seek to add mortgage indebtedness to existing and newly acquired unencumbered properties to provide additional capital for acquisitions. As a general policy, we intend to maintain a ratio of total indebtedness to undepreciated book value of real estate assets that is at or less than 60%. As of December 31, 2015, our ratio of total indebtedness to undepreciated book value of real estate assets was 60%.

• Investing in People. We believe that our people are the heart of our culture, philosophy and strategy. We continually focus on developing associates who are self-disciplined and motivated and display, at all times, a high degree of character and competence. We provide them with equity incentives to align their interests with those of our shareholders.

Our Structure

Substantially all of our business is conducted through Whitestone REIT Operating Partnership, L.P., a Delaware limited partnership organized in 1998 (the “Operating Partnership”).  We are the sole general partner of the Operating Partnership.  As of December 31, 2015, we owned a 98.2% interest in the Operating Partnership.

As of December 31, 2015, we owned a real estate portfolio consisting of 70 properties located in three states.  The aggregate occupancy rate of our total portfolio was 87% based on gross leasable area as of both December 31, 2015 and 2014.

We are hands-on owners who directly manage the operations and leasing of our properties.  Substantially all of our revenues consist of base rents received under varying term leases.  For the year ended December 31, 2015, our total revenues were approximately $93.4 million.  

Our largest property, Village Square at Dana Park (“Dana Park”), a retail community purchased on September 21, 2012 and located in the Mesa submarket of Phoenix, Arizona, accounted for 8.0% of our total revenue for the year ended December 31, 2015. Dana Park also accounted for 6.7% of our real estate assets, net of accumulated depreciation, for the year ended December 31, 2015. Of our 70 properties, 30 and 25 are located in the Houston, Texas and Phoenix, Arizona metropolitan areas, respectively.

Economic Environment

The recent challenging economic conditions continue to negatively impact the volume of real estate transactions, occupancy levels and tenants’ ability to pay rent. Moreover, low interest rates and desire for higher yielding investments with moderate risk has resulted in lower capitalization rates and higher prices for commercial real estate acquisitions. Each of these factors could negatively impact the value of public real estate companies, including ours.  However, the majority of our retail properties are located in densely populated metropolitan areas and are occupied by tenants that generally provide basic necessity-type items and services which have tended to be less affected by economic changes.  Furthermore, a substantial portion of our portfolio is in metropolitan areas in Texas that have been impacted less by the economic slowdown compared to other metropolitan areas.

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Competition

All of our properties are located in areas that include competing properties.  The amount of competition in a particular area could impact our ability to acquire additional real estate, sell current real estate, lease space and the amount of rent we are able to charge.  We may be competing with owners, developers and operators, including, but not limited to, real estate investors, other REITs, insurance companies and pension funds.

Should we decide to dispose of a property, we may compete with third-party sellers of similar types of commercial properties for suitable purchasers, which may result in our receiving lower net proceeds from a sale or in our not being able to dispose of such property at a time of our choosing due to the lack of an acceptable return. In operating and managing our properties, we compete for tenants based upon a number of factors including, but not limited to, location, rental rates, security, flexibility, expertise to design space to meet prospective tenants' needs and the manner in which the property is operated, maintained and marketed. We may be required to provide rent concessions, incur charges for tenant improvements and other inducements, or we may not be able to timely lease vacant space, all of which could adversely impact our results of operations.

Many of our competitors have greater financial and other resources than us and also may have more operating experience. Generally, there are other neighborhood and community retail centers within relatively close proximity to each of our properties. There is, however, no dominant competitor in the Austin, Chicago, Dallas-Fort Worth, Houston, Phoenix and San Antonio metropolitan areas. Our retail tenants also face increasing competition from outlet malls, internet retailers, catalog companies, direct mail and telemarketing.

Compliance with Governmental Regulations

Under various federal and state environmental laws and regulations, as an owner or operator of real estate, we may be required to investigate and clean up certain hazardous or toxic substances, asbestos-containing materials, or petroleum product releases at our properties. We may also be held liable to a governmental entity or to third parties for property damage and for investigation and cleanup costs incurred by those parties in connection with any such contamination. In addition, some environmental laws create a lien on a contaminated site in favor of the government for damages and costs the government incurs in connection with contamination on the site. The presence of contamination or the failure to remediate contamination at any of our properties may adversely affect our ability to sell or lease the properties or to borrow using the properties as collateral. We could also be liable under common law to third parties for damages and injuries resulting from environmental contamination coming from our properties.

We will not purchase any property unless we are generally satisfied with the environmental status of the property. We typically obtain a Phase I environmental site assessment for each new acquisition, which includes a visual survey of the building and the property in an attempt to identify areas of potential environmental concerns, visually observing neighboring properties to assess surface conditions or activities that may have an adverse environmental impact on the property, and contacting local governmental agency personnel and performing a regulatory agency file search in an attempt to determine any known environmental concerns in the immediate vicinity of the property. A Phase I environmental site assessment does not generally include any sampling or testing of soil, groundwater or building materials from the property.

We believe that our properties are in compliance in all material respects with all applicable federal, state and local laws and regulations regarding the handling, discharge and emission of hazardous or toxic substances. Because release of chlorinated solvents can occur as a result of dry cleaning operations, we participate in the Texas Commission on Environmental Quality Dry Cleaner Remediation Program (“DCRP”) with respect to four of our properties that currently or previously had a dry cleaning facility as a tenant. The DCRP administers the Dry Cleaning Remediation fund to assist with remediation of contamination caused by dry cleaning solvents.

We have not been notified by any governmental authority, and are not otherwise aware of any material noncompliance, liability or claim relating to hazardous or toxic substances in connection with any of our present or former properties. Nevertheless, it is possible that the environmental assessments conducted thus far and currently available to us do not reveal all potential environmental liabilities. It is also possible that subsequent investigations will identify material contamination or other adverse conditions, that adverse environmental conditions have arisen subsequent to the performance of the environmental assessments, or that there are material environmental liabilities of which management is unaware.

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Under the Americans with Disabilities Act (“ADA”), all places of public accommodation are required to meet certain federal requirements related to access and use by disabled persons. Our properties must comply with the ADA to the extent that they are considered “public accommodations” as defined by the ADA. The ADA may require removal of structural barriers to access by persons with disabilities in public areas of our properties where such removal is readily achievable. We believe that our properties are in substantial compliance with the ADA and that we will not be required to make substantial capital expenditures to address the requirements of the ADA. In addition, we will continue to assess our compliance with the ADA and to make alterations to our properties as required.

Employees

As of December 31, 2015, we had 95 employees.

Materials Available on Our Website

Copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports, proxy statements with respect to meetings of our shareholders, as well as Reports on Forms 3, 4 and 5 regarding our officers, trustees or 10% beneficial owners, filed or furnished pursuant to Section 13(a), 15(d) or 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available free of charge through our website (www.whitestonereit.com) as soon as reasonably practicable after we electronically file the material with, or furnish it to, the Securities and Exchange Commission (“SEC”).  We have also made available on our website copies of our Audit Committee Charter, Compensation Committee Charter, Nominating and Governance Committee Charter, Corporate Governance Guidelines, Insider Trading Compliance Policy, and Code of Business Conduct and Ethics Policy.  In the event of any changes to these documents, revised copies will also be made available on our website.  You may also read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549.  Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. The SEC also maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC as we do. The website address is http://www.sec.gov. Materials on our website are not part of our Annual Report on Form 10-K. The contents of these websites are not incorporated into this filing.

Financial Information

Additional financial information related to the Company is included in Item 8 “Financial Statements and Supplementary Data.”

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Item 1A.  Risk Factors.

In addition to the other information contained in this Annual Report on Form 10-K, the following risk factors should be considered carefully in evaluating our business.  Our business, financial condition, results of operations or the trading price of our common shares could be materially adversely affected by any of these risks.  Please note that additional risks not presently known to us or which we currently consider immaterial may also impair our business and operations.

Risks Associated with Real Estate

Market disruptions may significantly and adversely affect our financial condition and results of operations.

World financial markets have, from time to time, experienced significant disruption. While many U.S. real estate markets have generally stabilized since the pervasive and fundamental disruptions associated with the last recession, which resulted in increased unemployment, weakening of tenant financial condition, large-scale business failures and tight credit markets, the financial markets have been volatile recently, and oil prices have declined dramatically over the past year. Our results of operations may be sensitive to changes in overall economic conditions that impact tenants of our properties or tenant leasing practices. Adverse economic conditions affecting tenant income, such as employment levels, business conditions, interest rates, tax rates, fuel and energy costs and other matters, could reduce overall tenant leasing or cause tenants to shift their leasing practices. In addition, periods of economic slowdown or recession, rising interest rates or declining demand for real estate, or the public perception that any of these events may occur, could result in a general decline in rents or an increased incidence of defaults under existing leases. Although the U.S. economy generally appears to have emerged from the worst aspects of the last recession, high levels of unemployment have persisted, and rental rates and valuations for retail space have not fully recovered to pre-recession levels and may not for a number of years. In addition, financial markets may again experience significant and prolonged disruption, including as a result of unanticipated events, which could adversely affect our tenants and our business in general. For example, a general reduction in consumer spending and the level of tenant leasing could adversely affect our ability to maintain our current tenants and gain new tenants, affecting our growth and profitability. Accordingly, if financial and macroeconomic conditions deteriorate, or if financial markets experience significant disruption, it could have a significant adverse effect on our cash flows, profitability, results of operations and the trading price of our common shares.

Real estate property investments are illiquid due to a variety of factors and therefore we may not be able to dispose of properties when appropriate or on favorable terms.

Our strategy includes opportunistically selling properties that do not have the potential to meet our Community Centered Property™ strategy. However, real estate property investments generally cannot be disposed of quickly. In addition, the Code imposes certain restrictions on the ability of a REIT to dispose of properties that are not applicable to other types of real estate companies. Therefore, we may not be able to vary our portfolio in response to economic or other conditions promptly or on favorable terms, which could cause us to incur extended losses, reduce our cash flows and adversely affect distributions to shareholders.

We cannot predict whether we will be able to sell any property for the price or on the terms set by us or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We also cannot predict the length of time needed to find a willing purchaser and to close the sale of a property. To the extent we are unable to sell any properties for our book value, we may be required to take a non-cash impairment charge or loss on the sale, either of which would reduce our net income.

We may be required to expend funds and time to correct defects or to make improvements before a property can be sold. We cannot assure you that we will have funds available to correct those defects or to make those improvements, which may impede our ability to sell a property. Further, we may agree to transfer restrictions that materially restrict us from selling a property for a period of time or impose other restrictions, such as a limitation on the amount of debt that can be placed or repaid on that property. These transfer restrictions could impede our ability to sell a property even if we deem it necessary or appropriate. These facts and any others that would further contribute to the illiquid character of real estate properties and impede our ability to respond to adverse changes in the performance of our properties may have a material adverse effect on our business, financial condition, results of operations, our ability to make distributions to our shareholders and the trading price of our common shares.

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Our business is dependent upon our tenants successfully operating their businesses, and their failure to do so could have a material adverse effect on our ability to successfully and profitably operate our business.

We depend on our tenants to operate their businesses in a manner that generates revenues sufficient to allow them to meet their obligations to us, including their obligations to pay rent, maintain certain insurance coverage, pay real estate taxes and maintain the properties in a manner so as not to jeopardize their operating licenses or regulatory status. The ability of our tenants to fulfill their obligations under our leases may depend, in part, upon the overall profitability of their operations. Cash flow generated by the businesses of certain tenants may not be sufficient for such tenants to meet their obligations to us. Our financial position could be weakened and our ability to fulfill our obligations under our indebtedness could be limited if a number of our tenants were unable to meet their obligations to us or failed to renew or extend their relationships with us as their lease terms expire, or if we were unable to lease or re-lease our properties on economically favorable terms.

Disruption in capital markets could adversely impact acquisition activities and pricing of real estate assets.

Volatility or other disruption in capital markets could adversely affect our access to or the cost of debt and equity capital, which could adversely affect our acquisition and other investment activities. Disruptions could include price volatility or decreased demand in equity markets, as seen in recent months, tightening of underwriting standards by lenders and credit rating agencies and the significant inventory of unsold collateralized mortgage backed securities in the market. As a result, we may not be able to obtain favorable equity and debt financing in the future or at all. This may impair our ability to acquire properties at favorable returns or adversely affect our returns on investments in development and re-development projects, which may adversely affect our results of operations and distributions to shareholders. Furthermore, any turmoil in the capital markets could adversely impact the overall amount of capital available to invest in real estate, which may result in price or value decreases of real estate assets.

The value of investments in our common shares will be directly affected by general economic and regulatory factors we cannot control or predict.

Investments in real estate typically involve a high level of risk as the result of factors we cannot control or predict. One of the risks of investing in real estate is the possibility that our properties will not generate income sufficient to meet operating expenses or will generate income and capital appreciation, if any, at rates lower than those anticipated or available through investments in comparable real estate or other investments. The following factors may affect income from properties and yields from investments in properties and are generally outside of our control:

• conditions in financial markets;

• over-building in our markets;

• a reduction in rental income as the result of the inability to maintain occupancy levels;

• adverse changes in applicable tax, real estate, environmental or zoning laws;

• changes in general economic conditions or economic conditions in our markets;

• a taking of any of our properties by eminent domain;

• adverse local conditions (such as changes in real estate zoning laws that may reduce the desirability of real estate in the area);

• acts of God, such as hurricanes, earthquakes or floods and other uninsured losses;

• changes in supply of or demand for similar or competing properties in an area;

• changes in interest rates and availability of permanent debt capital, which may render the sale of a property difficult or unattractive; and

• periods of high interest rates, inflation or tight money supply.

Some or all of these factors may affect our properties, which could adversely affect our operations and ability to make distributions to shareholders.

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All of our properties are subject to property taxes that may increase in the future, which could adversely affect our cash flow.

Our properties are subject to property taxes that may increase as property tax rates change and as the properties are assessed or reassessed by taxing authorities. As the owner of the properties we are ultimately responsible for payment of the taxes to the government. If property taxes increase, our tenants may be unable to make the required tax payments, ultimately requiring us to pay the taxes. In addition, we will generally be responsible for property taxes related to any vacant space in our properties.

Our assets may be subject to impairment charges.

We periodically evaluate our real estate investments and other assets for impairment indicators. The judgment regarding the existence of impairment indicators is based on factors such as market conditions, tenant performance and legal structure. If we determine that a significant impairment has occurred, we would be required to make an adjustment to the net carrying value of the asset, which could have a material adverse effect on our results of operations and funds from operations in the period in which the write-off occurs.

Compliance or failure to comply with laws requiring access to our properties by disabled persons could result in substantial cost.

The ADA and other federal, state and local laws generally require public accommodations be made accessible to disabled persons. Noncompliance with these laws could result in the imposition of fines by the government or the award of damages to private litigants. These laws may require us to modify our existing properties, which could require a significant investment of our cash resources that could otherwise be invested in more productive assets. These laws may also restrict renovations by requiring improved access to such buildings by disabled persons or may require us to add other structural features which increase our construction costs. Legislation or regulations adopted in the future may impose further obligations, restrictions or increased compliance costs on us with respect to improved access by disabled persons. We may incur unanticipated expenses that may be material to our financial condition or results of operations to comply with ADA and other federal, state and local laws, or in connection with lawsuits brought by private litigants.

We face intense competition, which may decrease, or prevent increases of, the occupancy and rental rates of our properties.

We compete with a number of developers, owners and operators of commercial real estate, many of whom own properties similar to ours in the same markets in which our properties are located. If our competitors offer space at rental rates below current market rates, or below the rental rates we currently charge our tenants, we may lose existing or potential tenants and we may be pressured to reduce our rental rates below those we currently charge or to offer more substantial rent abatements, tenant improvements, early termination rights or below-market renewal options in order to retain tenants when our tenants' leases expire. This competitive environment could have a material adverse effect on our ability to lease our properties or any newly developed or acquired property, as well as on the rents charged.

Our acquisition strategy includes acquiring distressed commercial real estate, and we could face significant competition from other investors, REITs, hedge funds, private equity funds and other private real estate investors with greater financial resources and access to capital than us. Therefore, we may not be able to compete successfully for investments. In addition, the number of entities and the amount of purchasers competing for suitable investments may increase, all of which could result in competition for accretive acquisition opportunities and adversely affect our business plan and our ability to maintain our current dividend rate.

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Risks Associated with Our Operations

Because a majority of our gross leasable area is in the Houston and Phoenix metropolitan areas, an economic downturn in either area could adversely impact our operations and ability to make distributions to our shareholders.

The majority of our assets and revenues are currently derived from properties located in the Houston and Phoenix metropolitan areas. As of December 31, 2015, 42% and 35% of our gross leasable area was in Houston and Phoenix, respectively. Our results of operations are directly affected by our ability to attract financially sound commercial tenants. A significant economic downturn in the Houston, including as a result of the recent significant decline in oil prices, or Phoenix metropolitan area may adversely impact our ability to locate and retain financially sound tenants, could have an adverse impact on our existing tenants' revenues, costs and results of operations and may adversely affect their ability to meet their obligations to us. Likewise, we may be required to lower our rental rates to attract desirable tenants in such an environment. Consequently, because of the geographic concentration among our current assets, if either the Houston or Phoenix metropolitan area experiences an economic downturn, our operations and ability to make distributions to our shareholders could be adversely impacted. In addition, a substantial component of the Houston economy is the oil and gas industry, and the current low prices of oil and natural gas could adversely affect companies in that industry and their employees, which could adversely affect the businesses of our Houston tenants.

We lease our properties to approximately 1,500 tenants and leases for approximately 10% to 20% of our gross leasable area expire annually. Each year we face the risk of non-renewal of a significant percentage of our leases and the cost of re-leasing a significant amount of our available space, and our failure to meet leasing targets and control the cost of re-leasing our properties could adversely affect our rental revenue, operating expenses and results of operations.

Our Community Centered Property™ business model produces shorter term leases to smaller, non-national tenants, and substantially all of our revenues consist of base rents received under these leases. As of December 31, 2015, approximately 30% of the aggregate gross leasable area of our properties is subject to leases that expire prior to December 31, 2017. We are subject to the risk that:

• tenants may choose not to, or may not have the financial resources to, renew these leases;

• we may experience significant costs associated with re-leasing a significant amount of our available space;

• we may experience difficulties and significant time lags re-leasing vacated space, which may cause us to fail to meet our occupancy and average base rent targets and experience increased costs of re-leasing; and

• the terms of any renewal or re-lease may be less favorable than the terms of the current leases.

We routinely seek to renew leases with our existing tenants prior to their expiration and typically begin discussions with tenants as early as 18 months prior to the expiration date of the existing lease. While our early renewal program and other leasing and marketing efforts provide early focus on expiring leases, and have generally been effective in producing lease renewals prior to expiration of the leases at rates comparable to or slightly in excess of the current rates, market conditions, including new supply of properties, and macroeconomic conditions in our markets and nationally could adversely impact our renewal rate and/or the rental rates we are able to negotiate. If any of these risks materialize, our rental revenue, operating expenses and results of operations could be adversely affected.

Many of our tenants are small businesses, which may have a higher risk of bankruptcy or insolvency.

Many of our tenants are small businesses that depend primarily on cash flows from their operations to pay their rent and without other resources could be at a higher risk of bankruptcy or insolvency than larger, national tenants. If tenants are unable to comply with the terms of our leases, we may be forced to modify the leases in ways that are unfavorable to us. Alternatively, the failure of a tenant to perform under a lease could require us to declare a default, repossess the space and find a suitable replacement tenant. There is no assurance that we would be able to lease the space on substantially equivalent or better terms than the prior lease, or at all, or successfully reposition the space for other uses. If one or more of our tenants files for bankruptcy relief, the Bankruptcy Code provides that a debtor has the option to assume or reject the unexpired lease within a certain period of time.

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Any bankruptcy filing by or relating to one or more of our tenants could bar all efforts by us to collect pre-bankruptcy debts from that tenant or seize its property. A tenant bankruptcy could also delay our efforts to collect past due balances under the lease and could ultimately preclude collection of all or a portion of these sums. It is possible that we may recover substantially less than the full value of any unsecured claims we hold, if any. Furthermore, dealing with a tenant's bankruptcy or other default may divert management's attention and cause us to incur substantial legal and other costs. The bankruptcy or insolvency of a number of smaller tenants may have an adverse impact on our business, financial condition and results of operations, our ability to make distributions to our shareholders and the trading price of our common shares.

Uninsured losses relating to real property or excessively expensive premiums for insurance coverage may adversely affect our returns.

We attempt to adequately insure all of our properties to cover casualty losses. However, there are types of losses, generally catastrophic in nature, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution or environmental matters, which are uninsurable or not economically insurable, or may be insured subject to limitations, such as large deductibles or co-payments. Our current geographic concentration in the Houston metropolitan area potentially increases the risk of damage to our portfolio due to hurricanes. Insurance risks associated with potential terrorism acts could sharply increase the premiums we pay for coverage against property and casualty claims. In some instances, we may be required to provide other financial support, either through financial assurances or self-insurance, to cover potential losses. We cannot assure you that we will have adequate coverage for these losses. Also, to the extent we must pay unexpectedly large insurance premiums, we could suffer reduced earnings that would result in less cash to be distributed to shareholders.

Discovery of previously undetected environmentally hazardous conditions may adversely affect our operating results.

Under various federal, state and local environmental laws, ordinances and regulations, a current or previous owner or operator of real property may be liable for the cost of removal or remediation of hazardous or toxic substances on, under or in its property. The costs of removal or remediation could be substantial. These laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of any hazardous or toxic substances. Environmental laws also may impose restrictions on the manner in which a property may be used or businesses may be operated, and these restrictions may require substantial expenditures. Environmental laws provide for sanctions in the event of noncompliance and may be enforced by governmental agencies or, in certain circumstances, by private parties. Certain environmental laws and common law principles could be used to impose liability for release of and exposure to hazardous substances, including asbestos containing materials into the air. In addition, third parties may seek recovery from owners or operators of real properties for personal injury or property damage associated with exposure to released hazardous substances. The cost of defending against claims of liability, of compliance with environmental regulatory requirements, of remediating any contaminated property, or of paying personal injury claims could materially adversely affect our business, assets or results of operations and, consequently, amounts available for distributions to our shareholders.

Certain of our properties currently include or have in the past included a dry cleaning facility as a tenant. See “Business - Compliance with Governmental Regulations.”

We may not be successful in consummating suitable acquisitions or investment opportunities, which may impede our growth and adversely affect the trading price of our common shares.

Our ability to expand through acquisitions is integral to our business strategy and requires us to consummate suitable acquisition or investment opportunities that meet our criteria and are compatible with our growth strategy. We may not be successful in consummating acquisitions or investments in properties that meet our acquisition criteria on satisfactory terms or at all. Failure to consummate acquisitions or investment opportunities, the failure of an acquired property to perform as expected, or the failure to integrate successfully any acquired properties without substantial expense, delay or other operational or financial problems, would slow our growth, which could in turn adversely affect the trading price of our common shares.

Our ability to acquire properties on favorable terms may be constrained by the following significant risks:

• competition from other real estate investors with significant capital, including other REITs and institutional investment funds;

• competition from other potential acquirers which may significantly increase the purchase price for a property we acquire, which could reduce our growth prospects;

• unsatisfactory results of our due diligence investigations or failure to meet other customary closing conditions; and

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• failure to finance an acquisition on favorable terms or at all.

If any of these risks are realized, our business, financial condition and results of operations, our ability to make distributions to our shareholders and the trading price of our common shares may be materially and adversely affected.

Our success depends in part on our ability to execute our Community Centered Property™ strategy.

Our Community Centered Property™ strategy requires intensive management of a large number of small spaces and small tenant relationships. Our success depends in part upon our management's ability to identify potential Community Centered Properties™ and find and maintain the appropriate tenants to create such a property. Lack of market acceptance of our Community Centered Property™ strategy or our inability to successfully attract and manage a large number of tenant relationships could adversely affect our occupancy rates, operating results and dividend rate.

Our business is significantly influenced by demand for retail space generally, and a decrease in such demand may have a greater adverse effect on our business than if we owned a more diversified real estate portfolio.

Because our portfolio of properties consists primarily of community and neighborhood shopping centers, a decrease in the demand for retail space, due to the economic factors discussed above or otherwise, may have a greater adverse effect on our business and financial condition than if we owned a more diversified real estate portfolio. The market for retail space has been, and could continue to be, adversely affected by weakness in the national, regional and local economies, the adverse financial conditions of some retailing companies, the ongoing consolidation in the retail sector, the excess amount of retail space in a number of markets and increasing online consumer purchases.

Loss of our key personnel, particularly our senior managers, could threaten our ability to execute our strategy and operate our business successfully.

We are dependent on the experience and knowledge of our key executive personnel, particularly certain of our senior managers who have been instrumental in setting our strategic direction, operating our business, identifying, recruiting and training key personnel and arranging necessary financing. Losing the services of any of these individuals could adversely affect our business until qualified replacements could be found. We also believe that they could not quickly be replaced with managers of equal experience and capabilities and their successors may not be as effective.

Our systems may not be adequate to support our growth, and our failure to successfully oversee our portfolio of properties could adversely affect our results of operations.

We make no assurances that we will be able to adapt our portfolio management, administrative, accounting and operational systems, or hire and retain sufficient operational staff, to support our growth. Our failure to successfully oversee our current portfolio of properties or any future acquisitions or developments could have a material adverse effect on our results of operations and financial condition and our ability to make distributions.

We face risks relating to cybersecurity attacks, loss of confidential information and other business disruptions.

Our business is at risk from and may be impacted by cybersecurity attacks, including attempts to gain unauthorized access to our confidential data and other electronic security breaches. Such cyber-attacks can range from individual attempts to gain unauthorized access to our information technology systems to more sophisticated security threats. While we employ a number of measures to prevent, detect and mitigate these threats, there is no guarantee such efforts will be successful in preventing a cyber-attack. Cybersecurity incidents could compromise the confidential information of our tenants, employees and third party vendors and affect the efficiency of our business operations, which in turn could have a material adverse effect on our reputation, competitiveness and results of operations.

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There can be no assurance that we will be able to pay or maintain cash distributions or that distributions will increase over time.

There are many factors that can affect the availability and timing of cash distributions to shareholders. Distributions are based upon our funds from operations, financial condition, cash flows and liquidity, debt service requirements, capital expenditure requirements for our properties and other matters our board of trustees may deem relevant from time to time. If we do not have sufficient cash available for distributions, we may need to fund the shortage out of working capital or borrow to provide funds for such distributions, which would reduce the amount of capital available for real estate investments and increase our future interest costs.

We can give no assurance that we will be able to continue to pay distributions or that distributions will increase over time. In addition, we can give no assurance that rents from our properties will increase, or that future acquisitions of real properties, mortgage loans or our investments in securities will increase our cash available for distributions to shareholders. Our actual results may differ significantly from the assumptions used by our board of trustees in establishing the distribution rate to shareholders. Our inability to make distributions, or to make distributions at expected levels, could result in a decrease in the trading price of our common shares.

Any weaknesses identified in our system of internal controls by us and our independent registered public accounting firm pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 could have an adverse effect on our business.

Section 404 of the Sarbanes-Oxley Act of 2002 requires that public companies evaluate and report on their systems of internal control over financial reporting. In addition, our independent registered public accounting firm must report on management's evaluation of those controls. In future periods, we may identify deficiencies in our system of internal controls over financial reporting that may require remediation. There can be no assurances that any such future deficiencies identified may not be material weaknesses that would be required to be reported in future periods. Any deficiencies or material weaknesses could result in significant time and expense to remediate, which could have a material adverse effect on our financial condition, results of operations and ability to make distributions to our shareholders.

Risks Associated with Our Indebtedness and Financing

Current market conditions could adversely affect our ability to refinance existing indebtedness or obtain additional financing for growth on acceptable terms or at all, which could adversely affect our ability to grow, our interest cost and our results of operations.

The United States credit markets have experienced significant dislocations and liquidity disruptions, including the bankruptcy, insolvency or restructuring of certain financial institutions. These circumstances have materially impacted liquidity in the debt markets, making financing terms for borrowers less attractive, and in certain cases have resulted in the unavailability of various types of debt financing. Reductions in our available borrowing capacity, or inability to refinance our revolving credit facility when required or when business conditions warrant, could have a material adverse effect on our business, financial condition and results of operations. In addition, we mortgage many of our properties to secure payment of indebtedness. If we are not successful in refinancing our mortgage debt upon maturity, then the property could be foreclosed upon or transferred to the mortgagee, or we might be forced to dispose of some of our properties upon disadvantageous terms, with a consequent loss of income and asset value. A foreclosure or disadvantageous disposal on one or more of our properties could adversely affect our ability to grow, financial condition, interest cost, results of operations, cash flow and ability to make distributions to our shareholders.

Furthermore, if prevailing interest rates or other factors at the time of refinancing result in higher interest rates upon refinancing, then the interest expense relating to that refinanced indebtedness would increase. Higher interest rates on newly incurred debt may negatively impact us as well. If interest rates increase, our interest costs and overall costs of capital will increase, which could adversely affect our transaction and development activity, financial condition, results of operation, cash flow, our ability to pay principal and interest on our debt and our ability to make distributions to our shareholders.

Our failure to hedge effectively against interest rate changes may adversely affect results of operations.

We currently have mortgages that bear interest at variable rates and we may incur additional variable rate debt in the future. Accordingly, increases in interest rates on variable rate debt would increase our interest expense, which could reduce net earnings and cash available for payment of our debt obligations and distributions to our shareholders.

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We may seek to manage our exposure to interest rate volatility by using interest rate hedging arrangements, such as interest cap agreements and interest rate swap agreements. These agreements involve risks, such as the risk that counterparties may fail to honor their obligations under these arrangements, that these arrangements may not be effective in reducing our exposure to interest rate changes and that a court could rule that such an agreement is not legally enforceable. In the past, we have used derivative financial instruments to hedge interest rate risks related to our variable rate borrowings. We will not use derivatives for speculative or trading purposes and intend only to enter into contracts with major financial institutions based on their credit rating and other factors, but we may choose to change this practice in the future. As of December 31, 2015, we had fixed rate hedges on $218.1 million of our variable rate debt, including $200 million of our unsecured credit facility. We may enter into additional interest rate swap agreements for our variable rate debt not currently subject to hedges, which totaled $127.6 million as of December 31, 2015. Hedging may reduce the overall returns on our investments. Failure to hedge effectively against interest rate changes may materially and adversely affect our results of operations.

We currently have and may incur additional mortgage indebtedness and other borrowings, which may increase our business risks and may adversely affect our ability to make distributions to our shareholders.

If we determine it to be in our best interests, we may, in some instances, acquire real properties by using either existing financing or borrowing new funds. In addition, we may incur or increase our current mortgage debt to obtain funds to acquire additional properties. We may also borrow funds if necessary to satisfy the REIT distribution requirement described above, or otherwise as may be necessary or advisable to ensure that we maintain our qualification as a REIT for federal income tax purposes.

On November 7, 2014, we, through our Operating Partnership, entered into an unsecured credit facility (the “2014 Facility”) with the lenders party thereto, with BMO Capital Markets, Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and U.S. Bank, National Association, as co-lead arrangers and joint book runners, and Bank of Montreal, as administrative agent (the “Agent”). On October 30, 2015, we, through the Operating Partnership, entered into the first amendment to the 2014 Facility (the “First Amendment”) with the guarantors party thereto, the lenders party thereto and the Agent. We refer to the 2014 Facility, as amended by the First Amendment, as the “Facility.” Proceeds from the Facility were used for general corporate purposes, including property acquisitions, debt repayment, capital expenditures, the expansion, redevelopment and re-tenanting of properties in our portfolio and working capital. We intend to use the additional proceeds from the Facility for general corporate purposes, including property acquisitions, debt repayment, capital expenditures, the expansion, redevelopment and re-tenanting of properties in our portfolio and working capital.

The Facility is comprised of the following four tranches:

• $300 million unsecured revolving credit facility with a maturity date of October 30, 2019;

• $50 million unsecured term loan with a maturity date of October 30, 2020; and

• $50 million unsecured term loan with a maturity date of January 29, 2021; and

• $100 million unsecured term loan with a maturity date of October 30, 2022.

The Facility includes an accordion feature that will allow the Operating Partnership to increase the borrowing capacity to $700 million, upon the satisfaction of certain conditions. As of December 31, 2015, $327.6 million was drawn on the Facility and our unused borrowing capacity was $172.4 million, assuming that we use the proceeds of the Facility to acquire properties, or to repay debt on properties, that are eligible to be included in the unsecured borrowing base. The Facility contains customary terms and conditions, including, without limitation, affirmative and negative covenants such as information reporting requirements, maximum secured indebtedness to total asset value, minimum EBITDA (earnings before interest, taxes, depreciation, amortization or extraordinary items) to fixed charges and maintenance of a minimum net worth. The Facility also contains customary events of default with customary notice and cure, including, without limitation, nonpayment, breach of covenant, misrepresentation of representations and warranties in a material respect, cross-default to other major indebtedness, change of control, bankruptcy and loss of REIT status. The amount available to us and our ability to borrow under the Facility is subject to our compliance with these requirements. Maintaining compliance with these covenants could limit our ability to implement our business plan effectively, or at all.

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We may also incur mortgage debt on a particular property if we believe the property's projected cash flow is sufficient to service the mortgage debt. As of December 31, 2015, we had approximately $172.1 million of mortgage debt secured by 20 of our properties. If there is a shortfall in cash flow, however, the amount available for distributions to shareholders may be affected. In addition, incurring mortgage debt increases the risk of loss because defaults on such indebtedness may result in loss of property in foreclosure actions initiated by lenders. For tax purposes, a foreclosure of any of our properties would be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure, but would not receive any cash proceeds. We may give lenders full or partial guarantees for mortgage debt incurred by the entities that own our properties. When we give a guaranty on behalf of an entity that owns one of our properties, we will be responsible to the lender for satisfaction of the debt if it is not paid by that entity. If any mortgages contain cross-collateralization or cross-default provisions, there is a risk that more than one property may be affected by a default. If any of our properties are foreclosed upon due to a default, our ability to pay cash distributions to our shareholders may be adversely affected. For more discussion, see “Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources.”

If we set aside insufficient working capital or are unable to secure funds for future tenant improvements, we may be required to defer necessary property improvements, which could adversely impact the quality of our properties and our results of operations.

When tenants do not renew their leases or otherwise vacate their space, it is possible that, in order to attract replacement tenants, we may be required to expend substantial funds for tenant improvements and refurbishments to the vacated space. If we have insufficient working capital reserves, we will have to obtain financing from other sources. Because most of our leases provide for tenant reimbursement of operating expenses, we have not established a permanent reserve for maintenance and repairs for our properties. However, to the extent that we have insufficient funds for such purposes, we may establish reserves for maintenance and repairs of our properties out of cash flow generated by operating properties or out of non-liquidating net sale proceeds. If these reserves or any reserves otherwise established are insufficient to meet our cash needs, we may have to obtain financing from either affiliated or unaffiliated sources to fund our cash requirements. We cannot assure you that sufficient financing will be available or, if available, will be available on economically feasible terms or on terms acceptable to us. Additional borrowing for working capital purposes will increase our interest expense, and therefore our financial condition and our ability to pay cash distributions to our shareholders may be adversely affected. In addition, we may be required to defer necessary improvements to our properties that may cause our properties to suffer from a greater risk of obsolescence or a decline in value, or a greater risk of decreased cash flow as a result of fewer potential tenants being attracted to our properties. If this happens, we may not be able to maintain projected rental rates for affected properties, and our results of operations may be negatively impacted.

We have in the past and may continue to structure acquisitions of property in exchange for limited partnership units in our Operating Partnership on terms that could limit our liquidity or our flexibility.

We have in the past and may continue to acquire properties by issuing limited partnership units in our Operating Partnership (“OP units”) in exchange for a property owner contributing property to the Operating Partnership. If we enter into such transactions, in order to induce the contributors of such properties to accept OP units, rather than cash, in exchange for their properties, it may be necessary for us to provide them with additional incentives. For instance, our Operating Partnership's limited partnership agreement provides that any holder of OP units may redeem such units for cash, or, at our option, common shares on a one-for-one basis. We may, however, enter into additional contractual arrangements with contributors of property under which we would agree to redeem a contributor's OP units for our common shares or cash, at the option of the contributor, at set times. If the contributor required us to redeem OP units for cash pursuant to such a provision, it would limit our liquidity and thus our ability to use cash to make other investments, satisfy other obligations or pay distributions. Moreover, if we were required to redeem OP units for cash at a time when we did not have sufficient cash to fund the redemption, we might be required to sell one or more properties to raise funds to satisfy this obligation. Furthermore, we might agree that if distributions the contributor received as a limited partner in our Operating Partnership did not provide the contributor with a defined return, then upon redemption of the contributor's OP units, we would pay the contributor an additional amount necessary to achieve that return. Such a provision could further negatively impact our liquidity and flexibility. Finally, in order to allow a contributor of a property to defer taxable gain on the contribution of property to our Operating Partnership, we might agree not to sell a contributed property for a defined period of time or until the contributor redeemed the contributor's OP units for cash or our common shares. Such an agreement would prevent us from selling those properties, even if market conditions made such a sale favorable to us.

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We may issue preferred shares with a preference in distributions over our common shares, and our ability to issue preferred shares and additional common shares may deter or prevent a sale of our common shares in which you could profit.

Our declaration of trust authorizes our board of trustees to issue up to 400,000,000 common shares and 50,000,000 preferred shares. Our board of trustees may amend our declaration of trust from time to time to increase or decrease the aggregate number of shares or the number of any class or series that we have authority to issue. In addition, our board of trustees may classify or reclassify any unissued common shares or preferred shares and may set the preferences, rights and other terms of the classified or reclassified shares. The terms of preferred shares could include a preference in distributions senior to our common shares. If we authorize and issue preferred shares with a distribution preference senior to our common shares, payment of any distribution preferences of outstanding preferred shares would reduce the amount of funds available for the payment of distributions on our common shares. Further, holders of preferred shares are normally entitled to receive a preference payment in the event we liquidate, dissolve or wind up before any payment is made to our common shareholders, likely reducing the amount our common shareholders would otherwise receive upon such an occurrence. In addition, under certain circumstances, the issuance of preferred shares or a separate class or series of common shares may render more difficult or tend to discourage:

• a merger, tender offer or proxy contest;

• assumption of control by a holder of a large block of our shares; or

• removal of incumbent management.

Risks Associated with Income Tax Laws

If we fail to qualify as a REIT, our operations and distributions to shareholders would be adversely impacted.

We intend to continue to be organized and to operate so as to qualify as a REIT under the Code. A REIT generally is not taxed at the corporate level on income it currently distributes to its shareholders. Qualification as a REIT involves the application of highly technical and complex rules for which there are only limited judicial or administrative interpretations. The determination of various factual matters and circumstances not entirely within our control may affect our ability to continue to qualify as a REIT. In addition, new legislation, new regulations, administrative interpretations or court decisions could significantly change the tax laws, possibly with retroactive effect, with respect to qualification as a REIT or the federal income tax consequences of such qualification.

If we were to fail to qualify as a REIT in any taxable year:

• we would not be allowed to deduct our distributions to shareholders when computing our taxable income;

• we would be subject to federal income tax (including any applicable alternative minimum tax) on our taxable income at regular corporate rates;

• we would be disqualified from being taxed as a REIT for the four taxable years following the year during which qualification was lost, unless entitled to relief under certain statutory provisions;

• our cash available for distributions to shareholders would be reduced; and

• we may be required to borrow additional funds or sell some of our assets in order to pay corporate tax obligations that we may incur as a result of our disqualification.

We may need to incur additional borrowings to meet the REIT minimum distribution requirement and to avoid excise tax.

In order to maintain our qualification as a REIT, we are required to distribute to our shareholders at least 90% of our annual real estate investment trust taxable income (excluding any net capital gain and before application of the dividends paid deduction). In addition, we are subject to a 4% nondeductible excise tax on the amount, if any, by which certain distributions paid by us with respect to any calendar year are less than the sum of (i) 85% of our ordinary income for that year, (ii) 95% of our net capital gain for that year and (iii) 100% of our undistributed taxable income from prior years. Although we intend to pay distributions to our shareholders in a manner that allows us to meet the 90% distribution requirement and avoid this 4% excise tax, we cannot assure you that we will always be able to do so.

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Our income consists almost solely of our share of our Operating Partnership's income, and the cash available for distribution by us to our shareholders consists of our share of cash distributions made by our Operating Partnership. Because we are the sole general partner of our Operating Partnership, our board of trustees determines the amount of any distributions made by our Operating Partnership. Our board of trustees may consider a number of factors in authorizing distributions, including:

• the amount of cash available for distribution;

• our Operating Partnership's financial condition;

• our Operating Partnership's capital expenditure requirements; and

• our annual distribution requirements necessary to maintain our qualification as a REIT.

Differences in timing between the actual receipt of income and actual payment of deductible expenses and the inclusion of income and deduction of expenses when determining our taxable income, as well as the effect of nondeductible capital expenditures and the creation of reserves or required debt amortization payments could require us to borrow funds on a short-term or long-term basis or make taxable distributions to our shareholders of our shares or debt securities to meet the REIT distribution requirement and to avoid the 4% excise tax described above. In these circumstances, we may need to borrow funds to avoid adverse tax consequences even if our management believes that the then prevailing market conditions generally are not favorable for borrowings or that borrowings would not be advisable in the absence of the tax consideration.

If our Operating Partnership were classified as a “publicly traded partnership” taxable as a corporation for federal income tax purposes under the Code, we would cease to qualify as a REIT and would suffer other adverse tax consequences.

We structured our Operating Partnership so that it would be classified as a partnership for federal income tax purposes. In this regard, the Code generally classifies “publicly traded partnerships” (as defined in Section 7704 of the Code) as associations taxable as corporations (rather than as partnerships), unless substantially all of their taxable income consists of specified types of passive income. In order to minimize the risk that the Code would classify our Operating Partnership as a “publicly traded partnership” for tax purposes, we placed certain restrictions on the transfer and/or redemption of partnership units in our Operating Partnership. If the Internal Revenue Service were to assert successfully that our Operating Partnership is a “publicly traded partnership,” and substantially all of its gross income did not consist of the specified types of passive income, the Code would treat our Operating Partnership as an association taxable as a corporation.

In such event, the character of our assets and items of gross income would change and would prevent us from continuing to qualify as a REIT. In addition, the imposition of a corporate tax on our Operating Partnership would reduce our amount of cash available for payment of distributions by us to our shareholders.

Complying with REIT requirements may cause us to forego otherwise attractive opportunities or liquidate otherwise attractive investments.

To qualify as a REIT for federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our shareholders and the ownership of our shares. In order to meet these tests, we may be required to forego investments we might otherwise make. Thus, compliance with the REIT requirements may hinder our performance.

In particular, we must ensure that at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities and qualified real estate assets. The remainder of our investment in securities (other than government securities and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our assets (other than government securities and qualified real estate assets) can consist of the securities of any one issuer, and no more than 25% (20% for taxable years beginning after December 31, 2017) of the value of our total assets can be represented by the securities of one or more taxable REIT subsidiaries. If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences. As a result, we may be required to liquidate otherwise attractive investments. These actions could have the effect of reducing our income and amounts available for distribution to our shareholders.

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We may be subject to adverse legislative or regulatory tax changes that could reduce the market price of our common shares.

At any time, the federal income tax laws governing REITs or the administrative interpretations of those laws may be amended. We cannot predict when or if any new federal income tax law, regulation, or administrative interpretation, or any amendment to any existing federal income tax law, regulation or administrative interpretation, will be adopted, promulgated or become effective and any such law, regulation, or interpretation may take effect retroactively. We and our shareholders could be adversely affected by any such change in, or any new, federal income tax law, regulation or administrative interpretation.

Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.

The American Taxpayer Relief Act of 2012 (“ATRA”) was enacted on January 3, 2013. Under ATRA, for taxable years beginning in 2013, for non-corporate taxpayers the maximum tax rate applicable to “qualified dividend income” paid by regular “C” corporations to U.S. shareholders generally is 20%, and there is no certainty as to how long this rate will be applicable. Dividends payable by REITs, however, generally are not eligible for the current reduced rate. Although ATRA does not adversely affect the taxation of REITs or dividends payable by REITs, it could cause non-corporate taxpayers to perceive investments in REITs to be relatively less attractive than investments in the stocks of regular “C” corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our common shares.

Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.

The REIT provisions of the Code substantially limit our ability to hedge our liabilities. Any income from a hedging transaction that we enter into to manage risk of interest rate changes, price changes or currency fluctuations with respect to borrowings made or to be made to acquire or carry real estate assets does not constitute “gross income” for purposes of the 75% or 95% gross income tests. To the extent that we enter into other types of hedging transactions, the income from those transactions is likely to be treated as non-qualifying income for purposes of both of the gross income tests. As a result of these rules, we may need to limit our use of advantageous hedging techniques or implement those hedges through taxable REIT subsidiaries. This could increase the cost of our hedging activities because any taxable REIT subsidiary that we may form would be subject to tax on gains or expose us to greater risks associated with changes in interest rates than we would otherwise want to bear. In addition, losses in taxable REIT subsidiaries will generally not provide any tax benefit, except for being carried forward against future taxable income in the taxable REIT subsidiaries.

Risks Related to Ownership of our Common Shares

Increases in market interest rates may result in a decrease in the value of our common shares.

One of the factors that may influence the price of our common shares will be the dividend distribution rate on the common shares (as a percentage of the price of our common shares) relative to market interest rates. If market interest rates rise, prospective purchasers of shares of our common shares may expect a higher distribution rate. Higher interest rates would not, however, result in more funds being available for distribution and, in fact, would likely increase our borrowing costs and might decrease our funds available for distribution. We therefore may not be able, or we may not choose, to provide a higher distribution rate. As a result, prospective purchasers may decide to purchase other securities rather than our common shares, which would reduce the demand for, and result in a decline in the market price of, our common shares.

Broad market fluctuations could negatively impact the market price of our common shares.

The stock market has experienced extreme price and volume fluctuations that have affected the market price of many companies in industries similar or related to ours and that have been unrelated to these companies' operating performances. These broad market fluctuations could reduce the market price of our common shares. Furthermore, our operating results and prospects may be below the expectations of public market analysts and investors or may be lower than those of companies with comparable market capitalizations. Either of these factors could lead to a material decline in the market price of our common shares.

16

Maryland takeover statutes may deter others from seeking to acquire us and prevent shareholders from making a profit in such transactions.

The Maryland General Corporation Law (“MGCL”) contains many provisions, such as the business combination statute and the control share acquisition statute, that are designed to prevent, or have the effect of preventing, someone from acquiring control of us. The business combination statute, subject to limitations, prohibits certain business combinations between us and an “interested shareholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our outstanding voting shares or an affiliate or associate of our Company who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of our then outstanding shares) or an affiliate of an interested shareholder for five years after the most recent date on which the person becomes an interested shareholder and thereafter imposes super-majority voting requirements on these combinations. The control share acquisition statute provides that “control shares” of our Company (defined as shares which, when aggregated with other shares controlled by the shareholder (except solely by virtue of a revocable proxy), entitle the shareholder to exercise one of three increasing ranges of voting power in electing trustees) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of issued and outstanding control shares) have no voting rights except to the extent approved by our shareholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.

We are currently subject to the control share acquisition statute, although our board of trustees may amend our Amended and Restated Bylaws, or our bylaws, without shareholder approval, to exempt any acquisition of our shares from the statute. Our board of trustees has adopted a resolution exempting any business combination with any person from the business combination statute. The business combination statute (if our board of trustees revokes the foregoing exemption) and the control share acquisition statute could delay or prevent offers to acquire us and increase the difficulty of consummating any such offers, even if such a transaction would be in our shareholders' best interest.

The MGCL, the Maryland REIT Law and our organizational documents limit shareholders' rights to bring claims against our officers and trustees.

The MGCL and the Maryland REIT Law provide that a trustee will not have any liability as a trustee so long as he performs his duties in good faith, in a manner he reasonably believes to be in our best interests, and with the care that an ordinarily prudent person in a like position would use under similar circumstances. In addition, our declaration of trust provides that no trustee or officer will be liable to us or to any shareholder for money damages except to the extent that (a) the trustee or officer actually received an improper benefit or profit in money, property or services, for the amount of the benefit or profit in money, property, or services actually received; or (b) a judgment or the final adjudication adverse to the trustee or officer is entered in a proceeding based on a finding in the proceeding the trustee's or officer's action or failure to act was the result of active and deliberate dishonesty and was material to the cause of action adjudicated in the proceeding. Finally, our declaration of trust authorizes our Company to obligate itself, and our bylaws obligate us, to indemnify and advance expenses to our trustees and officers to the maximum extent permitted by Maryland law.

Our classified board of trustees may prevent others from effecting a change in the control of our board of trustees.

We believe that classification of our board of trustees will help to assure the continuity and stability of our business strategies and policies as determined by the board of trustees. However, the classified board provision could have the effect of making the replacement of incumbent trustees more time-consuming and difficult. At least two annual meetings of shareholders, instead of one, will generally be required to effect a change in a majority of our board of trustees. Thus, the classified board provision could increase the likelihood that incumbent trustees will retain their positions. The staggered terms of trustees may delay, defer or prevent a transaction or a change in control that might involve a premium price for our common shares or otherwise be in the best interest of the shareholders.

17

Future offerings of debt, which would be senior to our common shares upon liquidation, and/or preferred equity securities that may be senior to our common shares for purposes of distributions or upon liquidation, may adversely affect the market price of our common shares.

In the future, we may attempt to increase our capital resources by making additional offerings of debt or preferred equity securities, including medium-term notes, trust preferred securities, senior or subordinated notes and preferred shares. Upon liquidation, holders of our debt securities and preferred shares and lenders with respect to other borrowings will receive distributions of our available assets prior to the holders of our common shares. Additional equity offerings may dilute the holdings of our existing shareholders or reduce the market price of our common shares, or both. Holders of our common shares are not entitled to preemptive rights or other protections against dilution. Our preferred shares, if issued, could have a preference on liquidating distributions or a preference on distribution payments that could limit our ability to pay distributions to the holders of our common shares. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, our common shareholders bear the risk of our future offerings reducing the market price of our common shares and diluting their share holdings in us.

18

Item 1B.  Unresolved Staff Comments.

None.

Item 2.  Properties.

General

As of December 31, 2015, we owned 70 commercial properties, including 30 properties in Houston, seven properties in Dallas-Fort Worth, three properties in San Antonio, four properties in Austin, 25 properties in the Scottsdale and Phoenix, Arizona metropolitan areas, and one property in Buffalo Grove, Illinois, a suburb of Chicago.

Our tenants consist of national, regional and local businesses. Our properties generally attract a mix of tenants who provide basic staples, convenience items and services tailored to the specific cultures, needs and preferences of the surrounding community. These types of tenants are the core of our strategy of creating Whitestone-branded Community Centered Properties™. We also believe daily sales of these basic items are less sensitive to fluctuations in the business cycle than higher priced retail items. Our largest tenant represented only 2.6% of our total revenues for the year ended December 31, 2015.

We directly manage the operations and leasing of our properties. Substantially all of our revenues consist of base rents received under leases that generally have terms that range from less than one year to 15 years. The following table summarizes certain information relating to our properties as of December 31, 2015:

Commercial Properties	Gross Leasable Area	Average Occupancy as of  12/31/15		Annualized Base Rental Revenue  (in thousands) (1)		Average Annualized Base Rental Revenue Per Sq. Ft. (2)
Retail	4,002,644	90	%	$	56,747	$	15.75
Office/Flex	1,190,404	85	%	8,445		$	8.35
Office	521,134	80	%	6,881		$	16.50
Total - Operating Portfolio	5,714,182	88	%	72,073		14.33
Redevelopment, New Acquisitions (3)	242,329	74	%	3,791		21.14
Total	5,956,511	87	%	$	75,864	$	14.64

⁽¹⁾    Calculated as the tenant's actual December 31, 2015 base rent (defined as cash base rents including abatements) multiplied by 12.  Excludes vacant space as of December 31, 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 December 31, 2015 equaled approximately $197,000 for the month ended December 31, 2015.

⁽²⁾    Calculated as annualized base rent divided by gross leasable area leased as of December 31, 2015.  Excludes vacant space as of December 31, 2015.

⁽³⁾ 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.

Our largest property, Dana Park, a retail community purchased on September 21, 2012 and located in the Mesa submarket of Phoenix, Arizona, accounted for 8.0% of our total revenue for the year ended December 31, 2015. Dana Park also accounted for 6.7% of our real estate assets, net of accumulated depreciation, for the year ended December 31, 2015.

As of December 31, 2015, approximately $172.1 million of our total debt of $499.7 million was secured by 20 of our operating properties with a combined net book value of $213.9 million.

19

Location of Properties

Of our 70 properties, 30 are located in the greater Houston metropolitan statistical area.  These 30 properties represent 32% of our revenue for the year ended December 31, 2015. An additional 25 properties are located in the greater Phoenix metropolitan statistical area and represent 42% of our revenue for the year ended December 31, 2015.

According to the United States Census Bureau, Houston and Phoenix ranked 5th and 12th, respectively, in the largest United States metropolitan statistical areas as of July 1, 2014. The following table sets forth information about the unemployment rate in Houston, Phoenix and Nationally during the last six months of 2015.

	July		Aug.		Sept.		Oct.		Nov.		Dec.
National (1)	5.3	%	5.1	%	5.1	%	5.0	%	5.0	%	5.0	%
Houston (2)	4.7	%	4.6	%	4.6	%	4.8	%	4.9	%	4.6	%	(3)
Phoenix (2)	5.7	%	5.8	%	5.5	%	5.2	%	5.0	%	4.7	%	(3)

⁽¹⁾  Seasonally adjusted.

⁽²⁾  Not seasonally adjusted.

⁽³⁾  Represents estimate.

Source: Bureau of Labor Statistics

20

General Physical and Economic Attributes

The following table sets forth certain information relating to each of our properties owned as of December 31, 2015.

Whitestone REIT and Subsidiaries Property Details As of December 31, 2015
Community Name	Location	Year Built/ Renovated	Gross Leasable Square Feet	Percent Occupied at 12/31/2015		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	%	$	914	$	13.67	$	13.48
Anthem Marketplace	Phoenix	2000	113,293	94	%	1,578		14.82		15.80
Bellnott Square	Houston	1982	73,930	43	%	319		10.03		10.22
Bissonnet Beltway	Houston	1978	29,205	95	%	360		12.98		12.87
Centre South	Houston	1974	39,134	82	%	266		8.29		8.82
The Citadel	Phoenix	2013	28,547	95	%	378		13.94		16.19
City View Village	San Antonio	2005	17,870	100	%	510		28.54		28.82
Corporate Park Woodland II	Houston	2000	16,220	80	%	188		14.49		14.57
Desert Canyon	Phoenix	2000	62,533	91	%	739		12.99		13.43
Fountain Hills	Phoenix	2009	111,289	91	%	1,728		17.06		17.36
Fountain Square	Phoenix	1986	118,209	87	%	1,584		15.40		16.37
Fulton Ranch Towne Center	Phoenix	2005	113,281	89	%	1,762		17.48		18.27
Gilbert Tuscany Village	Phoenix	2009	49,415	88	%	739		16.99		18.35
Heritage Trace Plaza	Dallas	2006	70,431	100	%	1,521		21.60		22.01
Holly Knight	Houston	1984	20,015	85	%	363		21.34		20.63
Headquarters Village	Dallas	2009	89,134	92	%	2,157		26.30		28.10
Keller Place	Dallas	2001	93,541	93	%	830		9.54		11.54
Kempwood Plaza	Houston	1974	101,008	92	%	895		9.63		9.55
Lion Square	Houston	2014	117,592	86	%	1,095		10.83		11.06
The Marketplace at Central	Phoenix	2012	111,130	98	%	799		7.34		8.40
Market Street at DC Ranch	Phoenix	2003	242,459	91	%	4,298		19.48		19.44
Mercado at Scottsdale Ranch	Phoenix	1987	118,730	67	%	1,549		19.47		19.86
Paradise Plaza	Phoenix	1983	125,898	92	%	1,554		13.42		14.04
Parkside Village North	Austin	2005	27,045	100	%	758		28.03		29.84
Parkside Village South	Austin	2012	90,101	98	%	2,184		24.73		26.39
Pinnacle of Scottsdale	Phoenix	1991	113,108	96	%	1,928		17.76		17.88
Providence	Houston	1980	90,327	98	%	830		9.38		9.22
Quinlan Crossing	Austin	2012	109,892	96	%	2,387		22.63		23.75
Shaver	Houston	1978	21,926	85	%	197		10.57		12.93
Shops at Pecos Ranch	Phoenix	2009	78,767	95	%	1,509		20.17		20.45
Shops at Starwood	Dallas	2006	55,385	97	%	1,461		27.19		29.97
The Shops at Williams Trace	Houston	1985	132,991	94	%	1,556		12.45		14.52
South Richey	Houston	1980	69,928	100	%	802		11.47		9.85
Spoerlein Commons	Chicago	1987	41,455	83	%	710		20.63		20.37
The Strand at Huebner Oaks	San Antonio	2000	73,920	94	%	1,439		20.71		21.05
SugarPark Plaza	Houston	1974	95,032	92	%	978		11.19		11.55
Sunridge	Houston	1979	49,359	82	%	430		10.62		10.28
Sunset at Pinnacle Peak	Phoenix	2000	41,530	90	%	602		16.11		16.72
Terravita Marketplace	Phoenix	1997	102,733	94	%	1,324		13.71		13.21
Torrey Square	Houston	1983	105,766	84	%	687		7.73		8.30
Town Park	Houston	1978	43,526	94	%	840		20.53		20.82
Village Square at Dana Park	Phoenix	2009	323,026	90	%	5,871		20.19		20.23
Webster Pointe	Houston	1984	26,060	74	%	164		8.50		11.62
Westchase	Houston	1978	49,573	81	%	522		13.00		12.70

21

Whitestone REIT and Subsidiaries Property Details As of December 31, 2015 (continued)
Community Name	Location	Year Built/ Renovated	Gross Leasable Square Feet	Percent Occupied at 12/31/2015		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)
Williams Trace Plaza	Houston	1983	129,222	94	%	1,629		13.41		13.92
Windsor Park	San Antonio	2012	196,458	82	%	1,813		11.25		10.95
Total/Weighted Average			4,002,644	90	%	56,747		15.75		16.27
Office Communities:
9101 LBJ Freeway	Dallas	1985	125,874	71	%	$	1,222	$	13.67	$	14.29
Pima Norte	Phoenix	2007	35,110	63	%	371		16.77		18.08
Uptown Tower	Dallas	1982	253,981	80	%	3,535		17.40		17.21
Woodlake Plaza	Houston	1974	106,169	96	%	1,753		17.20		17.17
Total/Weighted Average			521,134	80	%	6,881		16.50		16.61
Office/Flex Communities:
Brookhill	Houston	1979	74,757	85	%	$	241	$	3.79	$	3.92
Corporate Park Northwest	Houston	1981	174,359	85	%	1,763		11.90		11.96
Corporate Park West	Houston	1999	175,665	87	%	1,603		10.49		10.57
Corporate Park Woodland	Houston	2000	99,937	88	%	852		9.69		9.93
Dairy Ashford	Houston	1981	42,902	99	%	267		6.29		6.22
Holly Hall Industrial Park	Houston	1980	90,000	91	%	723		8.83		8.32
Interstate 10 Warehouse	Houston	1980	151,000	99	%	721		4.82		4.84
Main Park	Houston	1982	113,410	77	%	653		7.48		7.74
Plaza Park	Houston	1982	105,530	51	%	546		10.14		9.70
Westbelt Plaza	Houston	1978	65,619	74	%	497		10.24		9.56
Westgate Service Center	Houston	1984	97,225	74	%	579		8.05		8.69
Total/Weighted Average			1,190,404	85	%	8,445		8.35		8.37
Total/Weighted Average - Operating Portfolio			5,714,182	88	%	72,073		14.33		14.71
Davenport Village	Austin	1999	128,934	79	%	$	2,500	$	24.54	$	25.52
Gilbert Tuscany Village Hard Corner	Phoenix	2009	14,603	—	%	—		—		—
The Promenade at Fulton Ranch	Phoenix	2007	98,792	78	%	1,291		16.75		18.00
Total/Weighted Average - Development Portfolio (4)			242,329	74	%	3,791		21.14		22.23
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			5,956,511	87	%	$	75,864	$	14.64	$	15.05

⁽¹⁾    Calculated as the tenant's actual December 31, 2015 base rent (defined as cash base rents including abatements) multiplied by 12. Excludes vacant space as of December 31, 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 December 31, 2015 equaled approximately $197,000 for the month ended December 31, 2015.

⁽²⁾    Calculated as annualized base rent divided by gross leasable area leased as of December 31, 2015.  Excludes vacant space as of December 31, 2015.

22

⁽³⁾  Represents (i) the contractual base rent for leases in place as of December 31, 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 December 31, 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 December 31, 2015, these parcels of land were held for development and, therefore, had no gross leasable area.

23

Significant Tenants

The following table sets forth information about our 15 largest tenants as of December 31, 2015, based upon annualized rental revenues at December 31, 2015.

Tenant Name	Location	Annualized Rental Revenue (in thousands)		Percentage of Total Annualized Base Rental Revenues (1)		Initial Lease Date	Year Expiring
Safeway Stores Incorporated (2)	Phoenix, Houston and Austin	$	2,022	2.6	%	11/14/1982, 5/8/1991, 7/1/2000, 4/1/2014 and 4/1/2014	2017, 2020, 2021, 2024 and 2034
Bashas' Inc. (3)	Phoenix	823		1.1	%	10/9/2004 and 4/1/2009	2024 and 2029
Haggens Food & Pharmacy (4)	Phoenix	660		0.9	%	2/27/1996 and 7/12/2000	2020 and 2022
Wells Fargo & Company (5)	Phoenix	645		0.9	%	10/24/1996 and 4/16/1999	2016 and 2018
Alamo Drafthouse Cinema	Austin	639		0.8	%	2/1/2012	2027
Walgreens & Co. (6)	Phoenix and Houston	530		0.7	%	11/14/1982, 11/2/1987 and 11/3/1996	2017, 2027 and 2049
Dollar Tree (7)	Phoenix and Houston	530		0.7	%	8/10/1999, 6/29/2001, 11/8/2009, 12/17/2009 and 5/21/2013	2016, 2017, 2020, 2020 and 2023
University of Phoenix	San Antonio	520		0.7	%	10/18/2010	2018
Petco (8)	Phoenix and Houston	484		0.6	%	7/6/1998 and 10/15/2006	2019 and 2026
Kroger Co.	Dallas	483		0.6	%	12/15/2000	2022
Ross Dress for Less, Inc. (9)	San Antonio, Phoenix and Houston	472		0.6	%	2/11/2009, 6/18/2012 and 2/7/2013	2020, 2023 and 2023
Paul's Ace Hardware	Phoenix	460		0.6	%	3/1/2008	2018
Rock Solid Images	Houston	372		0.5	%	4/1/2004	2016
Sterling Jewelers Inc.	Phoenix	354		0.5	%	11/23/2004	2020
Super Bravo, Inc.	Houston	349		0.5	%	6/15/2011	2023
		$	9,343	12.3	%

⁽¹⁾  Annualized Base Rental Revenues represents the monthly base rent as of December 31, 2015 for each applicable tenant multiplied by 12.

⁽²⁾  As of December 31, 2015, we had five leases with the same tenant occupying space at properties located in Phoenix, Houston and Austin. The annualized rental revenue for the lease that commenced on April 1, 2014, and is scheduled to expire in 2034, was $997,000, which represents 1.3% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on April 1, 2014, and is scheduled to expire in 2024, was $42,000, which represents less than 0.1% of our 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 0.4% 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 0.4% of our total annualized base rental revenue.

24

⁽³⁾  As of December 31, 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 0.9% of our total annualized base rental revenue.

⁽⁴⁾  As of December 31, 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 February 27, 1996, and is scheduled to expire in 2022, was $235,000, which represents 0.3% of our total annualized base rental revenue. 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.

⁽⁵⁾  As of December 31, 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 0.7% of our total annualized base rental revenue.

⁽⁶⁾  As of December 31, 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 0.2% 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 December 31, 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 0.1% 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 $110,000, which represents 0.2% of our total annualized base rental revenue.

⁽⁸⁾  As of December 31, 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 0.3% 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.

⁽⁹⁾  As of December 31, 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 0.2% 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 $187,000, 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.

25

Lease Expirations

The following table lists, on an aggregate basis, all of our scheduled lease expirations over the next 10 years.

					Annualized Base Rent
		Gross Leasable Area			as of December 31, 2015
Year	Number of Leases	Approximate Square Feet	Percent of Total		Amount (in thousands)		Percent of Total
2016	410	1,038,717	17.4	%	$	13,507	17.8	%
2017	265	756,554	12.7	%	11,725		15.5	%
2018	244	850,346	14.3	%	12,992		17.1	%
2019	186	555,628	9.3	%	9,329		12.3	%
2020	156	707,357	11.9	%	10,027		13.2	%
2021	72	294,519	4.9	%	3,982		5.2	%
2022	47	314,818	5.3	%	4,150		5.5	%
2023	25	182,554	3.1	%	2,341		3.1	%
2024	26	188,295	3.2	%	2,690		3.5	%
2025	20	64,434	1.1	%	1,217		1.6	%
Total	1,451	4,953,222	83.2	%	$	71,960	94.8	%

Insurance

We believe that we have property and liability insurance with reputable, commercially rated companies.  We also believe that our insurance policies contain commercially reasonable deductibles and limits, adequate to cover our properties.  We expect to maintain this type of insurance coverage and to obtain similar coverage with respect to any additional properties we acquire in the near future.  Further, we have title insurance relating to our properties in an aggregate amount that we believe to be adequate.

Item 3.  Legal Proceedings.

We are a participant in various legal proceedings and claims that arise in the ordinary course of our business.  These matters are generally covered by insurance.  While the resolution of these matters cannot be predicted with certainty, we believe that the final outcome of these matters will not have a material effect on our financial position, results of operations or cash flows.

Item 4.  Mine Safety Disclosures.

Not applicable.

26

PART II

Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities.

Market Information

Common Shares

Our common shares are traded on the NYSE under the ticker symbol “WSR.” As of February 26, 2016, we had 27,004,048 common shares of beneficial interest outstanding held by a total of 1,236 shareholders of record.

The following table sets forth the quarterly high, low and closing prices per share of our common shares for the years ended December 31, 2015 and 2014 as reported on the NYSE.

For the Year Ended December 31, 2015	High		Low		Close
First Quarter	$	16.36	$	15.04	$	15.88
Second Quarter	$	16.39	$	12.89	$	13.02
Third Quarter	$	13.53	$	9.90	$	11.53
Fourth Quarter	$	12.94	$	10.94	$	12.01
For the Year Ended December 31, 2014	High		Low		Close
First Quarter	$	14.89	$	13.21	$	14.44
Second Quarter	$	14.96	$	13.57	$	14.91
Third Quarter	$	15.68	$	13.76	$	13.94
Fourth Quarter	$	15.57	$	13.75	$	15.11

On February 26, 2016, the closing price of our common shares reported on the NYSE was $11.05 per share.

Distributions

U.S. federal income tax law generally requires that a REIT distribute annually to its shareholders at least 90% of its REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that it pay tax at regular corporate rates on any taxable income that it does not distribute. We currently, and intend to continue to, accrue distributions quarterly and make distributions in three monthly installments following the end of each quarter. For a discussion of our cash flow as compared to dividends, see “Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources.”

The timing and frequency of our distributions are authorized and declared by our board of trustees in exercise of its business judgment based upon a number of factors, including:

• our funds from operations;

• our debt service requirements;

• our capital expenditure requirements for our properties;

• our taxable income, combined with the annual distribution requirements necessary to maintain REIT qualification;

• requirements of Maryland law;

• our overall financial condition; and

• other factors deemed relevant by our board of trustees.

Any distributions we make will be at the discretion of our board of trustees and we cannot provide assurance that our distributions will be made or sustained in the future.

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The following table reflects the total distributions we have paid (including the total amount paid and the amount paid per share/unit) in each indicated quarter (in thousands, except per share/unit data):

	Common Shares				Noncontrolling OP Unit Holders				Total
Quarter Paid	Distributions Per Common Share		Total Amount Paid		Distributions Per OP Unit		Total Amount Paid		Total Amount Paid
2015
Fourth Quarter	$	0.2850	$	7,666	$	0.2850	$	143	$	7,809
Third Quarter	0.2850		7,664		0.2850		122		7,786
Second Quarter	0.2850		6,601		0.2850		111		6,712
First Quarter	0.2850		6,526		0.2850		113		6,639
Total	$	1.1400	$	28,457	$	1.1400	$	489	$	28,946
2014
Fourth Quarter	$	0.2850	$	6,484	$	0.2850	$	114	$	6,598
Third Quarter	0.2850		6,457		0.2850		126		6,583
Second Quarter	0.2850		6,367		0.2850		152		6,519
First Quarter	0.2850		6,231		0.2850		158		6,389
Total	$	1.1400	$	25,539	$	1.1400	$	550	$	26,089

Equity Compensation Plan Information

Please refer to Item 12 of this report for information concerning securities authorized under our equity incentive plan.

Issuer Purchases of Equity Securities

During the three months ended December 31, 2015, certain of our employees tendered owned common shares to satisfy the tax withholding on the lapse of certain restrictions on restricted common shares issued under our 2008 Long-Term Equity Incentive Ownership Plan (the “2008 Plan”). The following table summarized all of these repurchases during the three months ended December 31, 2015.

Period	Total Number of Shares Purchased (1)	Average Price Paid for Shares		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs
October 1, 2015 through October 31, 2015	—	$	—	N/A	N/A
November 1, 2015 through November 30, 2015	—	—		N/A	N/A
December 1, 2015 through December 31, 2015	28,293	12.01		N/A	N/A
Total	28,293	$	12.01

⁽¹⁾    The number of shares purchased represents common shares held by employees who tendered owned common shares to satisfy the tax withholding on the lapse of certain restrictions on restricted common shares issued under the 2008 Plan. With respect to these shares, the price paid per share is based on the fair market value at the time of tender.

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Performance Graph

The following graph compares the total shareholder returns of the Company's common shares to the Standard & Poor's 500 Index (“S&P 500”) and to the Morgan Stanley Capital International US REIT Index (“REIT Index”) from December 31, 2010 to December 31, 2015. The graph assumes that the value of the investment in our common shares and in the S&P 500 and REIT indices was $100 at December 31, 2010 and that all dividends were reinvested. The closing price of our common shares on December 31, 2010 (on which the graph is based) was $14.80. The past shareholder return shown on the following graph is not necessarily indicative of future performance. The performance graph and related information shall not be deemed “filed” with the SEC, nor shall such information be incorporated by reference into any future filing, except to the extent the Company specifically incorporates it by reference into such filing.

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Item 6.  Selected Financial Data.

The following table sets forth our selected consolidated financial information and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited consolidated financial statements and the notes thereto, both of which appear elsewhere in this report.

	Year Ended December 31,
	(in thousands, except per share data)
	2015			2014			2013			2012			2011
Operating Data:
Revenues	$	93,416		$	72,382		$	60,492		$	44,994		$	33,299
Property expenses	31,335			25,152			22,678			16,842			12,596
General and administrative	20,312			15,274			10,912			7,616			6,648
Depreciation and amortization	19,761			15,725			13,100			9,889			7,435
Executive relocation expense	—			—			—			2,177			—
Interest expense	14,910			10,579			9,975			8,553			6,224
Interest, dividend and other investment income	(313		)	(90		)	(136		)	(290		)	(460		)
Income from continuing operations before loss on disposal of assets and income taxes	7,411			5,742			3,963			207			856
Provision for income taxes	(372		)	(282		)	(293		)	(275		)	(214		)
Loss on disposal of assets	(185		)	(111		)	(49		)	(97		)	(146		)
Income (loss) from continuing operations	6,854			5,349			3,621			(165		)	496
Income from discontinued operations	11			510			298			218			440
Gain on sale of property	—			—			—			—			397
Gain on sale of properties from discontinued operations	—			1,887			—			—			—
Net income	6,865			7,746			3,919			53			1,333
Less: net income attributable to noncontrolling interests	116			160			125			3			210
Net income attributable to Whitestone REIT	$	6,749		$	7,586		$	3,794		$	50		$	1,123

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	Year Ended December 31,
	(in thousands, except per share data)
	2015			2014			2013			2012			2011
Earnings per share - basic
Income (loss) from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	$	0.25		$	0.23		$	0.19		$	(0.01	)	$	0.08
Income from discontinued operations attributable to Whitestone REIT	—			0.10			0.02			0.01			0.04
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	0.25		$	0.33		$	0.21		$	0.00		$	0.12
Earnings per share - diluted
Income (loss) from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	$	0.24		$	0.22		$	0.19		$	(0.01	)	$	0.08
Income from discontinued operations attributable to Whitestone REIT	—			0.10			0.01			0.01			0.04
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	0.24		$	0.32		$	0.20		$	0.00		$	0.12
Balance Sheet Data:
Real estate (net)	$	745,958		$	602,068		$	474,760		$	350,076		$	241,073
Real estate (net), discontinued operations	—			—			5,506			5,673			5,815
Other assets	37,919			32,229			27,708			29,622			26,605
Total assets	$	783,877		$	634,297		$	507,974		$	385,371		$	273,493
Liabilities	$	536,886		$	420,974		$	287,059		$	212,484		$	142,786
Whitestone REIT shareholders' equity	242,974			210,072			215,818			166,031			115,958
Noncontrolling interest in subsidiary	4,017			3,251			5,097			6,856			14,749
	$	783,877		$	634,297		$	507,974		$	385,371		$	273,493
Other Data:
Proceeds from issuance of common shares	$	49,649		$	6,458		$	63,887		$	58,679		$	59,683
Acquisitions of and additions to real estate (1)	163,050			142,065			137,024			118,207			88,903
Distributions per share (2)	1.13			1.13			1.12			1.12			1.09
Funds from operations (3)	26,696			21,920			17,314			10,273			8,707
Operating Portfolio Occupancy at year end	88		%	87		%	88		%	87		%	87		%
Average aggregate gross leasable area	5,734			5,075			4,537			3,833			3,366
Average rent per square foot	$	14.62		$	13.57		$	12.60		$	11.86		$	10.37

⁽¹⁾  Including amounts for discontinued operations.

⁽²⁾  The distributions per share represent total cash payments divided by weighted average common shares.

⁽³⁾  We believe that Funds From Operations (“FFO”) is an appropriate supplemental measure of operating performance because it helps our investors compare our operating performance relative to other REITs.  The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as net income (loss) available to common shareholders computed in accordance with GAAP, excluding gains or losses from sales of operating properties and extraordinary items, plus depreciation and amortization of real estate assets, including our share of unconsolidated partnerships and joint ventures.  We calculate FFO in a manner consistent with the NAREIT definition. For more information, see “Management's Discussion and Analysis of Financial Condition and Results of Operations - Reconciliation of Non-GAAP Financial Measures.”

The following table sets forth a reconciliation of net income to FFO, the nearest GAAP measure, for the periods presented:

	Year Ended December 31,
	(in thousands, except per share data)
	2015		2014			2013		2012		2011
Net income attributable to Whitestone REIT	$	6,749	$	7,586		$	3,794	$	50	$	1,123
Depreciation and amortization of real estate assets (1)	19,646		15,950			13,339		10,108		7,625
Loss (gain) on sale or disposal of assets (1)	185		(1,776		)	56		112		(251		)
Net income attributable to noncontrolling interests	116		160			125		3		210
FFO	$	26,696	$	21,920		$	17,314	$	10,273	$	8,707

⁽¹⁾ Including amounts for discontinued operations.

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Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion of our financial condition and results of operations in conjunction with our audited consolidated financial statements and the notes thereto included in this Annual Report on Form 10-K.  For more detailed information regarding the basis of presentation for the following information, you should read the notes to our audited consolidated financial statements included in this Annual Report on Form 10-K.

Overview of Our Company

We are a fully integrated real estate company that owns and operates commercial properties in culturally diverse markets in major metropolitan areas.  Founded in 1998, we are internally managed with a portfolio of commercial properties in Texas, Arizona and Illinois.

In October 2006, our current management team joined the Company and adopted a strategic plan to acquire, redevelop, own and operate Community Centered Properties™.  We define Community Centered Properties™ as visibly located properties in established or developing culturally diverse neighborhoods in our target markets.  We market, lease, and manage our centers to match tenants with the shared needs of the surrounding neighborhood.  Those needs may include specialty retail, grocery, restaurants and medical, educational and financial services.  Our goal is for each property to become a Whitestone-branded business center or retail community that serves a neighboring five-mile radius around our property.  We employ and develop a diverse group of associates who understand the needs of our multicultural communities and tenants.

As of December 31, 2015, we owned and operated 70 commercial properties consisting of:

Operating Portfolio

• 46 retail properties containing approximately 4.0 million square feet of gross leasable area and having a total carrying amount (net of accumulated depreciation) of $596.2 million;

• four office properties containing approximately 0.5 million square feet of gross leasable area and having a total carrying amount (net of accumulated depreciation) of $36.2 million; and

• 11 office/flex properties containing approximately 1.2 million square feet of gross leasable area and having a total carrying amount (net of accumulated depreciation) of $36.5 million.

Redevelopment, New Acquisitions Portfolio

• three retail properties containing approximately 0.2 million square feet of leasable space and having a total carrying amount (net of accumulated depreciation) of $64.9 million; and

• six parcels of land held for future development having a total carrying amount of $12.2 million.

As of December 31, 2015, we had an aggregate of 1,471 tenants.  We have a diversified tenant base with our largest tenant comprising only 2.6% of our total revenues for the year ended December 31, 2015.  Lease terms for our properties range from less than one year for smaller tenants to more than 15 years for larger tenants.  Our leases generally include minimum monthly lease payments and tenant reimbursements for taxes, insurance and maintenance.  We completed 408 new and renewal leases during 2015, totaling 965,897 square feet and $61.8 million in total lease value.

We employed 95 full-time employees as of December 31, 2015.  As an internally managed REIT, we bear our own expenses of operations, including the salaries, benefits and other compensation of our employees, office expenses, legal, accounting and investor relations expenses and other overhead costs.

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How We Derive Our Revenue

Substantially all of our revenue is derived from rents received from leases at our properties. We had rental income and tenant reimbursements of approximately $93,416,000 for the year ended December 31, 2015 as compared to $72,382,000 for the year ended December 31, 2014, an increase of $21,034,000, or 29%. The year ended December 31, 2015 included $18,633,000 in increased revenues from New Store operations. We define “New Stores” as properties acquired since the beginning of the period being compared. For purposes of comparing the year ended December 31, 2015 to the year ended December 31, 2014, New Stores include properties acquired between January 1, 2013 and December 31, 2014. During the twelve months ended December 31, 2015, Same Store revenues increased $2,401,000 in the aggregate. We define “Same Stores” as properties owned during the entire period being compared. For purposes of comparing the year ended December 31, 2015 to the year ended December 31, 2014, Same Stores include properties owned from January 1, 2013 to December 31, 2014. Same Store average occupancy decreased from 86.8% for the year ended December 31, 2014 to 86.5% for the year ended December 31, 2015, decreasing Same Store revenue $285,000. The Same Store revenue rate per average leased square foot increased $0.64 for the year ended December 31, 2015 to $17.28 per average leased square foot as compared to the year ended December 31, 2014 revenue rate per average leased square foot of $16.64, increasing Same Store revenue $2,686,000. The revenue rate per average leased square feet is calculated by dividing the total revenue by the average square feet leased during the period.

Known Trends in Our Operations; Outlook for Future Results

Rental Income

We expect our rental income to increase year-over-year due to the addition of properties and rent increases on renewal leases. The amount of net rental income generated by our properties depends principally on our ability to maintain the occupancy rates of currently leased space and to lease currently available space, newly acquired properties with vacant space, and space available from unscheduled lease terminations. The amount of rental income we generate also depends on our ability to maintain or increase rental rates in our submarkets. Over the past three years, we have seen modest improvement in the overall economy in our markets, which has allowed us to maintain overall occupancy rates, with slight increases in occupancy at certain of our properties, and to recognize modest increases in rental rates. We expect this trend to continue in 2016.

Scheduled Lease Expirations

We tend to lease space to smaller businesses that desire shorter term leases. As of December 31, 2015, approximately 30% of our gross leasable area was subject to leases that expire prior to December 31, 2017.  Over the last three years, we have renewed expiring leases with respect to approximately 76% of our gross leasable area. We routinely seek to renew leases with our existing tenants prior to their expiration and typically begin discussions with tenants as early as 18 months prior to the expiration date of the existing lease. Inasmuch as our early renewal program and other leasing and marketing efforts target these expiring leases, we hope to re-lease most of that space prior to expiration of the leases. In the markets in which we operate, we obtain and analyze market rental rates through review of third-party publications, which provide market and submarket rental rate data and through inquiry of property owners and property management companies as to rental rates being quoted at properties that are located in close proximity to our properties and we believe display similar physical attributes as our nearby properties. We use this data to negotiate leases with new tenants and renew leases with our existing tenants at rates we believe to be competitive in the markets for our individual properties. Due to the short term nature of our leases, and based upon our analysis of market rental rates, we believe that, in the aggregate, our current leases are at market rates. Market conditions, including new supply of properties, and macroeconomic conditions in our markets and nationally affecting tenant income, such as employment levels, business conditions, interest rates, tax rates, fuel and energy costs and other matters, could adversely impact our renewal rate and/or the rental rates we are able to negotiate. We continue to monitor our tenants' operating performances as well as overall economic trends to evaluate any future negative impact on our renewal rates and rental rates, which could adversely affect our cash flow and ability to make distributions to our shareholders.

Acquisitions

We have continued to successfully grow our gross leasable area through the acquisition of additional properties, and we expect to actively pursue and consummate additional acquisitions in the foreseeable future. We believe that over the next few years we will continue to have excellent opportunities to acquire quality properties at historically attractive prices. We have extensive relationships with community banks, attorneys, title companies and others in the real estate industry, which we believe enables us to take advantage of these market opportunities and maintain an active acquisition pipeline.

33

Property Acquisitions

We seek to acquire commercial properties in high-growth markets. Our acquisition targets are properties that fit our Community Centered Properties™ strategy.  We define Community Centered Properties™ as visibly located properties in established or developing, culturally diverse neighborhoods in our target markets, primarily in and around Phoenix, Chicago, Dallas, Fort Worth, San Antonio and Houston.  We may acquire properties in other high growth cities in the future. We market, lease and manage our centers to match tenants with the shared needs of the surrounding neighborhood.  Those needs may include specialty retail, grocery, restaurants and medical, educational and financial services.  Our goal is for each property to become a Whitestone-branded business center or retail community that serves a neighboring five-mile radius around our property.

Property Acquisitions. On August 28, 2015, we acquired the hard corner at our Gilbert Tuscany Village property for approximately $1.7 million in cash and net prorations. The 14,603 square foot single-tenant property was vacant at the time of purchase and is located in Gilbert, Arizona.

On August 26, 2015, we acquired two parcels of undeveloped land totaling 3.12 acres for 120,000 OP units. The OP units, are convertible on a one-for-one basis for Whitestone REIT common shares, subject to certain restrictions. The undeveloped land parcels are adjacent to our Keller Place property.

On August 26, 2015, we acquired Keller Place, a property that meets our Community Centered Property™ strategy, for approximately $12.0 million in cash and net prorations. The 93,541 square foot property was 92% leased at the time of purchase and is located in the Keller suburb of Fort Worth, Texas.

On August 26, 2015, we acquired Quinlan Crossing, a property that meets our Community Centered Property™ strategy, for approximately $37.5 million in cash and net prorations. The 109,892 square foot property was 95% leased at the time of purchase and is located in Austin, Texas.

On July 2, 2015, we acquired Parkside Village North, a property that meets our Community Centered Property™ strategy, for approximately $12.5 million in cash and net prorations. The 27,045 square foot property was 100% leased at the time of purchase and is located in Austin, Texas.

On July 2, 2015, we acquired Parkside Village South, a property that meets our Community Centered Property™ strategy, for approximately $32.5 million in cash and net prorations. The 90,101 square foot property was 100% leased at the time of purchase and is located in Austin, Texas.

On May 27, 2015, we acquired Davenport Village, a property that meets our Community Centered Property™ strategy, for approximately $45.5 million in cash and net prorations. The 128,934 square foot property was 85% leased at the time of purchase and is located in Austin, Texas.

On March 31, 2015, we acquired City View Village, a property that meets our Community Centered Property™ strategy, for approximately $6.3 million in cash and net prorations. The 17,870 square foot property was 100% leased at the time of purchase and is located in San Antonio, Texas.

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Leasing Activity

As of December 31, 2015, we owned70properties with5,956,511square feet of gross leasable area, which were approximately87%occupied. Our occupancy rate for all properties remained constant at approximately 87% occupied as of December 31, 2014 and December 31, 2015, respectively. The following is a summary of the Company's leasing activity for the year endedDecember 31, 2015:

	Number of Leases Signed	GLA Signed	Weighted Average Lease Term (2)	TI and Incentives per Sq. Ft. (3)		Contractual Rent Per Sq. Ft (4)		Prior Contractual Rent Per Sq. Ft. (5)		Straight-lined Basis Increase (Decrease) Over Prior Rent
Comparable (1)
Renewal Leases	223	477,639	3.0	$	2.09	$	15.57	$	14.75	11.4	%
New Leases	68	173,441	3.5	4.18		14.40		14.69		4.0	%
Total	291	651,080	3.1	$	2.65	$	15.26	$	14.73	9.4	%
	Number of Leases Signed	GLA Signed	Weighted Average Lease Term (2)	TI and Incentives per Sq. Ft. (3)		Contractual Rent Per Sq. Ft (4)
Non-Comparable
Renewal Leases	10	25,362	3.6	$	5.62	$	17.09
New Leases	107	326,403	5.1	13.90		13.80
Total	117	351,765	5.0	$	13.31	$	14.04

⁽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 leases. Actual cost of construction may vary. Does not include first generation costs for tenant improvements (“TI”) and leasing commission costs needed for new acquisitions or redevelopment of a property to bring to operating standards for its intended use.

⁽⁴⁾  Contractual minimum rent under the new lease for the first month, excluding concessions.

⁽⁵⁾  Contractual minimum rent under the prior lease for the final month.

Capital Expenditures

The following is a summary of the Company's capital expenditures for the years ended December 31 (in thousands):

	2015		2014
Capital expenditures:
Tenant improvements and allowances	$	5,794	$	3,820
Developments / redevelopments	4,938		4,311
Leasing commissions and costs	1,818		1,576
Maintenance capital expenditures	1,987		1,199
Total capital expenditures	$	14,537	$	10,906

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Summary of Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements.  We prepared these financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”).  The preparation of these financial statements required us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods.  We based our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances.  Our results may differ from these estimates.  Currently, we believe that our accounting policies do not require us to make estimates using assumptions about matters that are highly uncertain.  For a better understanding of our accounting policies, you should read Note 2, “Summary of Significant Accounting Policies,” to our accompanying consolidated financial statements in conjunction with this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

We have described below the critical accounting policies that we believe could impact our consolidated financial statements most significantly.

Revenue Recognition.  All leases on our properties are classified as operating leases, and the related rental income is recognized on a straight-line basis over the terms of the related leases.  Differences between rental income earned and amounts due per the respective lease agreements are capitalized or charged, as applicable, to accrued rents and accounts receivable.  Percentage rents are recognized as rental income when the thresholds upon which they are based have been met.  Recoveries from tenants for taxes, insurance, and other operating expenses are recognized as revenues in the period the corresponding costs are incurred.  We have established an allowance for doubtful accounts against the portion of tenant accounts receivable which is estimated to be uncollectible.

Development Properties.  Land, buildings and improvements are recorded at cost. Expenditures related to the development of real estate are carried at cost which includes capitalized carrying charges and development costs. Carrying charges (interest and real estate taxes) are capitalized as part of construction in progress. The capitalization of such costs ceases when the property, or any completed portion, becomes available for occupancy. For the year ended December 31, 2015, approximately $106,000 and $69,000 in interest expense and real estate taxes, respectively, were capitalized. For the year ended December 31, 2014, approximately $93,000 and $58,000 in interest expense and real estate taxes, respectively, were capitalized. For the year ended December 31, 2013, approximately $114,000 and $100,000 in interest expense and real estate taxes, respectively, were capitalized. 

Acquired Properties and Acquired Lease Intangibles.  We allocate the purchase price of the acquired properties to land, building and improvements, identifiable intangible assets and to the acquired liabilities based on their respective fair values at the time of purchase. Identifiable intangibles include amounts allocated to acquired out-of-market leases, the value of in-place leases and customer relationship value, if any. We determine fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends and specific market and economic conditions that may affect the property. Factors considered by management in our analysis of determining the as-if-vacant property value include an estimate of carrying costs during the expected lease-up periods considering market conditions, and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and estimates of lost rentals at market rates during the expected lease-up periods, tenant demand and other economic conditions. Management also estimates costs to execute similar leases including leasing commissions, tenant improvements, legal and other related expenses. Intangibles related to out-of-market leases and in-place lease value are recorded as acquired lease intangibles and are amortized as an adjustment to rental revenue or amortization expense, as appropriate, over the remaining terms of the underlying leases. Premiums or discounts on acquired out-of-market debt are amortized to interest expense over the remaining term of such debt.

Depreciation.  Depreciation is computed using the straight-line method over the estimated useful lives of 5 to 39 years for improvements and buildings, respectively.  Tenant improvements are depreciated using the straight-line method over the life of the improvement or remaining term of the lease, whichever is shorter.

Impairment.  We review our properties for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of the assets, including accrued rental income, may not be recoverable through operations.  We determine whether an impairment in value has occurred by comparing the estimated future cash flows (undiscounted and without interest charges), including the estimated residual value of the property, with the carrying cost of the property.  If impairment is indicated, a loss will be recorded for the amount by which the carrying value of the property exceeds its fair value.  Management has determined that there has been no impairment in the carrying value of our real estate assets as of December 31, 2015.

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Accrued Rents and Accounts Receivable.  Included in accrued rent and accounts receivable are base rents, tenant reimbursements and receivables attributable to recording rents on a straight-line basis. An allowance for the uncollectible portion of accrued rents and accounts receivable is determined based upon customer credit-worthiness (including expected recovery of our claim with respect to any tenants in bankruptcy), historical bad debt levels, and current economic trends. As of December 31, 2015 and 2014, we had an allowance for uncollectible accounts of $6.6 million and $5.0 million, respectively. As of December 31, 2015, 2014 and 2013, we recorded bad debt expense in the amount of $2.0 million, $1.6 million and $1.6 million, respectively, related to tenant receivables that we specifically identified as potentially uncollectible based on our assessment of each tenant’s credit-worthiness.  Bad debt expenses and any related recoveries are included in property operation and maintenance expense.

Unamortized Lease Commissions and Loan Costs.  Leasing commissions are amortized using the straight-line method over the terms of the related lease agreements.  Loan costs are amortized on the straight-line method over the terms of the loans, which approximates the interest method.  Costs allocated to in-place leases whose terms differ from market terms related to acquired properties are amortized over the remaining life of the respective leases.

Prepaids and Other Assets.  Prepaids and other assets include escrows established pursuant to certain mortgage financing arrangements for real estate taxes and insurance and acquisition deposits which include earnest money deposits on future acquisitions. As part of our executive relocation arrangement, as discussed in Note 12 to our accompanying consolidated financial statements, we issued a note receivable for $975,000 to the buyer, with an interest rate of 4.5% and a maturity of December 31, 2013. On December 5, 2013, the note was renewed through June 30, 2014 and bears interest at a rate of 5.2% during the renewal period. We are currently working with the buyer to renew the note receivable.

Federal Income Taxes.  We elected to be taxed as a REIT under the Code beginning with our taxable year ended December 31, 1999.  As a REIT, we generally are not subject to federal income tax on income that we distribute to our shareholders.  If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate rates.  We believe that we are organized and operate in such a manner as to qualify to be taxed as a REIT, and we intend to operate so as to remain qualified as a REIT for federal income tax purposes.

State Taxes.  We are subject to the Texas Margin Tax which is computed by applying the applicable tax rate (1% for us) to the profit margin, which, generally, will be determined for us as total revenue less a 30% standard deduction.  Although the Texas Margin Tax is not an income tax, Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) ASC 740, “Income Taxes” (“ASC 740”)applies to the Texas Margin Tax.  As of December 31, 2015, 2014 and 2013, we recorded a margin tax provision of $0.4 million, $0.3 million and $0.3 million, respectively.

Fair Value of Financial Instruments.  Our financial instruments consist primarily of cash, cash equivalents, accounts receivable, accounts and notes payable and investments in marketable securities.  The carrying value of cash, cash equivalents, accounts receivable and accounts payable are representative of their respective fair values due to their short-term nature.  The fair value of our long-term debt, consisting of fixed rate secured notes, variable rate secured notes and an unsecured revolving credit facility aggregate to approximately $498.8 million and $394.9 million as compared to the book value of approximately $499.7 million and $394.1 million as of December 31, 2015 and 2014, respectively. The fair value of our long-term debt is estimated on a Level 2 basis (as provided by ASC 820, “Fair Value Measurements and Disclosures”), using a discounted cash flow analysis based on the borrowing rates currently available to us for loans with similar terms and maturities, discounting the future contractual interest and principal payments.

Disclosure about fair value of financial instruments is based on pertinent information available to management as of December 31, 2015 and 2014. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since December 31, 2015 and current estimates of fair value may differ significantly from the amounts presented herein.

Derivative Instruments and Hedging Activities. We occasionally utilize derivative financial instruments, principally interest rate swaps, to manage our exposure to fluctuations in interest rates. We have established policies and procedures for risk assessment, and the approval, reporting and monitoring of derivative financial instruments. We recognize our interest rate swaps as cash flow hedges with the effective portion of the changes in fair value recorded in comprehensive income (loss) and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. Any ineffective portion of a cash flow hedges' change in fair value is recorded immediately into earnings. Our cash flow hedges are determined using Level 2 inputs under ASC 820. Level 2 inputs represent quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active; and model-derived valuations whose inputs are observable. As of December 31, 2015, we consider our cash flow hedges to be highly effective.

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Recent accounting pronouncements. In April 2015, the FASB issued guidance requiring that debt issuance costs related to a recognized liability be presented on the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with the presentation of debt discounts. In August 2015, the FASB issued guidance to clarify that debt issuance costs related to line-of-credit agreements may still be presented as an asset and subsequently amortized ratably over the term of such arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2015 and is to be applied retrospectively. We expect this guidance to reduce total assets and total notes payable on our consolidated balance sheets for amounts classified as deferred financing costs specific to debt issuance costs. We do not expect this guidance to have any other effect on our consolidated financial statements.

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Liquidity and Capital Resources

Our short-term liquidity requirements consist primarily of distributions to holders of our common shares and OP units, including those required to maintain our REIT status and satisfy our current quarterly distribution target of $0.2850 per share and OP unit, recurring expenditures, such as repairs and maintenance of our properties, non-recurring expenditures, such as capital improvements and tenant improvements, debt service requirements, and, potentially, acquisitions of additional properties.

During the year ended December 31, 2015, our cash provided from operating activities was $36,169,000 and our total dividends and distributions paid were $28,946,000. Therefore, we had cash flows from operations in excess of distributions of approximately $7,223,000. The Facility includes a $300 million unsecured borrowing capacity under a revolving credit facility, two $50 million term loans and one $100 million term loan. The Facility also includes an accordion feature that will allow the Operating Partnership to increase the borrowing capacity to $700 million, upon the satisfaction of certain conditions. We anticipate that cash flows from operating activities and our borrowing capacity under the Facility will provide adequate capital for our working capital requirements, anticipated capital expenditures and scheduled debt payments in the short term. We also believe that cash flows from operating activities and our borrowing capacity will allow us to make all distributions required for us to continue to qualify to be taxed as a REIT for federal income tax purposes.

Our long-term capital requirements consist primarily of maturities under our longer-term debt agreements, development and redevelopment costs, and potential acquisitions. We expect to meet our long-term liquidity requirements with net cash from operations, long-term indebtedness, sales of common shares, issuance of OP units, sales of underperforming and non-core properties and other financing opportunities, including debt financing. We believe we have access to multiple sources of capital to fund our long-term liquidity requirements, including the incurrence of additional debt and the issuance of additional equity. However, our ability to incur additional debt will be dependent on a number of factors, including our degree of leverage, the value of our unencumbered assets and borrowing restrictions that may be imposed by lenders. Our ability to access the equity markets will be dependent on a number of factors as well, including general market conditions for REITs and market perceptions about our Company.

We expect that our rental income will increase as we continue to acquire additional properties, subsequently increasing our cash flows generated from operating activities. We intend to finance the continued acquisition of such additional properties through equity issuances and through debt financing.

Our capital structure includes non-recourse secured debt that we assumed or originated on certain properties. We may hedge the future cash flows of certain debt transactions principally through interest rate swaps with major financial institutions.

As discussed in Note 2 (Summary of Significant Accounting Policies) to the accompanying consolidated financial statements, pursuant to the term of our $15.1 million 4.99% Note, due January 6, 2024 (See Note 6 (Debt) to the accompanying consolidated financial statements), which is collateralized by our Anthem Marketplace property, we were required by the lenders thereunder to establish a cash management account controlled by the lenders to collect all amounts generated by our Anthem Marketplace property in order to collateralize such promissory note. Amounts in the cash management account are classified as restricted cash.

Cash and Cash Equivalents

We had cash and cash equivalents of approximately $2,587,000 at December 31, 2015, as compared to $4,236,000 at December 31, 2014.  The decrease of $1,649,000 was primarily the result of the following:

Sources of Cash

• Cash flow from operations of $36,169,000 for the year ended December 31, 2015;

• Net proceeds of $49,649,000 from issuance of common shares;

• Net proceeds of $107,500,000 from our the Facility;

• Proceeds from sales of marketable securities of $496,000;

• Cash flow from discontinued operations of $11,000;

Uses of Cash

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• Payment of dividends and distributions to common shareholders and OP unit holders of $28,946,000;

• Real estate acquisitions of $147,950,000;

• Additions to real estate of $12,719,000;

• Payments of loans of $2,847,000;

• Payments of loan origination costs of $1,534,000;

• Repurchase of common shares $1,357,000; and

• Change in restricted cash of $121,000.

We place all cash in short-term, highly liquid investments that we believe provide appropriate safety of principal. 

Equity Offerings

On June 26, 2015, we completed the sale of 3,750,000 common shares, $0.001 par value per share, at a purchase price of $13.3386 per share. Total net proceeds from the offering, after deducting offering expenses, were approximately $49.7 million, which were contributed to the Operating Partnership in exchange for OP units. The Operating Partnership used the net proceeds from this offering to repay a portion of the Facility and for general corporate purposes.

On October 8, 2013, we completed the sale of 4,000,000 common shares, $0.001 par value per share, and on October 28, 2013, upon the underwriters' exercise of the over-allotment option, we completed the sale of 600,000 additional common shares, at a price to the public of $13.54 per share. Total net proceeds from the offering, including the over-allotment shares, and after deducting the underwriting discount and offering expenses, were approximately $59.7 million, which we contributed to the Operating Partnership in exchange for OP units. The Operating Partnership used the net proceeds from this offering for general corporate purposes, which included acquisitions of additional properties, the repayment of outstanding indebtedness, capital expenditures (including tenant improvements), the expansion, redevelopment and/or re-tenanting of properties in our portfolio, working capital and other general purposes.

On June 19, 2013, we entered into five equity distribution agreements for an at-the-market distribution program.  On August 14, 2013, we entered into a sixth equity distribution agreement on substantially similar terms as the existing equity distribution agreements and amended the existing equity distribution agreements in order to add an additional placement agent (together, the “2013 equity distribution agreements”). Pursuant to the terms and conditions of the 2013 equity distribution agreements, we could issue and sell up to an aggregate of $50 million of our common shares. Actual sales would depend on a variety of factors to be determined by us from time to time, including (among others) market conditions, the trading price of our common shares, capital needs and our determinations of the appropriate sources of funding for us, and will be made in transactions that will be deemed to be “at-the-market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”). We had no obligation to sell any of our common shares, and could at any time suspend offers under the agreements or terminate the agreements. For the year ended December 31, 2015, we sold 456,090 common shares under the 2013 equity distribution agreements, with net proceeds to us of approximately $6.4 million. In connection with such sales, we paid compensation of $0.1 million to the sales agents. For the year ended December 31, 2014, we sold 282,239 common shares under the 2013 equity distribution agreements, with net proceeds to us of approximately $4.2 million. In connection with such sales, we paid compensation of $0.2 million to the sales agents.

On June 4, 2015, we entered into nine amended and restated equity distribution agreements (the “2015 equity distribution agreements”). Pursuant to the terms and conditions of the 2015 equity distribution agreements, we can issue and sell up to an aggregate of $50 million of our common shares. Actual sales will depend on a variety of factors to be determined by us from time to time, including (among others) market conditions, the trading price of our common shares, capital needs and our determinations of the appropriate sources of funding for us, and will be made in transactions that will be deemed to be “at-the-market” offerings as defined in Rule 415 under the Securities Act. We have no obligation to sell any of our common shares, and can at any time suspend offers under the 2015 equity distribution agreements or terminate the 2015 equity distribution agreements. We have not sold any common shares under the 2015 equity distribution agreements.

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Debt

Mortgages and other notes payable consist of the following (in thousands):

	December 31,
Description	2015		2014
Fixed rate notes
$10.5 million, LIBOR plus 2.00% Note, due September 24, 2018 (1)	$	10,220	$	10,460
$50.0 million, 0.84% plus 1.35% to 1.90% Note, due October 30, 2020 (2)	50,000		50,000
$50.0 million, 1.50% plus 1.35% to 1.90% Note, due January 29, 2021 (3)	50,000		50,000
$100.0 million, 1.73% plus 1.65% to 2.25% Note, due October 30, 2022 (4)	100,000		—
$37.0 million 3.76% Note, due December 1, 2020	35,146		36,090
$6.5 million 3.80% Note, due January 1, 2019	6,190		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	20,040		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% Note, due December 29, 2017 (5)	7,886		7,888
$2.6 million 5.46% Note, due October 1, 2023	2,550		2,583
$11.1 million 5.87% Note, due August 6, 2016	11,305		11,607
Floating rate notes
Unsecured line of credit, LIBOR plus 1.40% to 1.95%, due October 30, 2019	127,600		120,100
	$	499,747	$	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 Term Loan 1 (as defined below) at 0.84% through February 3, 2017 and 1.75% beginning February 3, 2017 through October 30, 2020.

⁽³⁾  Promissory note includes an interest rate swap that fixed the LIBOR portion of Term Loan 2 (as defined below) at 1.50%.

⁽⁴⁾  Promissory note includes an interest rate swap that fixed the LIBOR portion of Term Loan 3 (as defined below) at 1.73%.

⁽⁵⁾  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%.

Our mortgage debt was collateralized by 20 operating properties as of December 31, 2015 with a combined net book value of $213.9 million and 20 operating properties as of December 31, 2014 with a combined net book value of $216.9 million.  Our loans contain restrictions that would require the payment of prepayment penalties for the acceleration of outstanding debt and are secured by deeds of trust on certain of our properties and the assignment of certain rents and leases associated with those properties. 

On December 24, 2014, we assumed a $2.6 million promissory note as part of our acquisition of the hard corner at Village Square at Dana Park (see Note 4 to the accompanying consolidated financial statements). The 5.46% fixed interest rate note matures October 1, 2023.

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On November 26, 2014, we, operating through our subsidiary, Whitestone Headquarters Village, LLC, a Delaware limited liability company, entered into a $19.0 million promissory note (the “Headquarters Note”), with a fixed interest rate of 4.15% payable to Morgan Stanley Bank, N.A. and a maturity date of December 1, 2024. Proceeds from the Headquarters Note were used to repay a portion of the Facility.

On September 3, 2014, we, operating through our subsidiary, Whitestone Pecos Ranch, LLC, a Delaware limited liability company, entered into a $14.0 million promissory note (the “Pecos Note”), with a fixed interest rate of 4.34% payable to Wells Fargo Bank, National Association and a maturity date of September 11, 2024. Proceeds from the Pecos Note were used to repay a portion of the Facility.

On August 26, 2014, we, operating through our subsidiary, Whitestone Shops at Starwood, LLC, a Delaware limited liability company, entered into a $14.3 million promissory note (the “Starwood Note”), with a fixed interest rate of 4.34% payable to Wells Fargo Bank, National Association and a maturity date of September 11, 2024. Proceeds from the Starwood Note were used to repay a portion of the Facility.

On November 7, 2014, we, through our Operating Partnership, entered into an unsecured revolving credit facility (the “2014 Facility”) with the lenders party thereto, with BMO Capital Markets, Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and U.S. Bank, National Association, as co-lead arrangers and joint book runners, and Bank of Montreal, as administrative agent (the “Agent”). The 2014 Facility amended and restated our previous unsecured revolving credit facility. On October 30, 2015, we, through our Operating Partnership, entered into the First Amendment to the 2014 Facility (the “First Amendment”) with the guarantors party thereto, the lenders party thereto and the Agent. We refer to the 2014 Facility, as amended by the First Amendment, as the “Facility.”

Pursuant to the First Amendment, the Company made the following amendments to the 2014 Facility:

• extended the maturity date of the $400 million unsecured revolving credit facility under the 2014 Facility (the “Revolver”) to October 30, 2019 from November 7, 2018;

• converted $100 million of outstanding borrowings under the Revolver to a new $100 million unsecured term loan under the 2014 Facility (“Term Loan 3”) with a maturity date of October 30, 2022;

• extended the maturity date of the first $50 million unsecured term loan under the 2014 Facility (“Term Loan 1”) to October 30, 2020 from February 17, 2017; and

• extended the maturity date of the second $50 million unsecured term loan under the 2014 Facility (“Term Loan 2” and together with Term Loan 1 and Term Loan 3, the “Term Loans”) to January 29, 2021 from November 7, 2019.

Borrowings under the Facility accrue interest (at the Operating Partnership's option) at a Base Rate or an Adjusted LIBOR plus an applicable margin based upon our then existing leverage. As of December 31, 2015, the interest rate was 2.182%. The applicable margin for Adjusted LIBOR borrowings ranges from 1.40% to 1.95% for the Revolver and 1.35% to 2.25% for the Term Loans. Base Rate means the higher of: (a) the Agent's prime commercial rate, (b) the sum of (i) the average rate quoted by the Agent by two or more federal funds brokers selected by the Agent for sale to the Agent at face value of federal funds in the secondary market in an amount equal or comparable to the principal amount for which such rate is being determined, plus (ii) 1/2 of 1.00%, and (c) the LIBOR rate for such day plus 1.00%. Adjusted LIBOR means LIBOR divided by one minus the Eurodollar Reserve Percentage. The Eurodollar Reserve Percentage means the maximum reserve percentage at which reserves are imposed by the Board of Governors of the Federal Reserve System on eurocurrency liabilities.

We serve as the guarantor for funds borrowed by the Operating Partnership under the Facility. The Facility contains customary terms and conditions, including, without limitation, affirmative and negative covenants such as information reporting requirements, maximum secured indebtedness to total asset value, minimum EBITDA (earnings before interest, taxes, depreciation, amortization or extraordinary items) to fixed charges, and maintenance of a minimum net worth. The Facility also contains customary events of default with customary notice and cure, including, without limitation, nonpayment, breach of covenant, misrepresentation of representations and warranties in a material respect, cross-default to other major indebtedness, change of control, bankruptcy and loss of REIT tax status.

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The Facility includes an accordion feature that will allow the Operating Partnership to increase the borrowing capacity to $700 million, upon the satisfaction of certain conditions. The Facility, which is available to us for acquisitions of properties and working capital, is our primary source of additional credit. As of December 31, 2015, $327.6 million was drawn on the Facility and our unused borrowing capacity was $172.4 million, assuming that we use the proceeds of the Facility to acquire properties, or to repay debt on properties, that are eligible to be included in the unsecured borrowing base. Proceeds from the Facility were used for general corporate purposes, including property acquisitions, debt repayment, capital expenditures, the expansion, redevelopment and re-tenanting of properties in our portfolio and working capital. We intend to use the additional proceeds from the Facility for general corporate purposes, including property acquisitions, debt repayment, capital expenditure, the expansion, redevelopment and re-tenanting of properties in our portfolio and working capital.

Certain other of our loans are subject to customary covenants.  As of December 31, 2015, we were in compliance with all loan covenants.

Annual maturities of notes payable as of December 31, 2015 are due during the following years:

	Amount Due
Year	(in thousands)
2016	$	13,269
2017	10,213
2018	12,136
2019	135,649
2020	82,827
Thereafter	245,653
Total	$	499,747

Capital Expenditures

We continually evaluate our properties’ performance and value. We may determine it is in our shareholders’ best interest to invest capital in properties we believe have potential for increasing value. We also may have unexpected capital expenditures or improvements for our existing assets. Additionally, we intend to continue investing in similar properties outside of Texas in cities with exceptional demographics to diversify market risk, and we may incur significant capital expenditures or make improvements in connection with any properties we may acquire.

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Contractual Obligations

As of December 31, 2015, we had the following contractual obligations (see Note 8 of our accompanying consolidated financial statements for further discussion regarding the specific terms of our debt):

			Payment due by period (in thousands)
Contractual Obligations	Total		Less than 1 year (2016)		1 - 3 years (2017 - 2018)		3 - 5 years (2019 - 2020)		More than 5 years (after 2020)
Long-Term Debt - Principal	$	499,747	$	13,269	$	22,349	$	218,476	$	245,653
Long-Term Debt - Fixed Interest	80,589		13,030		24,753		23,002		19,804
Long-Term Debt - Variable Interest (1)	8,036		2,096		4,193		1,747		—
Unsecured credit facility - Unused commitment fee (2)	1,322		345		690		287		—
Operating Lease Obligations	186		74		88		21		3
Total	$	589,880	$	28,814	$	52,073	$	243,533	$	265,460

⁽¹⁾   As of December 31, 2015, we had one loans totaling $127.6 million which bore interest at a floating rate.  The variable interest rate payments are based on LIBOR plus 1.35% to LIBOR plus 1.95%, which reflects our new interest rates under our 2014 Facility.  The information in the table above reflects our projected interest rate obligations for the floating rate payments based on one-month LIBOR as of December 31, 2015, of 0.24%.

⁽²⁾  The unused commitment fees on our unsecured credit facility, payable quarterly, are based on the average daily unused amount of our unsecured credit facility. The fees are 0.20% for facility usage greater than 50% or 0.25% for facility usage less than 50%. The information in the table above reflects our projected obligations for our unsecured credit facility based on our December 31, 2015 balance of $327.6 million.

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Distributions

During 2015, wepaid distributions to our common shareholders and OP unit holders of $28.9 million, compared to $26.1 million in 2014.  Common shareholders and OP unit holders receive monthly distributions.  Payments of distributions are declared quarterly and paid monthly.  The distributions paid to common shareholders and OP unit holders were as follows (in thousands, except per share data) for the years ended December 31, 2015 and 2014: 

	Common Shares				Noncontrolling OP Unit Holders				Total
Quarter Paid	Distributions Per Common Share		Total Amount Paid		Distributions Per OP Unit		Total Amount Paid		Total Amount Paid
2015
Fourth Quarter	$	0.2850	$	7,666	$	0.2850	$	143	$	7,809
Third Quarter	0.2850		7,664		0.2850		122		7,786
Second Quarter	0.2850		6,601		0.2850		111		6,712
First Quarter	0.2850		6,526		0.2850		113		6,639
Total	$	1.1400	$	28,457	$	1.1400	$	489	$	28,946
2014
Fourth Quarter	$	0.2850	$	6,484	$	0.2850	$	114	$	6,598
Third Quarter	0.2850		6,457		0.2850		126		6,583
Second Quarter	0.2850		6,367		0.2850		152		6,519
First Quarter	0.2850		6,231		0.2850		158		6,389
Total	$	1.1400	$	25,539	$	1.1400	$	550	$	26,089

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Results of Operations

Year Ended December 31, 2015 Compared to Year Ended December 31, 2014

The following table provides a general comparison of our results of operations for the years ended December 31, 2015 and 2014 (dollars in thousands, except per share data):

	Year Ended December 31,
	2015			2014
Number of properties owned and operated	70			63
Aggregate gross leasable area (sq. ft.)	5,956,511			5,485,793
Ending occupancy rate - operating portfolio(1)	88		%	87		%
Ending occupancy rate - all properties	87		%	87		%
Total property revenues	$	93,416		$	72,382
Total property expenses	31,335			25,152
Total other expenses	54,670			41,488
Provision for income taxes	372			282
Loss on disposal of assets	185			111
Income from continuing operations	6,854			5,349
Income from discontinued operations, net of taxes	11			510
Gain on sale of property from discontinued operations	—			1,887
Net income	6,865			7,746
Less:  Net income attributable to noncontrolling interests	116			160
Net income attributable to Whitestone REIT	$	6,749		$	7,586
Funds from operations core(2)	$	35,754		$	28,153
Property net operating income (3)	62,081			47,230
Distributions paid on common shares and OP units	28,946			26,089
Distributions per common share and OP unit	$	1.1400		$	1.1400
Distributions paid as a % of funds from operations core	81		%	93		%

⁽¹⁾   Excludes (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.

⁽²⁾   For an explanation and reconciliation of funds from operations to net income, see “Funds From Operations” below.

⁽³⁾   For an explanation and reconciliation of property net operating income to net income, see “Property Net Operating Income” below.

46

Property revenues. We had rental income and tenant reimbursements of approximately $93,416,000 for the year ended December 31, 2015 as compared to $72,382,000 for the year ended December 31, 2014, an increase of $21,034,000, or 29%. The year ended December 31, 2015 included $18,633,000 in increased revenues from New Store operations. We define “New Stores” as properties acquired since the beginning of the period being compared. For purposes of comparing the year ended December 31, 2015 to the year ended December 31, 2014, New Stores include properties acquired between January 1, 2014 and December 31, 2015. During the twelve months ended December 31, 2015, Same Store revenues increased $2,401,000 in the aggregate. We define “Same Stores” as properties owned during the entire period being compared. For purposes of comparing the year ended December 31, 2015 to the year ended December 31, 2014, Same Stores include properties owned from January 1, 2014 to December 31, 2015. Same Store average occupancy decreased from 86.8% for the year ended December 31, 2014 to 86.5% for the year ended December 31, 2015, decreasing Same Store revenue $285,000. The Same Store revenue rate per average leased square foot increased $0.64 for the year ended December 31, 2015 to $17.28 per average leased square foot as compared to the year ended December 31, 2014 revenue rate per average leased square foot of $16.64, increasing Same Store revenue $2,686,000. The revenue rate per average leased square feet is calculated by dividing the total revenue by the average square feet leased during the period.

Property expenses.  Our property expenses were $31,335,000 for the year ended December 31, 2015, as compared to $25,152,000 for the year ended December 31, 2014, an increase of $6,183,000, or 25%. The primary components of total property expenses, Same Store property expenses and New Store property expenses are detailed in the tables below (in thousands):

	Year Ended December 31,
Overall Property Expenses	2015		2014		Increase		% Increase
Real estate taxes	$	12,637	$	9,747	$	2,890	30	%
Utilities	4,788		4,235		553		13	%
Contract services	5,297		4,295		1,002		23	%
Repairs and maintenance	3,253		2,370		883		37	%
Bad debt	2,025		1,573		452		29	%
Labor and other	3,335		2,932		403		14	%
Total	$	31,335	$	25,152	$	6,183	25	%

	Year Ended December 31,				Increase			% Increase
Same Store Property Expenses	2015		2014		(Decrease)			(Decrease)
Real estate taxes	$	9,512	$	9,387	$	125		1	%
Utilities	4,250		4,203		47			1	%
Contract services	4,439		4,235		204			5	%
Repairs and maintenance	2,836		2,366		470			20	%
Bad debt	1,708		1,495		213			14	%
Labor and other	2,795		2,910		(115		)	(4	)%
Total	$	25,540	$	24,596	$	944		4	%

	Year Ended December 31,
New Store Property Expenses	2015		2014		Increase		% Increase
Real estate taxes	$	3,125	$	360	$	2,765	Not meaningful
Utilities	538		32		506		Not meaningful
Contract services	858		60		798		Not meaningful
Repairs and maintenance	417		4		413		Not meaningful
Bad debt	317		78		239		Not meaningful
Labor and other	540		22		518		Not meaningful
Total	$	5,795	$	556	$	5,239	Not meaningful

47

Real estate taxes.  Real estate taxes increased $2,890,000, or 30%, during the year ended December 31, 2015 as compared to 2014, primarily as a result of New Store real estate taxes, which increased $2,765,000. Same Store real estate taxes increased $125,000, or 1%, for the year ended December 31, 2015 as compared to the year ended December 31, 2014. We actively work to keep our valuations and resulting taxes low because a majority of these taxes are charged to our tenants through triple net leases, and we strive to keep these charges to our tenants as low as possible.

Utilities.  Utilities increased $553,000, or 13%, during the year ended December 31, 2015 as compared to 2014. The increase in utility expenses was primarily attributable to New Store increases of $506,000 for the year ended December 31, 2015. Same Store utilities expenses increased approximately $47,000, or 1%, during the year ended December 31, 2015 as compared to 2014. The majority of the Same Store increase was attributable to increased electricity usage and related charges.

Contract services. Contract services increased $1,002,000, or 23%, during the year ended December 31, 2015 as compared to 2014, primarily as a result of New Store contract services, which increased $798,000. Same Store contract services increased $204,000, or 5%.

Repairs and maintenance. Repairs and maintenance increased $883,000, or 37%, during the year ended December 31, 2015 as compared to 2014. New Store repairs and maintenance increased $413,000 for the year ended December 31, 2015 as compared to 2014. Same Store repairs and maintenance increased $470,000, or 20%, during year ended December 31, 2015 as compared to 2014. The majority of the Same Store increase was attributable to increased electrical repairs of $139,000, exterior painting of $100,000 and roofing repairs of $75,000.

Bad debt.  Bad debt for the year ended December 31, 2015 increased $452,000, or 29%, as compared to 2014. New Store bad debt increased $239,000 for the year ended December 31, 2015 as compared to the year ended December 31, 2014. Same Store bad debt increased $213,000 or 14% for the year ended December 31, 2015 as compared to the year ended December 31, 2014. The overall bad debt expense was approximately 2% of revenue for the years ended December 31, 2015 and December 31, 2014.

Labor and other.  Labor and other expenses increased $403,000, or 14%, for year ended December 31, 2015 as compared to 2014. New Store labor and other expenses increased $518,000 for the year ended December 31, 2015 as compared to 2014. Same Store labor and other expenses decreased $115,000, or 4%, during year ended December 31, 2015 as compared to 2014.

48

Same Store and New Store net operating income. The components of Same Store, New Store and total property net operating income and net income are detailed in the table below (in thousands):

	Year Ended December 31,				Increase			% Increase
	2015		2014		(Decrease)			(Decrease)
Same store (52 properties, exclusive of land held for development)
Property revenues
Rental revenues	$	57,045	$	54,596	$	2,449		4	%
Other revenues	15,468		15,516		(48		)	—	%
Total property revenues	72,513		70,112		2,401			3	%
Property expenses
Property operation and maintenance	16,029		15,199		830			5	%
Real estate taxes	9,511		9,397		114			1	%
Total property expenses	25,540		24,596		944			4	%
Total same store net operating income	46,973		45,516		1,457			3	%
New store (12 properties, exclusive of land held for development)
Property revenues
Rental revenues	14,798		1,697		13,101			772	%
Other revenues	6,105		573		5,532			965	%
Total property revenues	20,903		2,270		18,633			821	%
Property expenses
Property operation and maintenance	2,669		206		2,463			1,196	%
Real estate taxes	3,126		350		2,776			793	%
Total property expenses	5,795		556		5,239			942	%
Total new store net operating income	15,108		1,714		13,394			781	%
Total property net operating income	62,081		47,230		14,851			31	%
Less total other expenses, provision for income taxes and loss on disposal of assets	55,227		41,881		13,346			32	%
Income from continuing operations	6,854		5,349		1,505			28	%
Income from discontinued operations, net of taxes	11		2,397		(2,386		)	(100	)%
Net income	$	6,865	$	7,746	$	(881	)	(11	)%

49

Other expenses.  Our other expenses were $54,670,000 for the year ended December 31, 2015, as compared to $41,488,000 for the year ended December 31, 2014, an increase of $13,182,000, or 32%.  The primary components of other expenses, net are detailed in the table below (in thousands):

	Year Ended December 31,						Increase			% Increase
	2015			2014			(Decrease)			(Decrease)
General and administrative	$	20,312		$	15,274		$	5,038		33	%
Depreciation and amortization	19,761			15,725			4,036			26	%
Interest expense	14,910			10,579			4,331			41	%
Interest, dividend and other investment income	(313		)	(90		)	(223		)	248	%
Total other expenses	$	54,670		$	41,488		$	13,182		32	%

General and administrative.  General and administrative expenses increased approximately $5,038,000, or 33%, for the year ended December 31, 2015 as compared to 2014. The increase in general and administrative expenses included increased share-based compensation costs of $2,682,000, increased legal fees of $1,135,000, increased salaries and benefits of $587,000, increased acquisition costs of $237,000, increased office expenses of $283,000 and increased other expenses of $114,000.

Total compensation recognized in earnings for share-based payments for the years ended December 31, 2015 and 2014 was $7.3 million and $4.7 million, respectively. Based on our current financial projections, we expect approximately 82% of the unvested awards to vest over the next 39 months. As of December 31, 2015, there was approximately $9.9 million in unrecognized compensation cost related to outstanding non-vested performance-based shares, which are expected to vest over a period of 39 months, and approximately $3.4 million in unrecognized compensation cost related to outstanding non-vested time-based shares, which are expected to be recognized over a period of approximately 15 months beginning on January 1, 2016.

We expect to record approximately $13.3 million in share-based compensation subsequent to the year ended December 31, 2015. The unrecognized share-based compensation cost is expected to vest over a weighted average period of 25 months. The dilutive impact of the performance-based shares will be included in the denominator of the earnings per share calculation beginning in the period that the performance conditions are expected to be met.

Depreciation and amortization.  Depreciation and amortization increased $4,036,000, or 26%, for the year ended December 31, 2015 as compared to 2014. New Store depreciation increased $3,525,000 and Same Store depreciation increased $485,000. The increase in Same Store depreciation is attributable to redevelopment and re-tenanting investments. Depreciation on corporate assets and amortization of commission costs increased $26,000.

Interest expense.Interest expense increased $4,331,000, or 41%, for the year ended December 31, 2015 as compared to 2014.  An increase in our average outstanding notes payable balance of $142,738,000 accounted for $4,651,000 in increased interest expense, offset by a decrease in our effective interest rate to 3.11% for the year ended December 31, 2015 as compared to 3.26% for the year ended December 31, 2014, resulting in a $633,000 decrease in interest expense. Amortization of loan fees increased interest expense by $313,000 for the year ended December 31, 2015 as compared to the year ended December 31, 2014.

Interest, dividend and other investment income.Interest, dividend and other investment income increased $223,000, or 248%, for the year ended December 31, 2015 as compared to 2014. During the year ended December 31, 2015, our interest income increased $191,000, our gains on sales of investments in available-for-sale securities increased $44,000 and our dividend income decreased $12,000 as compared to the amounts realized during the year ended December 31, 2014.

50

Discontinued operations.  Discontinued operations are comprised of the of three office buildings known as Zeta, Royal Crest and Featherwood, located in Houston, Texas. On December 31, 2014, we completed the sale of the three office buildings for $10.3 million. As part of the transaction, we provided short-term seller financing of $2.5 million. We recorded a gain on sale of $4.4 million, including recognizing a $1.9 million gain on sale for the year ended December 31, 2015 and deferring the remaining $2.5 million gain on sale to be recognized upon receipt of principal payments on the financing provided by us.

  The primary components of discontinued operations are detailed in the table below (in thousands):

	Year Ended December 31,
	2015		2014
Property revenues
Rental revenues	$	51	$	1,560
Other revenues	—		66
Total property revenues	51		1,626
Property expenses
Property operation and maintenance	41		562
Real estate taxes	—		172
Total property expenses	41		734
Other expenses
Interest expense	—		314
Depreciation and amortization	—		58
Total other expense	—		372
Income before loss on disposal of assets and income taxes	10		520
Provision for income taxes	—		(10		)
Gain on sale or disposal of property or assets in discontinued operations	1		1,887
Income from discontinued operations	$	11	$	2,397

51

Year Ended December 31, 2014 Compared to Year Ended December 31, 2013

The following table provides a general comparison of our results of operations for the years ended December 31, 2014 and December 31, 2013 (dollars in thousands, except per share data):

	Year Ended December 31,
	2014			2013
Number of properties owned and operated(1)	63			57
Aggregate gross leasable area (sq. ft.)	5,485,793			4,853,930
Ending occupancy rate - operating portfolio(2)	87		%	88		%
Ending occupancy rate - all properties	87		%	87		%
Total property revenues	$	72,382		$	60,492
Total property expenses	25,152			22,678
Total other expenses	41,488			33,851
Provision for income taxes	282			293
Loss on disposal of assets	111			49
Income from continuing operations	5,349			3,621
Income from discontinued operations, net of taxes	510			298
Gain on sale of property from discontinued operations	1,887			—
Net income	7,746			3,919
Less:  Net income attributable to noncontrolling interests	160			125
Net income attributable to Whitestone REIT	$	7,586		$	3,794
Funds from operations core(3)	$	28,153		$	20,796
Property net operating income (4)	47,230			37,814
Distributions paid on common shares and OP units	26,089			20,985
Distributions per common share and OP unit	$	1.1400		$	1.1400
Distributions paid as a % of funds from operations core	93		%	101		%

⁽¹⁾   Excludes 112,400 square feet of gross leasable area in three office buildings sold on December 31, 2014, Zeta, Royal Crest and Featherwood, located in Houston, Texas.

⁽²⁾   Excludes (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.

⁽³⁾   For an explanation and reconciliation of funds from operations to net income, see “Funds From Operations” below.

⁽⁴⁾   For an explanation and reconciliation of property net operating income to net income, see “Property Net Operating Income” below.

52

Property revenues. We had rental income and tenant reimbursements of approximately $72,382,000 for the year ended December 31, 2014 as compared to $60,492,000 for the year ended December 31, 2013, an increase of $11,890,000, or 20%. The year ended December 31, 2014 included $10,762,000 in increased revenues from New Store operations. We define “New Stores” as properties acquired since the beginning of the period being compared. For purposes of comparing the year ended December 31, 2014 to the year ended December 31, 2013, New Stores include properties acquired between January 1, 2013 and December 31, 2014. During the twelve months ended December 31, 2014, Same Store revenues increased $1,128,000 in the aggregate. We define “Same Stores” as properties owned during the entire period being compared. For purposes of comparing the year ended December 31, 2014 to the year ended December 31, 2013, Same Stores include properties owned from January 1, 2013 to December 31, 2014. Same Store average occupancy increased from 85.6% for the year ended December 31, 2013 to 86.1% for the year ended December 31, 2014, increasing Same Store revenue $303,000. The Same Store revenue rate per average leased square foot increased $0.23 for the year ended December 31, 2014 to $15.66 per average leased square foot as compared to the year ended December 31, 2013 revenue rate per average leased square foot of $15.43, increasing Same Store revenue $825,000. The revenue rate per average leased square feet is calculated by dividing the total revenue by the average square feet leased during the period.

Property expenses.  Our property expenses were $25,152,000 for the year ended December 31, 2014, as compared to $22,678,000 for the year ended December 31, 2013, an increase of $2,474,000, or 11%. The primary components of total property expenses, Same Store property expenses and New Store property expenses are detailed in the tables below (in thousands):

	Year Ended December 31,				Increase			% Increase
Overall Property Expenses	2014		2013		(Decrease)			(Decrease)
Real estate taxes	$	9,747	$	8,599	$	1,148		13	%
Utilities	4,235		3,518		717			20	%
Contract services	4,295		3,894		401			10	%
Repairs and maintenance	2,370		2,120		250			12	%
Bad debt	1,573		1,649		(76		)	(5	)%
Labor and other	2,932		2,898		34			1	%
Total	$	25,152	$	22,678	$	2,474		11	%

	Year Ended December 31,				Increase			% Increase
Same Store Property Expenses	2014		2013		(Decrease)			(Decrease)
Real estate taxes	$	7,703	$	7,715	$	(12	)	—	%
Utilities	3,497		3,320		177			5	%
Contract services	3,596		3,660		(64		)	(2	)%
Repairs and maintenance	1,973		2,035		(62		)	(3	)%
Bad debt	1,279		1,571		(292		)	(19	)%
Labor and other	2,448		2,818		(370		)	(13	)%
Total	$	20,496	$	21,119	$	(623	)	(3	)%

	Year Ended December 31,				Increase		% Increase
New Store Property Expenses	2014		2013		(Decrease)		(Decrease)
Real estate taxes	$	2,044	$	884	$	1,160	Not meaningful
Utilities	738		198		540		Not meaningful
Contract services	699		234		465		Not meaningful
Repairs and maintenance	397		85		312		Not meaningful
Bad debt	294		78		216		Not meaningful
Labor and other	484		80		404		Not meaningful
Total	$	4,656	$	1,559	$	3,097	Not meaningful

53

Real estate taxes.  Real estate taxes increased $1,148,000, or 13%, during the year ended December 31, 2014 as compared to 2013, primarily as a result of New Store real estate taxes, which increased $1,160,000. Same Store real estate taxes decreased $12,000 for the year ended December 31, 2014 as compared to the year ended December 31, 2013. We actively work to keep our valuations and resulting taxes low because a majority of these taxes are charged to our tenants through triple net leases, and we strive to keep these charges to our tenants as low as possible.

Utilities.  Utilities increased $717,000, or 20%, during the year ended December 31, 2014 as compared to 2013. The increase in utility expenses was primarily attributable to New Store increases of $540,000 for the year ended December 31, 2014. Same Store utilities expenses increased approximately $177,000, or 5%, during the year ended December 31, 2014 as compared to 2013. The majority of the Same Store increase was attributable to increased electricity usage and related charges.

Contract services. Contract services increased $401,000, or 10%, during the year ended December 31, 2014 as compared to 2013, primarily as a result of New Store contract services, which increased $465,000. Same Store contract services decreased $64,000, or 2%.

Repairs and maintenance. Repairs and maintenance increased $250,000, or 12%, during the year ended December 31, 2014 as compared to 2013. New Store repairs and maintenance increased $312,000 for the year ended December 31, 2014 as compared to 2013. Same Store repairs and maintenance decreased $62,000, or 3%, during year ended December 31, 2014 as compared to 2013.

Bad debt.  Bad debt for the year ended December 31, 2014 decreased $76,000, or 5%, as compared to 2013. New Store bad debt increased $216,000 for the year ended December 31, 2014 as compared to the year ended December 31, 2013. Same Store bad debt decreased $292,000 or 19% for the year ended December 31, 2014 as compared to the year ended December 31, 2013. The overall bad debt expense was approximately 2% of revenue for the year ended December 31, 2014 and approximately 3% of revenue for the year ended December 31, 2013. We vigorously pursue past due accounts, but expect collection of rents to continue to be challenging for the foreseeable future.

Labor and other.  Labor and other expenses increased $34,000, or 1%, for year ended December 31, 2014 as compared to 2013. New Store labor and other expenses increased $404,000 for the year ended December 31, 2014 as compared to 2013. Same Store labor and other expenses decreased $370,000, or 13%, during year ended December 31, 2014 as compared to 2013.

54

Same Store and New Store net operating income. The components of Same Store, New Store and total property net operating income and net income are detailed in the table below (in thousands):

	Year ended December 31,				Increase			% Increase
	2014		2013		(Decrease)			(Decrease)
Same store (48 properties)
Property revenues
Rental revenues	$	43,585	$	43,006	$	579		1	%
Other revenues	12,574		12,025		549			5	%
Total property revenues	56,159		55,031		1,128			2	%
Property expenses
Property operation and maintenance	12,793		13,394		(601		)	(4	)%
Real estate taxes	7,703		7,725		(22		)	—	%
Total property expenses	20,496		21,119		(623		)	(3	)%
Total same store net operating income	35,663		33,912		1,751			5	%
New store (15 properties)
Property revenues
Rental revenues	12,708		4,291		8,417			196	%
Other revenues	3,515		1,170		2,345			200	%
Total property revenues	16,223		5,461		10,762			197	%
Property expenses
Property operation and maintenance	2,612		685		1,927			281	%
Real estate taxes	2,044		874		1,170			134	%
Total property expenses	4,656		1,559		3,097			199	%
Total new store net operating income	11,567		3,902		7,665			196	%
Total property net operating income	47,230		37,814		9,416			25	%
Less total other expenses, provision for income taxes and loss on disposal of assets	41,881		34,193		7,688			22	%
Income from continuing operations	5,349		3,621		1,728			48	%
Income from discontinued operations, net of taxes	2,397		298		2,099			704	%
Net income	$	7,746	$	3,919	$	3,827		98	%

55

Other expenses.  Our other expenses were $41,488,000 for the year ended December 31, 2014, as compared to $33,851,000 for the year ended December 31, 2013, an increase of $7,637,000, or 23%.  The primary components of other expenses, net are detailed in the table below (in thousands):

	Year Ended December 31,						Increase		% Increase
	2014			2013			(Decrease)		(Decrease)
General and administrative	$	15,274		$	10,912		$	4,362	40	%
Depreciation and amortization	15,725			13,100			2,625		20	%
Interest expense	10,579			9,975			604		6	%
Interest, dividend and other investment income	(90		)	(136		)	46		(34	)%
Total other expenses	$	41,488		$	33,851		$	7,637	23	%

General and administrative.  General and administrative expenses increased approximately $4,362,000, or 40%, for the year ended December 31, 2014 as compared to 2013. The increase in general and administrative expenses included increased share-based compensation costs of $2,381,000, increased payroll costs of $1,601,000, increased acquisition costs of $176,000, increased office expenses of $113,000 and increased other expenses of $91,000.

Total compensation recognized in earnings for share-based payments for the years ended December 31, 2014 and 2013 was $4.7 million and $2.3 million, respectively. Based on our current financial projections, we expect approximately 81% of the unvested awards to vest over the next 54 months. As of December 31, 2014, there was approximately $15.7 million in unrecognized compensation cost related to outstanding non-vested performance-based shares, which are expected to vest over a period of 54 months and approximately $0.8 million in unrecognized compensation cost related to outstanding non-vested time-based shares, which are expected to be recognized over a period of approximately 27 months beginning on January 1, 2015.

We expect to record approximately $16.5 million in share-based compensation subsequent to the year ended December 31, 2014. The unrecognized share-based compensation cost is expected to vest over a weighted average period of 38 months. The dilutive impact of the performance-based shares will be included in the denominator of the earnings per share calculation beginning in the period that the performance conditions are expected to be met.

Depreciation and amortization.  Depreciation and amortization increased $2,625,000, or 20%, for the year ended December 31, 2014 as compared to 2013. New Store depreciation increased $1,901,000 and Same Store depreciation increased $667,000. The increase in Same Store depreciation is attributable to redevelopment and re-tenanting investments. Depreciation on corporate assets and amortization of commission costs increased $57,000.

Interest expense.Interest expense increased $604,000, or 6%, for the year ended December 31, 2014 as compared to 2013.  An increase in our average outstanding notes payable balance of $59,113,000 accounted for $2,176,000 in increased interest expense, offset by a decrease in our effective interest rate to 3.26% for the year ended December 31, 2014 versus 3.68% for the year ended December 31, 2013, resulting in a $1,255,000 decrease in interest expense. Early extinguishment of debt fees of $169,000 incurred during the year ended December 31, 2013 and decreased amortized loan fees of $148,000 both decreased interest expense for the year ended December 31, 2014 as compared to the year ended December 31, 2013.

Interest, dividend and other investment income.Interest, dividend and other investment income decreased $46,000, or 34%, for the year ended December 31, 2014 as compared to 2013. During the year ended December 31, 2014, our gains on sales of investments in available-for-sale securities decreased $41,000, our dividend income decreased $12,000 and our interest income increased $7,000 as compared to the amounts realized during the year ended December 31, 2013.

56

Discontinued operations.  Discontinued operations are comprised of the of three office buildings known as Zeta, Royal Crest and Featherwood, located in Houston, Texas. On December 31, 2014, we completed the sale of the three office buildings for $10.3 million. As part of the transaction, we provided short-term seller financing of $2.5 million. We recorded a gain on sale of $4.4 million, including recognizing a $1.9 million gain on sale for the year ended December 31, 2014 and deferring the remaining $2.5 million gain on sale to be recognized upon receipt of principal payments on the financing provided by us.

  The primary components of discontinued operations are detailed in the table below (in thousands):

	Year Ended December 31,
	2014			2013
Property revenues
Rental revenues	$	1,560		$	1,565
Other revenues	66			88
Total property revenues	1,626			1,653
Property expenses
Property operation and maintenance	562			664
Real estate taxes	172			168
Total property expenses	734			832
Other expenses
Interest expense	314			329
Depreciation and amortization	58			175
Total other expense	372			504
Income before loss on disposal of assets and income taxes	520			317
Provision for income taxes	(10		)	(12		)
Gain (loss) on sale or disposal of property or assets in discontinued operations	1,887			(7		)
Income from discontinued operations	$	2,397		$	298

57

Reconciliation of Non-GAAP Financial Measures

Funds From Operations (“FFO”)

The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as net income (loss) available to common shareholders computed in accordance with U.S. GAAP, excluding gains or losses from sales of operating real estate assets, impairment charges on properties held for investment and extraordinary items, plus depreciation and amortization of operating properties, including our share of unconsolidated real estate joint ventures and partnerships.  We calculate FFO in a manner consistent with the NAREIT definition.

Management uses FFO as a supplemental measure to conduct and evaluate our business because there are certain limitations associated with using U.S. GAAP net income (loss) alone as the primary measure of our operating performance.

Historical cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real estate assets diminishes predictably over time.  Because real estate values instead have historically risen or fallen with market conditions, management believes that the presentation of operating results for real estate companies that use historical cost accounting is insufficient by itself.  In addition, securities analysts, investors and other interested parties use FFO as the primary metric for comparing the relative performance of equity REITs.  

FFO should not be considered as an alternative to net income or other measurements under U.S. GAAP, as an indicator of our operating performance or to cash flows from operating, investing or financing activities as a measure of liquidity.  FFO does not reflect working capital changes, cash expenditures for capital improvements or principal payments on indebtedness. Although our calculation of FFO is consistent with that of NAREIT, there can be no assurance that FFO presented by us is comparable to similarly titled measures of other REITs.

FFO Core

Management believes that the computation of FFO in accordance with NAREIT's definition includes certain items that are not indicative of the results provided by our operating portfolio and affect the comparability of our 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. Therefore, in addition to FFO, management uses FFO Core, which we define to exclude such items. Management believes that these adjustments are appropriate in determining FFO Core as they are not indicative of the operating performance of our assets. In addition, we believe that FFO Core is a useful supplemental measure for the investing community to use in comparing us to other REITs as many REITs provide some form of adjusted or modified FFO. However, there can be no assurance that FFO Core presented by us is comparable to the adjusted or modified FFO of other REITs.

Below are the calculations of FFO and FFO Core and the reconciliations to net income, which we believe is the most comparable GAAP financial measure (in thousands):

	Year Ended December 31,
	2015		2014			2013
FFO AND FFO CORE
Net income attributable to Whitestone REIT	$	6,749	$	7,586		$	3,794
Depreciation and amortization of real estate assets (1)	19,646		15,950			13,339
Loss (gain) on disposal or sale of assets (1)	185		(1,776		)	56
Net income attributable to noncontrolling interests (1)	116		160			125
FFO	$	26,696	$	21,920		$	17,314
Share-based compensation expense	$	7,339	$	4,736		$	2,284
Acquisition costs	1,719		1,341			1,010
Rental support payments received	—		156			188
FFO Core	$	35,754	$	28,153		$	20,796

⁽¹⁾     Includes amounts from discontinued operations.

58

Property Net Operating Income (“NOI”)

Management believes that NOI is a useful measure of our property operating performance. We define NOI as operating revenues (rental and other revenues) less property and related expenses (property operation and maintenance and real estate taxes). Other REITs may use different methodologies for calculating NOI and, accordingly, our NOI may not be comparable to other REITs. Because NOI excludes general and administrative expenses, depreciation and amortization, involuntary conversion, interest expense, interest income, provision for income taxes and gain or loss on sale or disposition of assets, 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. We use NOI to evaluate our operating performance since NOI allows us to evaluate the impact that factors such as occupancy levels, lease structure, lease rates and tenant base have on our results, margins and returns. In addition, management believes that NOI provides useful information to the investment community about our 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 our 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 and gain or loss on sale or disposition of assets, the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties.

Below is the calculation of NOI and the reconciliation to net income, which we believe is the most comparable GAAP financial measure (in thousands):

	Year Ended December 31,
PROPERTY NET OPERATING INCOME (“NOI”)	2015			2014			2013
Net income attributable to Whitestone REIT	$	6,749		$	7,586		$	3,794
General and administrative expenses	20,312			15,274			10,912
Depreciation and amortization	19,761			15,725			13,100
Interest expense	14,910			10,579			9,975
Interest, dividend and other investment income	(313		)	(90		)	(136		)
Provision for income taxes	372			282			293
Loss on sale or disposal of assets	185			111			49
Income from discontinued operations	(11		)	(510		)	(298		)
Gain on sale of property	—			(1,887		)	—
Net income attributable to noncontrolling interests	116			160			125
NOI	$	62,081		$	47,230		$	37,814

Taxes

We elected to be taxed as a REIT under the Code beginning with our taxable year ended December 31, 1999.  As a REIT, we generally are not subject to federal income tax on income that we distribute to our shareholders.  If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate rates.  We believe that we are organized and operate in a manner to qualify and be taxed as a REIT, and we intend to operate so as to remain qualified as a REIT for federal income tax purposes.

Inflation

We anticipate that the majority of our leases will continue to be triple-net leases or otherwise provide that tenants pay for increases in operating expenses and will contain provisions that we believe will mitigate the effect of inflation.  In addition, many of our leases are for terms of less than five years, which allows us to adjust rental rates to reflect inflation and other changing market conditions when the leases expire.  Consequently, increases due to inflation, as well as ad valorem tax rate increases, generally do not have a significant adverse effect upon our operating results.

Off-Balance Sheet Arrangements

We had no significant off-balance sheet arrangements as of December 31, 2015.

59

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.

Our future income, cash flows and fair value relevant to our financial instruments depend upon prevailing market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates. Based upon the nature of our operations, we are not subject to foreign exchange rate or commodity price risk. The principal market risk to which we are exposed is the risk related to interest rate fluctuations. Many factors, including governmental monetary and tax policies, domestic and international economic and political considerations, and other factors that are beyond our control contribute to interest rate risk. Our interest rate risk objective is to limit the impact of interest rate fluctuations on earnings and cash flows and to lower our overall borrowing costs. To achieve this objective, we manage our exposure to fluctuations in market interest rates for our borrowings through the use of fixed rate debt instruments to the extent that reasonably favorable rates are obtainable.

All of our financial instruments were entered into for other than trading purposes.

Fixed Interest Rate Debt

As of December 31, 2015, $372.1 million, or approximately 74%, of our outstanding debt was subject to fixed interest rates, which limit the risk of fluctuating interest rates. Though a change in the market interest rates affects the fair market value, it does not impact net income to shareholders or cash flows. Our total outstanding fixed interest rate debt has an average effective interest rate at this time of approximately 3.82% per annum with expirations ranging from 2016 to 2024 (see Note 8 to our accompanying consolidated financial statements for further detail). Holding other variables constant, a 1% increase or decrease in interest rates would cause a $16.8 million decline or increase, respectively, in the fair value for our fixed rate debt.

Variable Interest Rate Debt

As of December 31, 2015, $127.6 million, or approximately 26%, of our outstanding debt was subject to floating interest rates of LIBOR plus 1.40% to 1.95% and not currently subject to a hedge. The impact of a 1% increase or decrease in interest rates on our floating rate debt would result in a decrease or increase, respectively, of annual net income of approximately $1.3 million.

Item 8.  Financial Statements and Supplementary Data.

The information required by this Item 8 is incorporated by reference to our Financial Statements beginning on page F-1 of this Annual Report on Form 10-K.

Item 9.  Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A.  Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

In connection with the preparation of this Annual Report on Form 10-K, as of December 31, 2015, an evaluation was performed under the supervision and with the participation of the Company's management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act. In performing this evaluation, management reviewed the selection, application and monitoring of our historical accounting policies. Based on that evaluation, the CEO and CFO concluded that as of December 31, 2015, these disclosure controls and procedures were effective and designed to ensure that the information required to be disclosed in our reports filed with the SEC is recorded, processed, summarized and reported on a timely basis.  In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.  Management is required to apply judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, we

60

conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under this framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2015.

The Company's independent registered public accounting firm has issued a report on the effectiveness of the Company's internal control over financial reporting, which appears on page F-3 of this Annual Report on Form 10-K.

Changes in Internal Control Over Financial Reporting

There have been no changes during the Company's quarter ended December 31, 2015, in the Company's internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Item 9B.  Other Information.

None.

61

PART III

Item 10.  Trustees, Executive Officers and Corporate Governance.

The information required by Item 10 of Form 10-K is incorporated herein by reference to such information as set forth in the definitive proxy statement for our 2016 annual meeting of shareholders.

Item 11.  Executive Compensation.

The information required by Item 11 of Form 10-K is incorporated herein by reference to such information as set forth in the definitive proxy statement for our 2016 annual meeting of shareholders.

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters.

The following table provides information regarding our equity compensation plans as of December 31, 2015:

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights			Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)			(b)		(c)
Equity compensation plans approved by security holders	—	(1	)	$	—	957,084	(2)
Equity compensation plans not approved by security holders	—			—		—	(3)
Total	—			$	—	957,084

⁽¹⁾ Excludes 3,119,221 common shares subject to outstanding restricted common share units granted pursuant to our 2008 Long-Term Equity Incentive Ownership Plan, as amended (the “Plan”).

⁽²⁾ Pursuant the Plan, the maximum aggregate number of common shares that may be issued under the Plan will be increased upon each issuance of common shares by the Company so that at any time the maximum number of shares that may be issued under the Plan shall equal 12.5% of the aggregate number of common shares of the Company and OP units issued and outstanding (other than units issued to or held by the Company).

⁽³⁾ Excludes 8,333 restricted common shares issued to trustees outside the Plan.

The remaining information required by Item 12 of Form 10-K is incorporated by reference to such information as set forth in the definitive proxy statement for our 2016 annual meeting of shareholders.

Item 13.  Certain Relationships and Related Transactions, and Director Independence.

The information required by Item 13 of Form 10-K is incorporated herein by reference to such information as set forth in the definitive proxy statement for our 2016 annual meeting of shareholders.

Item 14.  Principal Accountant Fees and Services.

The information required by Item 14 of Form 10-K is incorporated herein by reference to such information as set forth in the definitive proxy statement for our 2016 annual meeting of shareholders.

62

PART IV

Item 15. Exhibits and Financial Statement Schedules.

1. Financial Statements. The list of our financial statements filed as part of this Annual Report on Form 10-K is set forth on page F-1 herein.

2. Financial Statement Schedules.

a. Schedule II - Valuation and Qualifying Accounts

b. Schedule III - Real Estate and Accumulated Depreciation

All other financial statement schedules have been omitted because the required information of such schedules is not present, is not present in amounts sufficient to require a schedule or is included in the consolidated financial statements.

3. Exhibits. The list of exhibits filed as part of this Annual Report on Form 10-K in response to Item 601 of Regulation S-K is submitted on the Exhibit Index attached hereto and incorporated herein by reference.

63

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			WHITESTONE REIT
Date:	February 29, 2016	By:	/s/ James C. Mastandrea
			James C. Mastandrea, Chairman and CEO

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENT, that each person whose signature appears below constitutes and appoints James C. Mastandrea and David K. Holeman, and each of them, acting individually, as his attorney-in-fact, each with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. 

February 29, 2016	/s/ James C. Mastandrea
	James C. Mastandrea, Chairman and CEO
	(Principal Executive Officer)
February 29, 2016	/s/ David K. Holeman
	David K. Holeman, Chief Financial Officer
	(Principal Financial and Principal Accounting Officer)
February 29, 2016	/s/ Daryl J. Carter
	Daryl J. Carter, Trustee
February 29, 2016	/s/ Donald F. Keating
	Donald F. Keating, Trustee
February 29, 2016	/s/ Paul T. Lambert
	Paul T. Lambert, Trustee
February 29, 2016	/s/ Jack L. Mahaffey
	Jack L. Mahaffey, Trustee

64

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
		Page
	Reports of Independent Registered Public Accounting Firm	F- 2
	Consolidated Balance Sheets as of December 31, 2015 and 2014	F- 4
	Consolidated Statements of Operations and Comprehensive Income for the Years Ended December 31, 2015, 2014 and 2013	F- 5
	Consolidated Statements of Changes in Equity for the Years Ended December 31, 2015, 2014 and 2013	F- 7
	Consolidated Statements of Cash Flows for the Years Ended December 31, 2015, 2014 and 2013	F- 8
	Notes to Consolidated Financial Statements	F- 10
	Schedule II – Valuation and Qualifying Accounts	F- 33
	Schedule III – Real Estate and Accumulated Depreciation	F- 34

All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.

F- 1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Trustees and Shareholders of

   Whitestone REIT:

We have audited the accompanying consolidated balance sheets of Whitestone REIT and subsidiaries (the “Company”) as of December 31, 2015 and 2014, and the related consolidated statements of operations and comprehensive income, changes in equity and cash flows for each of the years in the three year period ended December 31, 2015.  In connection with our audits of the consolidated financial statements, we have also audited the financial statement schedules as listed in the accompanying index.  These consolidated financial statements and financial statement schedules are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Whitestone REIT and subsidiaries as of December 31, 2015 and 2014, and the consolidated results of their operations and their cash flows for each of the years in the three year period ended December 31, 2015 in conformity with U.S. generally accepted accounting principles.  Also, in our opinion, the related financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Whitestone REIT and subsidiaries' internal control over financial reporting as of December 31, 2015, based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated February 29, 2016 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

/s/ Pannell Kerr Forster of Texas, P.C.

Houston, Texas

February 29, 2016

F- 2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 To the Board of Trustees and Shareholders of

   Whitestone REIT:

We have audited the internal control over financial reporting of Whitestone REIT and subsidiaries (the “Company”) as of December 31, 2015, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Whitestone REIT and subsidiaries as of December 31, 2015 and 2014, and the related consolidated statements of operations and comprehensive income, changes in equity, and cash flows for each of the years in the three year period ended December 31, 2015, and our report dated February 29, 2016, expressed an unqualified opinion on those consolidated financial statements.

/s/ Pannell Kerr Forster of Texas, P.C.

Houston, Texas

February 29, 2016

F- 3

Whitestone REIT and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
	December 31,
	2015			2014
ASSETS
Real estate assets, at cost
Property	$	835,538		$	673,655
Accumulated depreciation	(89,580		)	(71,587		)
Total real estate assets	745,958			602,068
Cash and cash equivalents	2,587			4,236
Restricted cash	121			—
Marketable securities	435			973
Escrows and acquisition deposits	6,668			4,092
Accrued rents and accounts receivable, net of allowance for doubtful accounts	15,466			11,834
Unamortized lease commissions and loan costs	9,970			8,879
Prepaid expenses and other assets	2,672			2,215
Total assets	$	783,877		$	634,297
LIABILITIES AND EQUITY
Liabilities:
Notes payable	$	499,747		$	394,093
Accounts payable and accrued expenses	24,051			15,882
Tenants' security deposits	5,254			4,372
Dividends and distributions payable	7,834			6,627
Total liabilities	536,886			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 December 31, 2015 and December 31, 2014, respectively	—			—
Common shares, $0.001 par value per share; 400,000,000 shares authorized; 26,991,493 and 22,835,695 issued and outstanding as of December 31, 2015 and December 31, 2014, respectively	27			23
Additional paid-in capital	359,971			304,078
Accumulated deficit	(116,895		)	(93,938		)
Accumulated other comprehensive loss	(129		)	(91		)
Total Whitestone REIT shareholders' equity	242,974			210,072
Noncontrolling interest in subsidiary	4,017			3,251
Total equity	246,991			213,323
Total liabilities and equity	$	783,877		$	634,297

See the accompanying notes to consolidated financial statements.

F- 4

Whitestone REIT and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(in thousands, except per share data)

	Year Ended December 31,
	2015			2014			2013
Property revenues
Rental revenues	$	71,843		$	56,293		$	47,297
Other revenues	21,573			16,089			13,195
Total property revenues	93,416			72,382			60,492
Property expenses
Property operation and maintenance	18,698			15,405			14,079
Real estate taxes	12,637			9,747			8,599
Total property expenses	31,335			25,152			22,678
Other expenses (income)
General and administrative	20,312			15,274			10,912
Depreciation and amortization	19,761			15,725			13,100
Interest expense	14,910			10,579			9,975
Interest, dividend and other investment income	(313		)	(90		)	(136		)
Total other expense	54,670			41,488			33,851
Income from continuing operations before loss on sale or disposal of assets and income taxes	7,411			5,742			3,963
Provision for income taxes	(372		)	(282		)	(293		)
Loss on sale or disposal of assets	(185		)	(111		)	(49		)
Income from continuing operations	6,854			5,349			3,621
Income from discontinued operations	11			510			298
Gain on sale of property from discontinued operations	—			1,887			—
Income from discontinued operations	11			2,397			298
Net income	6,865			7,746			3,919
Less: Net income attributable to noncontrolling interests	116			160			125
Net income attributable to Whitestone REIT	$	6,749		$	7,586		$	3,794

See the accompanying notes to consolidated financial statements.

F- 5

Whitestone REIT and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(in thousands, except per share data)

	Year Ended December 31,
	2015			2014			2013
Basic Earnings Per Share:
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	$	0.25		$	0.23		$	0.19
Income from discontinued operations attributable to Whitestone REIT	0.00			0.10			0.02
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	0.25		$	0.33		$	0.21
Diluted Earnings Per Share:
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	$	0.24		$	0.22		$	0.19
Income from discontinued operations attributable to Whitestone REIT	0.00			0.10			0.01
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	0.24		$	0.32		$	0.20
Weighted average number of common shares outstanding:
Basic	24,631			22,278			18,027
Diluted	25,683			22,793			18,273
Distributions declared per common share / OP unit	$	1.1400		$	1.1400		$	1.1400
Consolidated Statements of Comprehensive Income
Net income	$	6,865		$	7,746		$	3,919
Other comprehensive gain (loss)
Unrealized gain (loss) on cash flow hedging activities	46			(136		)	173
Unrealized gain (loss) on available-for-sale marketable securities	(85		)	96			180
Comprehensive income	6,826			7,706			4,272
Less: Comprehensive income attributable to noncontrolling interests	115			160			136
Comprehensive income attributable to Whitestone REIT	$	6,711		$	7,546		$	4,136

See the accompanying notes to consolidated financial statements.

F- 6

Whitestone REIT and Subsidiaries CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY  (in thousands, except per share and unit data)
											Accumulated
					Additional						Other			Total			Noncontrolling
	Common Shares				Paid-in			Accumulated			Comprehensive			Shareholders'			Interests					Total
	Shares		Amount		Capital			Deficit			Loss			Equity			Units		Dollars			Equity
Balance, December 31, 2012	16,943		$	16	$	224,237		$	(57,830	)	$	(392	)	$	166,031		685		$	6,856		$	172,887
Exchange of noncontrolling interest OP units for common shares	123		1		1,236			—			(3		)	1,234			(123	)	(1,234		)	—
Exchange offer costs	—		—		(40		)	—			—			(40		)	—		—			(40		)
Issuance of common shares - ATM Program (1)	282		—		4,191			—			—			4,191			—		—			4,191
Issuance of common shares under dividend reinvestment plan	7		—		99			—			—			99			—		—			99
Issuance of common shares - overnight offering (2)	4,600		5		59,691			—			—			59,696			—		—			59,696
Shared-based compensation	(11	)	—		2,157			—			—			2,157			—		—			2,157
Distributions	—		—		—			(21,685		)	—			(21,685		)	—		(662		)	(22,347		)
Unrealized gain on change in fair value of cash flow hedge	—		—		—			—			167			167			—		6			173
Unrealized gain on change in fair value of available-for sale marketable securities	—		—		—			—			174			174			—		6			180
Net income	—		—		—			3,794			—			3,794			—		125			3,919
Balance, December 31, 2013	21,944		22		291,571			(75,721		)	(54		)	215,818			562		5,097			220,915
Exchange of noncontrolling interest OP units for common shares	164		1		1,484			—			2			1,487			(164	)	(1,487		)	—
Exchange offer costs	—		—		(136		)	—			—			(136		)	—		—			(136		)
Issuance of common shares - ATM Program (3)	456		—		6,458			—			—			6,458			—		—			6,458
Issuance of common shares under dividend reinvestment plan	7		—		94			—			—			94			—		—			94
Repurchase of common shares (4)	(2	)	—		(24		)	—			—			(24		)	—		—			(24		)
Share-based compensation	267		—		4,631			—			—			4,631			—		—			4,631
Distributions	—		—		—			(25,803		)	—			(25,803		)	—		(518		)	(26,321		)
Unrealized loss on change in fair value of cash flow hedge	—		—		—			—			(133		)	(133		)	—		(3		)	(136		)
Unrealized gain on change in fair value of available-for sale marketable securities	—		—		—			—			94			94			—		2			96
Net income	—		—		—			7,586			—			7,586			—		160			7,746
Balance, December 31, 2014	22,836		23		304,078			(93,938		)	(91		)	210,072			398		3,251			213,323
Exchange of noncontrolling interest OP units for common shares	21		—		173			—			1			174			(21	)	(174		)	—
Issuance of common shares under dividend reinvestment plan	7		—		95			—			—			95			—		—			95
Issuance of common shares, net of offering costs	3,750		4		49,645			—			—			49,649			—		—			49,649
Issuance of OP units	—		—		—			—			—			—			120		1,333			1,333
Repurchase of common shares (4)	(101	)	—		(1,357		)	—			—			(1,357		)	—		—			(1,357		)
Share-based compensation	478		—		7,337			—			—			7,337			—		—			7,337
Distributions	—		—		—			(29,706		)	—			(29,706		)	—		(509		)	(30,215		)
Unrealized gain on change in fair value of cash flow hedge	—		—		—			—			45			45			—		1			46
Unrealized loss on change in fair value of available-for sale marketable securities	—		—		—			—			(84		)	(84		)	—		(1		)	(85		)
Net income	—		—		—			6,749			—			6,749			—		116			6,865
Balance, December 31, 2015	26,991		$	27	$	359,971		$	(116,895	)	$	(129	)	$	242,974		497		$	4,017		$	246,991

⁽¹⁾  Net of offering costs of $0.2 million.

⁽²⁾  Net of offering costs of $2.6 million.

⁽³⁾  Net of offering costs of $0.1 million.

⁽⁴⁾  During the years ended December 31, 2015 and 2014, the Company acquired common shares held by employees who tendered owned common shares to satisfy the tax withholding on the lapse of certain restrictions on restricted shares.

See the accompanying notes to consolidated financial statements.

F- 7

Whitestone REIT and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
	Year Ended December 31,
	2015			2014			2013
Cash flows from operating activities:
Net income from continuing operations	$	6,854		$	5,349		$	3,621
Net income from discontinued operations	11			2,397			298
Net income	6,865			7,746			3,919
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	19,761			15,725			13,100
Amortization of deferred loan costs	1,212			899			1,046
Amortization of notes payable discount	295			304			463
Gain on sale of marketable securities	(44		)	—			(41		)
Loss on sale or disposal of assets and properties	185			111			49
Bad debt expense	1,974			1,602			1,638
Share-based compensation	7,337			4,631			2,284
Changes in operating assets and liabilities:
Escrows and acquisition deposits	(2,576		)	(1,998		)	4,920
Accrued rent and accounts receivable	(5,606		)	(3,668		)	(3,589		)
Related party receivable	—			—			652
Unamortized lease commissions	(1,918		)	(1,526		)	(1,170		)
Prepaid expenses and other assets	394			605			938
Accounts payable and accrued expenses	7,419			2,257			(1,242		)
Tenants' security deposits	882			900			561
Net cash provided by operating activities	36,169			25,191			23,230
Net cash provided by operating activities of discontinued operations	11			450			654
Cash flows from investing activities:
Acquisitions of real estate	(147,950		)	(129,439		)	(119,102		)
Additions to real estate	(12,719		)	(9,330		)	(6,138		)
Proceeds from sales of marketable securities	496			—			747
Net cash used in investing activities	(160,173		)	(138,769		)	(124,493		)
Net cash provided by (used in) investing activities of discontinued operations	—			7,311			(153		)
Cash flows from financing activities:
Distributions paid to common shareholders	(28,457		)	(25,539		)	(20,294		)
Distributions paid to OP unit holders	(489		)	(550		)	(691		)
Proceeds from issuance of common shares, net of offering costs	49,649			6,458			63,887
Payments of exchange offer costs	—			(136		)	(40		)
Proceeds from revolving credit facility, net	107,500			85,300			65,800
Proceeds from notes payable	—			47,300			105,710
Repayments of notes payable	(2,847		)	(3,306		)	(110,829		)
Payments of loan origination costs	(1,534		)	(3,036		)	(2,796		)
Change in restricted cash	(121		)	—			—
Repurchase of common shares	(1,357		)	(24		)	—
Net cash provided by financing activities	122,344			106,467			100,747
Net cash used in financing activities of discontinued operations	—			(2,905		)	(38		)
Net decrease in cash and cash equivalents	(1,649		)	(2,255		)	(53		)
Cash and cash equivalents at beginning of period	4,236			6,491			6,544
Cash and cash equivalents at end of period	$	2,587		$	4,236		$	6,491

See the accompanying notes to consolidated financial statements.

F- 8

Whitestone REIT and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS Supplemental Disclosures (in thousands)
	Year Ended December 31,
	2015			2014			2013
Supplemental disclosure of cash flow information:
Cash paid for interest	$	13,470		$	9,562		$	9,179
Cash paid for taxes	$	315		$	238		$	237
Non cash investing and financing activities:
Disposal of fully depreciated real estate	$	57		$	6,092		$	278
Financed insurance premiums	$	1,057		$	888		$	883
Value of shares issued under dividend reinvestment plan	$	95		$	94		$	99
Value of common shares exchanged for OP units	$	174		$	1,484		$	1,236
Change in fair value of available-for-sale securities	$	85		$	96		$	180
Change in fair value of cash flow hedge	$	(46	)	$	(136	)	$	173
Debt assumed with acquisitions of real estate	$	—		$	2,586		$	11,100
Interest supplement assumed with acquisition of real estate	$	—		$	—		$	932
Acquisition of real estate in exchange for OP units	$	1,333		$	—		$	—

See the accompanying notes to consolidated financial statements.

F- 9

WHITESTONE REIT AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2015

1.  DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS

Whitestone REIT (“Whitestone”) was formed as a real estate investment trust, pursuant to the Texas Real Estate Investment Trust Act on August 20, 1998.  In July 2004, we changed our state of organization from Texas to Maryland pursuant to a merger where we merged directly with and into a Maryland real estate investment trust formed for the sole purpose of the reorganization and the conversion of each of our outstanding common shares of beneficial interest of the Texas entity into 1.42857 common shares of beneficial interest of the Maryland entity.  We serve as the general partner of Whitestone REIT Operating Partnership, L.P. (the “Operating Partnership” or “WROP” or “OP”), which was formed on December 31, 1998 as a Delaware limited partnership.  We currently conduct substantially all of our operations and activities through the Operating Partnership.  As the general partner of the Operating Partnership, we have the exclusive power to manage and conduct the business of the Operating Partnership, subject to certain customary exceptions.  As of December 31, 2015, 2014 and 2013, we owned and operated 70, 63, and 60 commercial properties, respectively, in and around Austin, Chicago, Dallas-Fort Worth, Houston, Phoenix and San Antonio.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation.  We are the sole general partner of the Operating Partnership and possess full legal control and authority over the operations of the Operating Partnership.  As of December 31, 2015, 2014 and 2013, we owned a majority of the partnership interests in the Operating Partnership.  Consequently, the accompanying consolidated financial statements include the accounts of the Operating Partnership.  All significant inter-company balances have been eliminated. Noncontrolling interest in the accompanying consolidated financial statements represents the share of equity and earnings of the Operating Partnership allocable to holders of partnership interests other than us.  Net income or loss is allocated to noncontrolling interests based on the weighted-average percentage ownership of the Operating Partnership during the year.  Issuance of additional common shares of beneficial interest in Whitestone (the “common shares”) and units of limited partnership interest in the Operating Partnership that are convertible into cash or, at our option, common shares on a one-for-one basis (the “OP units”) changes the percentage of ownership interests of both the noncontrolling interests and Whitestone.

Basis of Accounting.  Our financial records are maintained on the accrual basis of accounting whereby revenues are recognized when earned and expenses are recorded when incurred.

Use of Estimates.   The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Significant estimates that we use include the estimated fair values of properties acquired, the estimated useful lives for depreciable and amortizable assets and costs, the estimated allowance for doubtful accounts, the estimated fair value of interest rate swaps and the estimates supporting our impairment analysis for the carrying values of our real estate assets.  Actual results could differ from those estimates.

Reclassifications.  We have reclassified certain prior year amounts in the accompanying consolidated financial statements in order to be consistent with the current fiscal year presentation. These reclassifications had no effect on net income, total assets, total liabilities or equity. During 2014, we reclassified certain properties classified as discontinued operations to conform to the current year presentation. See Note 4 for additional discussion.

Restricted Cash. We classify all cash pledged as collateral to secure certain obligations and all cash whose use is limited as restricted cash. During 2015, pursuant to the terms of our $15.1 million4.99% Note, due January 6, 2024 (See Note 8), which is collateralized by our Anthem Marketplace property, we were required by the lenders thereunder to establish a cash management account controlled by the lenders to collect all amounts generated by our Anthem Marketplace property in order to collateralize such promissory note. As a result, these amounts are reported in the consolidated statements of cash flows under cash flows from financing activities.

F- 10

WHITESTONE REIT AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2015

Share-Based Compensation.   From time to time, we award nonvested restricted common share awards or restricted common share unit awards, which may be converted into common shares, to executive officers and employees under our 2008 Long-Term Equity Incentive Ownership Plan (the “2008 Plan”).  The vast majority of the awarded shares and units vest when certain performance conditions are met.  We recognize compensation expense when achievement of the performance conditions is probable based on management’s most recent estimates using the fair value of the shares as of the grant date.  We recognized $7.3 million, $4.7 million and $2.3 million in share-based compensation expense for the years ended December 31, 2015, 2014 and 2013, respectively.  

Noncontrolling Interests.  Noncontrolling interests are the portion of equity in a subsidiary not attributable to a parent.  The ownership interests not held by the parent are considered noncontrolling interests.  Accordingly, we have reported noncontrolling interests in equity on the consolidated balance sheets but separate from Whitestone’s equity.  On the consolidated statements of operations and comprehensive income, subsidiaries are reported at the consolidated amount, including both the amount attributable to Whitestone and noncontrolling interests.  Consolidated statements of changes in equity are included for both quarterly and annual financial statements, including beginning balances, activity for the period and ending balances for shareholders’ equity, noncontrolling interests and total equity.

Revenue Recognition.  All leases on our properties are classified as operating leases, and the related rental income is recognized on a straight-line basis over the terms of the related leases.  Differences between rental income earned and amounts due per the respective lease agreements are capitalized or charged, as applicable, to accrued rents and accounts receivable.  Percentage rents are recognized as rental income when the thresholds upon which they are based have been met.  Recoveries from tenants for taxes, insurance, and other operating expenses are recognized as revenues in the period the corresponding costs are incurred.  We have established an allowance for doubtful accounts against the portion of tenant accounts receivable which is estimated to be uncollectible.

Cash and Cash Equivalents.  We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.  Cash and cash equivalents as of December 31, 2015 and 2014 consisted of demand deposits at commercial banks and brokerage accounts.

Marketable Securities. We classify our existing marketable equity securities as available-for-sale in accordance with the Financial Accounting Standards Board's (“FASB”) Investments-Debt and Equity Securities guidance. These securities are carried at fair value with unrealized gains and losses reported in equity as a component of accumulated other comprehensive income or loss. The fair value of the marketable securities is determined using Level 1 inputs under FASB Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures.” Level 1 inputs represent quoted prices available in an active market for identical investments as of the reporting date. Gains and losses on securities sold are based on the specific identification method, and are reported as a component of interest, dividend and other investment income.

Real Estate

Development Properties.  Land, buildings and improvements are recorded at cost. Expenditures related to the development of real estate are carried at cost which includes capitalized carrying charges and development costs. Carrying charges (interest and real estate taxes) are capitalized as part of construction in progress. The capitalization of such costs ceases when the property, or any completed portion, becomes available for occupancy. For the year ended December 31, 2015, approximately $106,000 and $69,000 in interest expense and real estate taxes, respectively, were capitalized. For the year ended December 31, 2014, approximately $93,000 and $58,000 in interest expense and real estate taxes, respectively, were capitalized. For the year ended December 31, 2013, approximately $114,000 and $100,000 in interest expense and real estate taxes, respectively, were capitalized. 

F- 11

WHITESTONE REIT AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2015

Acquired Properties and Acquired Lease Intangibles.  We allocate the purchase price of the acquired properties to land, building and improvements, identifiable intangible assets and to the acquired liabilities based on their respective fair values at the time of purchase. Identifiable intangibles include amounts allocated to acquired out-of-market leases, the value of in-place leases and customer relationship value, if any. We determine fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends and specific market and economic conditions that may affect the property. Factors considered by management in our analysis of determining the as-if-vacant property value include an estimate of carrying costs during the expected lease-up periods considering market conditions, and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and estimates of lost rentals at market rates during the expected lease-up periods, tenant demand and other economic conditions. Management also estimates costs to execute similar leases including leasing commissions, tenant improvements, legal and other related expenses. Intangibles related to out-of-market leases and in-place lease value are recorded as acquired lease intangibles and are amortized as an adjustment to rental revenue or amortization expense, as appropriate, over the remaining terms of the underlying leases. Premiums or discounts on acquired out-of-market debt are amortized to interest expense over the remaining term of such debt.

Depreciation.  Depreciation is computed using the straight-line method over the estimated useful lives of 5 to 39 years for improvements and buildings, respectively.  Tenant improvements are depreciated using the straight-line method over the life of the improvement or remaining term of the lease, whichever is shorter.

Impairment.  We review our properties for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of the assets, including accrued rental income, may not be recoverable through operations.  We determine whether an impairment in value has occurred by comparing the estimated future cash flows (undiscounted and without interest charges), including the estimated residual value of the property, with the carrying cost of the property.  If impairment is indicated, a loss will be recorded for the amount by which the carrying value of the property exceeds its fair value.  Management has determined that there has been no impairment in the carrying value of our real estate assets as of December 31, 2015.

Accrued Rents and Accounts Receivable.  Included in accrued rent and accounts receivable are base rents, tenant reimbursements and receivables attributable to recording rents on a straight-line basis. An allowance for the uncollectible portion of accrued rents and accounts receivable is determined based upon customer credit-worthiness (including expected recovery of our claim with respect to any tenants in bankruptcy), historical bad debt levels, and current economic trends. As of December 31, 2015 and 2014, we had an allowance for uncollectible accounts of $6.6 million and $5.0 million, respectively. As of December 31, 2015, 2014 and 2013, we recorded bad debt expense in the amount of $2.0 million, $1.6 million and $1.6 million, respectively, related to tenant receivables that we specifically identified as potentially uncollectible based on our assessment of each tenant’s credit-worthiness.  Bad debt expenses and any related recoveries are included in property operation and maintenance expense.

Unamortized Lease Commissions and Loan Costs.  Leasing commissions are amortized using the straight-line method over the terms of the related lease agreements.  Loan costs are amortized on the straight-line method over the terms of the loans, which approximates the interest method.  Costs allocated to in-place leases whose terms differ from market terms related to acquired properties are amortized over the remaining life of the respective leases.

Prepaids and Other Assets.  Prepaids and other assets include escrows established pursuant to certain mortgage financing arrangements for real estate taxes and insurance and acquisition deposits which include earnest money deposits on future acquisitions. As part of the executive relocation arrangement discussed in Note 12, we issued a note receivable for $975,000 to the buyer, with an interest rate of 4.5% and a maturity of December 31, 2013. On December 5, 2013, the note was renewed through June 30, 2014 and bears interest at a rate of 5.2% during the renewal period. We are currently working with the buyer to renew the note receivable.

Federal Income Taxes.  We elected to be taxed as a REIT under the Code beginning with our taxable year ended December 31, 1999.  As a REIT, we generally are not subject to federal income tax on income that we distribute to our shareholders.  If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate rates.  We believe that we are organized and operate in such a manner as to qualify to be taxed as a REIT, and we intend to operate so as to remain qualified as a REIT for federal income tax purposes.

F- 12

WHITESTONE REIT AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2015

State Taxes.  We are subject to the Texas Margin Tax, which is computed by applying the applicable tax rate (1% for us) to the profit margin, which, generally, will be determined for us as total revenue less a 30% standard deduction.  Although the Texas Margin Tax is not considered an income tax, FASB ASC 740, “Income Taxes” (“ASC 740”)applies to the Texas Margin Tax.  As of December 31, 2015, 2014 and 2013, we recorded a margin tax provision of $0.4 million, $0.3 million and $0.3 million, respectively.

Fair Value of Financial Instruments.  Our financial instruments consist primarily of cash, cash equivalents, accounts receivable, accounts and notes payable and investments in marketable securities.  The carrying value of cash, cash equivalents, accounts receivable and accounts payable are representative of their respective fair values due to their short-term nature.  The fair value of our long-term debt, consisting of fixed rate secured notes, variable rate secured notes and an unsecured revolving credit facility aggregate to approximately $498.8 million and $394.9 million as compared to the book value of approximately $499.7 million and $394.1 million as of December 31, 2015 and 2014, respectively. The fair value of our long-term debt is estimated on a Level 2 basis (as provided by ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”)), using a discounted cash flow analysis based on the borrowing rates currently available to us for loans with similar terms and maturities, discounting the future contractual interest and principal payments.

Disclosure about fair value of financial instruments is based on pertinent information available to management as of December 31, 2015 and 2014. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since December 31, 2015 and current estimates of fair value may differ significantly from the amounts presented herein.

Derivative Instruments and Hedging Activities. We occasionally utilize derivative financial instruments, principally interest rate swaps, to manage our exposure to fluctuations in interest rates. We have established policies and procedures for risk assessment, and the approval, reporting and monitoring of derivative financial instruments. We recognize our interest rate swaps as cash flow hedges with the effective portion of the changes in fair value recorded in comprehensive income (loss) and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. Any ineffective portion of a cash flow hedges' change in fair value is recorded immediately into earnings. Our cash flow hedges are determined using Level 2 inputs under ASC 820. Level 2 inputs represent quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active; and model-derived valuations whose inputs are observable. As of December 31, 2015, we consider our cash flow hedges to be highly effective.

Concentration of Risk.  Substantially all of our revenues are obtained from office, warehouse and retail locations in the Austin, Chicago, Dallas-Fort Worth, Houston, Phoenix and San Antonio metropolitan areas. We maintain cash accounts in major U.S. financial institutions. The terms of these deposits are on demand to minimize risk. The balances of these accounts sometimes exceed the federally insured limits, although no losses have been incurred in connection with these deposits.

Recent accounting pronouncements. In April 2015, the FASB issued guidance requiring that debt issuance costs related to a recognized liability be presented on the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with the presentation of debt discounts. In August 2015, the FASB issued guidance to clarify that debt issuance costs related to line-of-credit agreements may still be presented as an asset and subsequently amortized ratably over the term of such arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2015 and is to be applied retrospectively. We expect this guidance to reduce total assets and total notes payable on our consolidated balance sheets for amounts classified as deferred financing costs specific to debt issuance costs. We do not expect this guidance to have any other effect on our consolidated financial statements.

F- 13

WHITESTONE REIT AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2015

3. MARKETABLE SECURITIES

All of our marketable securities were classified as available-for-sale securities as of December 31, 2015, 2014 and 2013. Available-for-sale securities consist of the following (in thousands):

	December 31, 2015
	Amortized Cost		Gains in Accumulated Other Comprehensive Income		Losses in Accumulated Other Comprehensive Income			Estimated Fair Value
Real estate sector common stock	$	654	$	—	$	(219	)	$	435
Total available-for-sale securities	$	654	$	—	$	(219	)	$	435

	December 31, 2014
	Amortized Cost		Gains in Accumulated Other Comprehensive Income		Losses in Accumulated Other Comprehensive Income			Estimated Fair Value
Real estate sector common stock	$	1,106	$	—	$	(133	)	$	973
Total available-for-sale securities	$	1,106	$	—	$	(133	)	$	973

During the years ended December 31, 2015 and 2013, available-for-sale securities were sold for total proceeds of $496,000 and $747,000, respectively. The gross realized gains and losses on these sales totaled $44,000 and $0, respectively, in 2015, and $44,000 and $3,000, respectively, in 2013. During the year ended December 31, 2014, no available-for-sale securities were sold. For the purpose of determining gross realized gains and losses, the cost of securities sold is based on specific identification. A net unrealized holding loss on available-for-sale securities in the amount of $219,000 and $133,000 for the years ended December 31, 2015 and 2014, respectively, has been included in accumulated other comprehensive income.

4.  REAL ESTATE

As of December 31, 2015, we owned 70 commercial properties in the Austin, Chicago, Dallas-Fort Worth, Houston, Phoenix and San Antonio areas comprised of approximately 6.0 million square feet of gross leasable area.

Property Acquisitions. On August 28, 2015, we acquired the hard corner at our Gilbert Tuscany Village property for approximately $1.7 million in cash and net prorations. The 14,603 square foot single-tenant property was vacant at the time of purchase and is located in Gilbert, Arizona. No revenue and a loss of $32,000 have been included in our results of operations for the year ended December 31, 2015 since the date of acquisition.

On August 26, 2015, we acquired two parcels of undeveloped land totaling 3.12 acres for 120,000 OP units. The OP units, are convertible on a one-for-one basis for Whitestone REIT common shares, subject to certain restrictions. The undeveloped land parcels are adjacent to our Keller Place property.

On August 26, 2015, we acquired Keller Place, a property that meets our Community Centered Property™ strategy, for approximately $12.0 million in cash and net prorations. The 93,541 square foot property was 92% leased at the time of purchase and is located in the Keller suburb of Fort Worth, Texas. Revenue and income of $471,000 and $237,000, respectively, have been included in our results of operations for the year ended December 31, 2015 since the date of acquisition.

On August 26, 2015, we acquired Quinlan Crossing, a property that meets our Community Centered Property™ strategy, for approximately $37.5 million in cash and net prorations. The 109,892 square foot property was 95% leased at the time of purchase and is located in Austin, Texas. Revenue and income of $1,283,000 and $555,000, respectively, have been included in our results of operations for the year ended December 31, 2015 since the date of acquisition.

F- 14

WHITESTONE REIT AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2015

On July 2, 2015, we acquired Parkside Village North, a property that meets our Community Centered Property™ strategy, for approximately $12.5 million in cash and net prorations. The 27,045 square foot property was 100% leased at the time of purchase and is located in Austin, Texas. Revenue and income of $596,000 and $289,000, respectively, have been included in our results of operations for the year ended December 31, 2015 since the date of acquisition.

On July 2, 2015, we acquired Parkside Village South, a property that meets our Community Centered Property™ strategy, for approximately $32.5 million in cash and net prorations. The 90,101 square foot property was 100% leased at the time of purchase and is located in Austin, Texas. Revenue and income of $1,738,000 and $844,000, respectively, have been included in our results of operations for the year ended December 31, 2015 since the date of acquisition.

On May 27, 2015, we acquired Davenport Village, a property that meets our Community Centered Property™ strategy, for approximately $45.5 million in cash and net prorations. The 128,934 square foot property was 85% leased at the time of purchase and is located in Austin, Texas. Revenue and income of $2,390,000 and $967,000, respectively, have been included in our results of operations for the year ended December 31, 2015 since the date of acquisition.

On March 31, 2015, we acquired City View Village, a property that meets our Community Centered Property™ strategy, for approximately $6.3 million in cash and net prorations. The 17,870 square foot property was 100% leased at the time of purchase and is located in San Antonio, Texas. Revenue and income of $612,000 and $273,000, respectively, have been included in our results of operations for the year ended December 31, 2015 since the date of acquisition.

On December 24, 2014, we acquired the hard corner at our Village Square at Dana Park property for approximately $4.7 million, in exchange for the assumption of a $2.6 million non-recourse loan and cash of $2.1 million. The 12,047 square foot property was 88% leased at the time of purchase and is located in the Mesa submarket of Phoenix, Arizona.

On December 24, 2014, we acquired The Shops at Williams Trace, a property that meets our Community Centered Property™ strategy, for approximately $20.2 million in cash and net prorations. The 132,991 square foot property was 87% leased at the time of purchase and is located in Sugar Land, Texas.

On December 24, 2014, we acquired Williams Trace Plaza, a property that meets our Community Centered Property™ strategy, for approximately $20.4 million in cash and net prorations. The 129,222 square foot property was 95% leased at the time of purchase and is located in Sugar Land, Texas.

On December 19, 2014, we acquired a 1.39 acre parcel of undeveloped land for $0.9 million in cash and net prorations. The undeveloped land parcel is adjacent to our Fulton Ranch Towne Center property.

On November 5, 2014, we acquired Fulton Ranch Towne Center, a property that meets our Community Centered Property™strategy, for approximately$29.3 millionin cash and net prorations. The113,281square foot property was86%leased at the time of purchase and is located in Chandler, Arizona.

On November 5, 2014, we acquired The Promenade at Fulton Ranch, a property that meets our Community Centered Property™strategy, for approximately$18.6 millionin cash and net prorations. The98,792square foot property was76%leased at the time of purchase and is located in Chandler, Arizona.

On September 19, 2014, we acquired The Strand at Huebner Oaks, a property that meets our Community Centered Property™ strategy, for approximately $18.0 million in cash and net prorations. The 73,920 square foot property was 90% leased at the time of purchase and is located in San Antonio, Texas.

On July 1, 2014, we acquired Heritage Trace Plaza, a property that meets our Community Centered Property™strategy, for approximately$20.1 millionin cash and net prorations. The70,431square foot property was98%leased at the time of purchase and is located in Fort Worth, Texas.

On December 5, 2013, we acquired Market Street at DC Ranch, a property that meets our Community Centered Property™ strategy, for approximately $37.4 million in cash and net prorations. The 241,280 square foot property was 80% leased at the time of purchase and is located in Scottsdale, Arizona.

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WHITESTONE REIT AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2015

On October 17, 2013, we acquired a 2.50 acre parcel for $2.8 million in cash and net prorations. The parcel is located in Spring, Texas, a suburb of Houston, and is contiguous to our Corporate Park Woodland property. At the time of purchase, the parcel had 16,220 square feet and was 63% leased.

On October 7, 2013, we acquired Fountain Hills Plaza, a property that meets our Community Centered Property™ strategy, 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 June 28, 2013, we acquired Anthem Marketplace, a property that meets our Community Centered Property™ strategy, for approximately $23.3 million in cash and net prorations. The 113,293 square foot property was 100% leased at the time of purchase and is located in Phoenix, Arizona. In the same purchase, we also acquired an adjacent development pad site of 0.83 acres.

On June 19, 2013, we acquired Mercado at Scottsdale Ranch, a property that meets our Community Centered Property™ strategy, for approximately $21.3 million, including the assumption of a $11.1 million non-recourse loan, a $0.9 million interest rate supplement and cash of $9.3 million. The 118,730 square foot property was 100% leased at the time of purchase and is located in Scottsdale, Arizona.

On March 28, 2013, we acquired Headquarters Village Shopping Center, a property that meets our Community Centered Property™ strategy, for approximately $25.7 million in cash and net prorations. The 89,134 square foot property was 100% leased at the time of purchase and is located in Plano, Texas.

Unaudited pro forma results of operations. The pro forma unaudited results summarized below reflect our consolidated pro forma results of operations as if our acquisitions for the years ended December 31, 2015, 2014 and 2013 were acquired on January 1, 2013 and includes no other material adjustments:

INCOME STATEMENT DATA	Year Ended December 31,
	2015		2014		2013
Operating revenue	$	100,860	$	97,353	$	96,333
Net income	$	8,773	$	15,005	$	14,517

Acquisition costs. Acquisition-related costs of $1.7 million, $1.3 million and $1.0 million are included in general and administrative expenses in our income statements for the years ended December 31, 2015, 2014 and 2013, respectively.

Property dispositions. On December 31, 2014, we completed the sale of three office buildings, Zeta, Royal Crest and Featherwood, located in the Clear Lake suburb of Houston, Texas, for $10.3 million. This disposition was pursuant to our strategy of recycling capital by disposing of non-core, primarily Legacy Properties that do not fit our Community Centered Property™ strategy. As part of the transaction, we provided short-term seller financing of $2.5 million. We recorded a gain on sale of $4.4 million, including recognizing a $1.9 million gain on sale for the year ended December 31, 2014 and deferring the remaining $2.5 million gain on sale to be recognized upon receipt of principal payments on the financing provided by us.

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WHITESTONE REIT AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2015

The operating results for properties classified as discontinued operations consists of the following (in thousands):

	Year Ended December 31,
	2015			2014		2013
Property revenues	$	51		$	1,626	$	1,653
Property expenses	41			734		832
Depreciation and amortization	—			314		329
Interest expense	—			58		175
Provision for income taxes	—			10		12
Loss (gain) on sale or disposal of assets	(1		)	—		7
Operating income from discontinued operations	11			510		298
Gain on sale of property from discontinued operations	—			1,887		—
Income from discontinued operations	$	11		$	2,397	$	298

Involuntary conversion. On August 29, 2015, we experienced a fire at our Corporate Park Northwest property, located in Houston, Texas. As a result, we recorded involuntary losses of $447,000 related to the disposal of 11,268 square feet of property and related improvements and $55,000 in demolition costs which were offset with $569,000 in insurance proceeds. The $67,000 gain on conversion is included as a reduction in our loss on sale or disposal of assets in the consolidated statements of operations and comprehensive income.

5.  ACCRUED RENTS AND ACCOUNTS RECEIVABLE, NET

Accrued rents and accounts receivable, net, consists of amounts accrued, billed and due from tenants, allowance for doubtful accounts and other receivables as follows (in thousands):

	December 31,
	2015			2014
Tenant receivables	$	10,494		$	7,998
Accrued rents and other recoveries	11,619			8,800
Allowance for doubtful accounts	(6,647		)	(4,964		)
Totals	$	15,466		$	11,834

6.  UNAMORTIZED LEASE COMMISSIONS AND LOAN COSTS

Costs which have been deferred consist of the following (in thousands):

	December 31,
	2015			2014
Leasing commissions	$	7,226		$	5,936
Deferred financing cost	6,490			5,785
Total cost	13,716			11,721
Less: leasing commissions accumulated amortization	(2,960		)	(2,373		)
Less: deferred financing cost accumulated amortization	(786		)	(469		)
Total cost, net of accumulated amortization	$	9,970		$	8,879

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WHITESTONE REIT AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2015

     A summary of expected future amortization of deferred costs is as follows (in thousands):

Years Ended December 31,	Leasing Commissions		Deferred Financing Costs		Total
2016	$	1,220	$	1,253	$	2,473
2017	1,001		1,239		2,240
2018	728		1,126		1,854
2019	524		612		1,136
2020	379		568		947
Thereafter	414		906		1,320
Total	$	4,266	$	5,704	$	9,970

7.  FUTURE MINIMUM LEASE INCOME

We lease the majority of our properties under noncancelable operating leases, which provide for minimum base rents plus, in some instances, contingent rents based upon a percentage of the tenants’ gross receipts. A summary of minimum future rents to be received (exclusive of renewals, tenant reimbursements, and contingent rents) under noncancelable operating leases in existence as of December 31, 2015 is as follows (in thousands): 

Years Ended December 31,	Minimum Future Rents
2016	$	71,537
2017	61,511
2018	48,913
2019	37,588
2020	27,078
Thereafter	88,948
Total	$	335,575

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WHITESTONE REIT AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2015

8.  DEBT

Mortgages and other notes payable consist of the following (in thousands):

	December 31,
Description	2015		2014
Fixed rate notes
$10.5 million, LIBOR plus 2.00% Note, due September 24, 2018 (1)	$	10,220	$	10,460
$50.0 million, 0.84% plus 1.35% to 1.90% Note, due October 30, 2020 (2)	50,000		50,000
$50.0 million, 1.50% plus 1.35% to 1.90% Note, due January 29, 2021 (3)	50,000		50,000
$100.0 million, 1.73% plus 1.65% to 2.25% Note, due October 30, 2022 (4)	100,000		—
$37.0 million 3.76% Note, due December 1, 2020	35,146		36,090
$6.5 million 3.80% Note, due January 1, 2019	6,190		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	20,040		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% Note, due December 29, 2017 (5)	7,886		7,888
$2.6 million 5.46% Note, due October 1, 2023	2,550		2,583
$11.1 million 5.87% Note, due August 6, 2016	11,305		11,607
Floating rate notes
Unsecured line of credit, LIBOR plus 1.40% to 1.95%, due October 30, 2019	127,600		120,100
	$	499,747	$	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 Term Loan 1 (as defined below) at 0.84% through February 3, 2017 and 1.75% beginning February 3, 2017 through October 30, 2020.

⁽³⁾  Promissory note includes an interest rate swap that fixed the LIBOR portion of Term Loan 2 (as defined below) at 1.50%.

⁽⁴⁾  Promissory note includes an interest rate swap that fixed the LIBOR portion of Term Loan 3 (as defined below) at 1.73%.

⁽⁵⁾  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%.

Our mortgage debt was collateralized by 20 operating properties as of December 31, 2015 with a combined net book value of $213.9 million and 20 operating properties as of December 31, 2014 with a combined net book value of $216.9 million.  Our loans contain restrictions that would require the payment of prepayment penalties for the acceleration of outstanding debt and are secured by deeds of trust on certain of our properties and the assignment of certain rents and leases associated with those properties. 

On December 24, 2014, we assumed a $2.6 million promissory note as part of our acquisition of the hard corner at Village Square at Dana Park (see Note 4). The 5.46% fixed interest rate note matures October 1, 2023.

On November 26, 2014, we, operating through our subsidiary, Whitestone Headquarters Village, LLC, a Delaware limited liability company, entered into a $19.0 million promissory note (the “Headquarters Note”), with a fixed interest rate of 4.15% payable to Morgan Stanley Bank, N.A. and a maturity date of December 1, 2024. Proceeds from the Headquarters Note were used to repay a portion of the Facility (as defined below).

F- 19

WHITESTONE REIT AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2015

On November 7, 2014, we, through our Operating Partnership, entered into an unsecured revolving credit facility (the “2014 Facility”) with the lenders party thereto, with BMO Capital Markets, Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and U.S. Bank, National Association, as co-lead arrangers and joint book runners, and Bank of Montreal, as administrative agent (the “Agent”). The 2014 Facility amended and restated our previous unsecured revolving credit facility. On October 30, 2015, we, through our Operating Partnership, entered into the First Amendment to the 2014 Facility (the “First Amendment”) with the guarantors party thereto, the lenders party thereto and the Agent . We refer to the 2014 Facility, as amended by the First Amendment, as the “Facility.”

Pursuant to the First Amendment, the Company made the following amendments to the 2014 Facility:

• extended the maturity date of the $300 million unsecured revolving credit facility under the 2014 Facility (the “Revolver”) to October 30, 2019 from November 7, 2018;

• converted $100 million of outstanding borrowings under the Revolver to a new $100 million unsecured term loan under the 2014 Facility (“Term Loan 3”) with a maturity date of October 30, 2022;

• extended the maturity date of the first $50 million unsecured term loan under the 2014 Facility (“Term Loan 1”) to October 30, 2020 from February 17, 2017; and

• extended the maturity date of the second $50 million unsecured term loan under the 2014 Facility (“Term Loan 2” and together with Term Loan 1 and Term Loan 3, the “Term Loans”) to January 29, 2021 from November 7, 2019.

Borrowings under the Facility accrue interest (at the Operating Partnership's option) at a Base Rate or an Adjusted LIBOR plus an applicable margin based upon our then existing leverage. The applicable margin for Adjusted LIBOR borrowings ranges from 1.40% to 1.95% for the Revolver and 1.35% to 2.25% for the Term Loans. Base Rate means the higher of: (a) the Agent's prime commercial rate, (b) the sum of (i) the average rate quoted by the Agent by two or more federal funds brokers selected by the Agent for sale to the Agent at face value of federal funds in the secondary market in an amount equal or comparable to the principal amount for which such rate is being determined, plus (ii) 1/2 of 1.00%, and (c) the LIBOR rate for such day plus 1.00%. Adjusted LIBOR means LIBOR divided by one minus the Eurodollar Reserve Percentage. The Eurodollar Reserve Percentage means the maximum reserve percentage at which reserves are imposed by the Board of Governors of the Federal Reserve System on eurocurrency liabilities.

We serve as the guarantor for funds borrowed by the Operating Partnership under the Facility. The Facility contains customary terms and conditions, including, without limitation, affirmative and negative covenants such as information reporting requirements, maximum secured indebtedness to total asset value, minimum EBITDA (earnings before interest, taxes, depreciation, amortization or extraordinary items) to fixed charges, and maintenance of a minimum net worth. The Facility also contains customary events of default with customary notice and cure, including, without limitation, nonpayment, breach of covenant, misrepresentation of representations and warranties in a material respect, cross-default to other major indebtedness, change of control, bankruptcy and loss of REIT tax status.

The Facility includes an accordion feature that will allow the Operating Partnership to increase the borrowing capacity to $700 million, upon the satisfaction of certain conditions. As of December 31, 2015, $327.6 million was drawn on the Facility and our unused borrowing capacity was $172.4 million, assuming that we use the proceeds of the Facility to acquire properties, or to repay debt on properties, that are eligible to be included in the unsecured borrowing base. Proceeds from the Facility were used for general corporate purposes, including property acquisitions, debt repayment, capital expenditures, the expansion, redevelopment and re-tenanting of properties in our portfolio and working capital. We intend to use the additional proceeds from the Facility for general corporate purposes, including property acquisitions, debt repayment, capital expenditure, the expansion, redevelopment and re-tenanting of properties in our portfolio and working capital.

On September 3, 2014, we, operating through our subsidiary, Whitestone Pecos Ranch, LLC, a Delaware limited liability company, entered into a $14.0 million promissory note (the “Pecos Note”), with a fixed interest rate of 4.34% payable to Wells Fargo Bank, National Association and a maturity date of September 11, 2024. Proceeds from the Pecos Note were used to repay a portion of the Facility.

F- 20

WHITESTONE REIT AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2015

On August 26, 2014, we, operating through our subsidiary, Whitestone Shops at Starwood, LLC, a Delaware limited liability company, entered into a $14.3 million promissory note (the “Starwood Note”), with a fixed interest rate of 4.34% payable to Wells Fargo Bank, National Association and a maturity date of September 11, 2024. Proceeds from the Starwood Note were used to repay a portion of the Facility.

On December 23, 2013, we, operating through our subsidiary, Whitestone Woodlake Plaza, LLC, a Delaware limited liability company, entered into a $6.5 million promissory note (the “Woodlake Note”), with a fixed interest rate of 3.80% payable to Western Reserve Life Assurance Company of Ohio and a maturity of January 1, 2019. Proceeds from the Woodlake Note were used to repay a portion of the Facility.

On December 16, 2013, we, operating through our subsidiary, Whitestone Anthem Marketplace, LLC, a Delaware limited liability company, entered into a $15.1 million promissory note (the “Anthem Note”), with a fixed interest rate of 4.99% payable to Citigroup Global Markets Realty Corporation and a maturity of January 6, 2024. Proceeds from the Anthem Note were used to repay a portion of the Facility.

On November 26, 2013, we, operating through our subsidiary, Whitestone Industrial-Office LLC, a Texas limited liability company (“Whitestone Industrial”), entered into a $37.0 million promissory note (the “Industrial Note”), with a fixed interest rate of 3.76% payable to Jackson Life National Insurance Company and a maturity of December 1, 2020. Proceeds from the Industrial Note were used to repay our existing $26.9 million floating rate loan that matured on December 1, 2013. The remainder of the proceeds were used to pay off approximately $10.1 million in fixed rate indebtedness maturing in 2014.

The Industrial Note is a non-recourse loan secured by Whitestone Industrial's nine properties, including Corporate Park Woodland, Holly Hall Industrial Park, Interstate 10 Warehouse, Main Park, Plaza Park, Westbelt Plaza, Westgate Service Center, Corporate Park West and Dairy Ashford.

On September 26, 2013, we, operating through our subsidiary, Whitestone Uptown Tower, LLC, a Delaware limited liability company (“Whitestone Uptown”), entered into a $16.5 million promissory note (the “Uptown Note”), with a fixed interest rate of 4.97% payable to Morgan Stanley Capital Holdings LLC and a maturity of September 26, 2023. Proceeds from the Uptown Note were used to repay a portion of the Facility.

On September 24, 2013, we, operating through our subsidiary, Whitestone Terravita Marketplace, LLC, a Delaware limited liability company (“Whitestone Terravita”), entered into a $10.5 million promissory note (the “Terravita Note”), with an applicable interest rate of LIBOR plus 2.00%, payable to Bank of America, N.A. and a maturity of September 24, 2018. Proceeds from the Terravita Note were used to repay a portion of the Facility.

The Terravita Note is a non-recourse loan secured by Whitestone Terravita's Terravita Marketplace property, located in Scottsdale, Arizona, and a limited guarantee by the Operating Partnership. In conjunction with the Terravita Note, a deed of trust was executed by Whitestone Terravita that contains customary terms and conditions, including representations, warranties and covenants by Whitestone Terravita that include, without limitation, assignment of rents, warranty of title, insurance requirements and maintenance, use and management of the property.

On June 19, 2013, we assumed a $11.1 million promissory note as part of our acquisition of Mercado at Scottsdale Ranch (see Note 4). The 5.87% fixed interest rate note matures on August 16, 2016. In conjunction with our acquisition, we received an interest rate supplement from the seller in the amount of $932,000, which we will accrete into expense over the life of the note. As a result of the supplement, the imputed interest rate is 3.052%, which we consider to be an appropriate market rate.

On May 31, 2013, we, operating through our subsidiary, Whitestone Pinnacle of Scottsdale, LLC, a Delaware limited liability company (“Whitestone Pinnacle”), refinanced our $14.1 million promissory note, with an applicable interest rate of 5.695% and a maturity of June 1, 2013, with a $20.2 million promissory note (the “Pinnacle Note”) payable to Cantor Commercial Real Estate Lending, L.P. with an applicable interest rate of 4.2805%, and a maturity of June 6, 2023.

F- 21

WHITESTONE REIT AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2015

The Pinnacle Note is a non-recourse loan secured by Whitestone Pinnacle's Pinnacle of Scottsdale property, located in Scottsdale, Arizona, and a limited guarantee by Whitestone. In conjunction with the Pinnacle Note, a deed of trust was executed by Whitestone Pinnacle that contains customary terms and conditions, including representations, warranties and covenants by Whitestone Pinnacle that include, without limitation, assignment of rents, warranty of title, insurance requirements and maintenance, use and management of the property.

The Pinnacle Note contains events of default that include, among other things, non-payment and default under the deed of trust. Upon occurrence of an event of default, the lender is entitled to accelerate all obligations of Whitestone Pinnacle. The lender will also be entitled to receive the entire unpaid balance and unpaid interest at a default rate.

Certain other of our loans are subject to customary covenants.  As of December 31, 2015, we were in compliance with all loan covenants.

Annual maturities of notes payable as of December 31, 2015 are due during the following years:

	Amount Due
Year	(in thousands)
2016	$	13,269
2017	10,213
2018	12,136
2019	135,649
2020	82,827
Thereafter	245,653
Total	$	499,747

Contractual Obligations

As of December 31, 2015, we had the following contractual obligations:

			Payment due by period (in thousands)
Contractual Obligations	Total		Less than 1 year (2016)		1 - 3 years (2017 - 2018)		3 - 5 years (2019 - 2020)		More than 5 years (after 2020)
Long-Term Debt - Principal	$	499,747	$	13,269	$	22,349	$	218,476	$	245,653
Long-Term Debt - Fixed Interest	80,589		13,030		24,753		23,002		19,804
Long-Term Debt - Variable Interest (1)	8,036		2,096		4,193		1,747		—
Unsecured credit facility - Unused commitment fee (2)	1,322		345		690		287		—
Operating Lease Obligations	186		74		88		21		3
Total	$	589,880	$	28,814	$	52,073	$	243,533	$	265,460

⁽¹⁾   As of December 31, 2015, we had one loan totaling $127.6 million which bore interest at a floating rate.  The variable interest rate payments are based on LIBOR plus 1.35% to LIBOR plus 1.95%, which reflects our new interest rates under the Facility.  The information in the table above reflects our projected interest rate obligations for the floating rate payments based on one-month LIBOR as of December 31, 2015, of 0.24%.

⁽²⁾  The unused commitment fees on the Facility, payable quarterly, are based on the average daily unused amount of the Facility. The fees are 0.20% for facility usage greater than 50% or 0.25% for facility usage less than 50%. The information in the table above reflects our projected obligations for the Facility based on our December 31, 2015 balance of $327.6 million.

F- 22

WHITESTONE REIT AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2015

9.  DERIVATIVES AND HEDGING ACTIVITIES

The fair value of our interest rate swaps is as follows (in thousands):

	Balance Sheet Location	Estimated Fair Value
Interest rate swaps:
December 31, 2015	Accounts payable and accrued expenses	$	617
December 31, 2014	Accounts payable and accrued expenses	$	1,016

On November 19, 2015, we, through our Operating Partnership, entered into an interest rate swap with Bank of Montreal that fixed the LIBOR portion of Term Loan 3 under the Facility at 1.73%. In the fourth quarter of 2015, pursuant to the terms of the agreement governing the interest rate swap, Bank of Montreal assigned $35.0 million of the swap to U.S. Bank, National Association, and $15.0 million of the swap to SunTrust Bank. See Note 8 for additional information regarding the Facility. The swap began on November 30, 2015 and will mature on October 28, 2022. We have designated the interest rate swap as a cash flow hedge with the effective portion of the changes in fair value to be recorded in comprehensive income (loss) and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. The ineffective portion of the change in fair value, if any, will be recognized directly in earnings.

On November 19, 2015, we, through our Operating Partnership, entered into an interest rate swap with Bank of Montreal that fixed the LIBOR portion of Term Loan 1 under the Facility at 1.75%. In the fourth quarter of 2015, pursuant to the terms of the agreement governing the interest rate swap, Bank of Montreal assigned $3.8 million of the swap to Regions Bank, $6.5 million of the swap to U.S. Bank, National Association, $14.0 million of the swap to Wells Fargo Bank, National Association, $14.0 million of the swap to Bank of America, N.A., and $5.0 million of the swap to SunTrust Bank. See Note 8 for additional information regarding the Facility. The swap will begin on February 3, 2017 and will mature on October 30, 2020. We have designated the interest rate swap as a cash flow hedge with the effective portion of the changes in fair value to be recorded in comprehensive income (loss) and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. The ineffective portion of the change in fair value, if any, will be recognized directly in earnings.

On November 19, 2015, we, through our Operating Partnership, entered into an interest rate swap with Bank of Montreal that fixed the LIBOR portion of Term Loan 2 under the Facility at 1.50%. In the fourth quarter of 2015, pursuant to the terms of the agreement governing the interest rate swap, Bank of Montreal assigned $3.8 million of the swap to Regions Bank, $6.5 million of the swap to U.S. Bank, National Association, $14.0 million of the swap to Wells Fargo Bank, National Association, $14.0 million of the swap to Bank of America, N.A., and $5.0 million of the swap to SunTrust Bank. See Note 8 for additional information regarding the Facility. The swap began on December 7, 2015 and will mature on January 29, 2021. We have designated the interest rate swap as a cash flow hedge with the effective portion of the changes in fair value to be recorded in comprehensive income (loss) and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. The ineffective portion of the change in fair value, if any, will be recognized directly in earnings.

On November 1, 2013, we, through our subsidiary, Whitestone Terravita, entered into an interest rate swap with Bank of America, N.A. that fixed the LIBOR portion of our Terravita Note at 1.55%. See Note 8 for additional information regarding the Terravita Note. The swap began on November 1, 2013 and will mature on September 24, 2018. We have designated the interest rate swap as a cash flow hedge with the effective portion of the changes in fair value to be recorded in comprehensive income (loss) and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. The ineffective portion of the change in fair value, if any, will be recognized directly in earnings.

On March 8, 2013, we, through our Operating Partnership, entered into an interest rate swap with U.S. Bank, National Association that fixed the LIBOR portion of Term Loan 1 under the Facility at 0.84%. See Note 8 for additional information regarding the Facility. The swap began on January 7, 2014 and will mature on February 3, 2017. We have designated the interest rate swap as a cash flow hedge with the effective portion of the changes in fair value to be recorded in comprehensive income (loss) and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. The ineffective portion of the change in fair value, if any, will be recognized directly in earnings.

F- 23

WHITESTONE REIT AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2015

A summary of our interest rate swap activity is as follows (in thousands):

	Amount Recognized as Comprehensive Income (Loss)			Location of Loss Recognized in Earnings	Amount of Loss Recognized in Earnings (1)
Year ended December 31, 2015	$	46		Interest expense	$	(991	)
Year ended December 31, 2014	$	(136	)	Interest expense	$	(838	)
Year ended December 31, 2013	$	173		Interest expense	$	(363	)

⁽¹⁾  Amounts represent the effective portions of our interest rate swaps. We did not recognize any ineffective portion of our interest rate swaps in earnings for the years ended December 31, 2015, 2014 and 2013.

10.  EARNINGS PER SHARE

Basic earnings per share for our common shareholders is calculated by dividing income from continuing operations excluding amounts attributable to unvested restricted shares and the net income attributable to non-controlling interests by our weighted-average common shares outstanding during the period.  Diluted earnings per share is computed by dividing the net income attributable to common shareholders excluding amounts attributable to unvested restricted shares and the net income attributable to non-controlling interests by the weighted-average number of common shares including any dilutive unvested restricted shares.

Certain of our performance-based restricted common shares are considered participating securities, which require the use of the two-class method for the computation of basic and diluted earnings per share.   During the years ended December 31, 2015, 2014 and 2013, 429,809, 471,310 and 595,782 OP units, respectively, were excluded from the calculation of diluted earnings per share because their effect would be anti-dilutive.

For the years ended December 31, 2015, 2014 and 2013, distributions of $564,000, $272,000 and $177,000, respectively, were made to the holders of certain restricted common shares, $36,000, $71,000 and $127,000 of which were charged against earnings, respectively.  See Note 14 for information related to restricted common shares under the 2008 Plan.

F- 24

WHITESTONE REIT AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2015

	Year Ended
	December 31,
(in thousands, except per share data)	2015			2014			2013
Numerator:
Income from continuing operations	$	6,854		$	5,349		$	3,621
Less: Net income attributable to noncontrolling interests	(116		)	(111		)	(115		)
Distributions paid on unvested restricted shares	(528		)	(201		)	(50		)
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	6,210			5,037			3,456
Income from discontinued operations	11			2,397			298
Less: Net income attributable to noncontrolling interests	—			(49		)	(10		)
Income from discontinued operations attributable to Whitestone REIT	11			2,348			288
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	6,221		$	7,385		$	3,744
Denominator:
Weighted average number of common shares - basic	24,631			22,278			18,027
Effect of dilutive securities:
Unvested restricted shares	1,052			515			246
Weighted average number of common shares - dilutive	25,683			22,793			18,273
Earnings Per Share:
Basic:
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	$	0.25		$	0.23		$	0.19
Income from discontinued operations attributable to Whitestone REIT	0.00			0.10			0.02
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	0.25		$	0.33		$	0.21
Diluted:
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	$	0.24		$	0.22		$	0.19
Income from discontinued operations attributable to Whitestone REIT	0.00			0.10			0.01
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	0.24		$	0.32		$	0.20

11.  FEDERAL INCOME TAXES

Federal income taxes are not provided because we intend to and believe we qualify as a REIT under the provisions of the Code and because we have distributed and intend to continue to distribute all of our taxable income to our shareholders.  Our shareholders include their proportionate taxable income in their individual tax returns.  As a REIT, we must distribute at least 90% of our real estate investment trust taxable income to our shareholders and meet certain income sources and investment restriction requirements.  In addition, REITs are subject to a number of organizational and operational requirements.  If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax (including any applicable alternative minimum tax) on our taxable income at regular corporate tax rates.

Taxable income differs from net income for financial reporting purposes principally due to differences in the timing of recognition of interest, real estate taxes, depreciation and rental revenue. 

F- 25

WHITESTONE REIT AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2015

For federal income tax purposes, the cash distributions to shareholders are characterized as follows for the years ended December 31: 

	2015		2014		2013
Ordinary income (unaudited)	60.9	%	53.3	%	38.5	%
Return of capital (unaudited)	37.7	%	21.3	%	61.3	%
Capital gain distributions (unaudited)	1.4	%	25.4	%	0.2	%
Total	100.0	%	100.0	%	100.0	%

12.  RELATED PARTY TRANSACTIONS

Executive Relocation. On July 9, 2010, upon the unanimous recommendation of our Compensation Committee, we entered into an arrangement with Mr. Mastandrea with respect to the disposition of his residence in Cleveland, Ohio. Mr. Mastandrea listed the residence in the second half of 2007 and has had to pay for security, taxes, insurance and maintenance expenses related to the residence. Under the relocation arrangement as amended on August 9, 2012, we agreed to pay Mr. Mastandrea the shortfall, if any, in the amount realized from the sale of the Cleveland residence, below $2,450,000, plus tax on the amount of such payment at the maximum federal income tax rate. The amount of the shortfall was to be paid in a combination of cash and common shares at the market value of the shares, as determined upon agreement between Mr. Mastandrea and the Compensation Committee.

In addition, the arrangement required us to continue paying the previously agreed upon cost of housing expenses for the Mastandrea family in Houston, Texas for a period of one year following the date of sale of the residence. We had previously agreed to reimburse Mr. Mastandrea for out-of-pocket moving costs including packing, temporary storage, transportation and moving supplies.

On December 21, 2012, Mr. Mastandrea sold the residence to a third party for a price of $1,125,000. Pursuant to the relocation arrangement, we paid cash of $1,325,000, representing the shortfall of the amount realized from the sale of the property, and $852,000, which represented moving expenses and closing costs incurred by Mr. Mastandrea and federal taxes. No common shares were issued. The total expense incurred by us of $2,177,000 is shown separately in our consolidated financial statements. In addition, we issued a note receivable for $975,000 to the buyer, with an interest rate of 4.5% and a maturity of December 31, 2013. On December 5, 2013, the note was renewed through June 30, 2014 and bears interest at a rate of 5.2% during the renewal period. We are currently working with the buyer to renew the note receivable. As a result of this transaction, we also recorded a related party receivable of $652,000, which represents the federal income tax withholding not deducted from our payment to Mr. Mastandrea. Subsequent to December 31, 2012, we received the $652,000 and paid it to the federal government on behalf of Mr. Mastandrea.

13.  EQUITY

Under our declaration of trust, as amended, we have authority to issue up to 400 million common shares of beneficial interest, $0.001 par value per share, and up to 50 million preferred shares of beneficial interest, $0.001 par value per share.

Equity Offerings

On June 26, 2015, we completed the sale of 3,750,000 common shares, $0.001 par value per share, at a purchase price of $13.3386 per share. Total net proceeds from the offering, after deducting offering expenses, were approximately $49.7 million, which were contributed to the Operating Partnership in exchange for OP units. The Operating Partnership used the net proceeds from this offering to repay a portion of the Facility and for general corporate purposes.

F- 26

WHITESTONE REIT AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2015

On October 8, 2013, we completed the sale of 4,000,000 common shares, $0.001 par value per share, and on October 28, 2013, upon the underwriters' exercise of the over-allotment option, we completed the sale of 600,000 additional common shares, at a price to the public of $13.54 per share. Total net proceeds from the offering, including the over-allotment shares, and after deducting the underwriting discount and offering expenses, were approximately $59.7 million, which we contributed to the Operating Partnership in exchange for OP units. The Operating Partnership used the net proceeds from this offering for general corporate purposes, which included acquisitions of additional properties, the repayment of outstanding indebtedness, capital expenditures (including tenant improvements), the expansion, redevelopment and/or re-tenanting of properties in our portfolio, working capital and other general purposes.

On June 19, 2013, we entered into five equity distribution agreements for an at-the-market distribution program.  On August 14, 2013, we entered into a sixth equity distribution agreement on substantially similar terms as the existing equity distribution agreements and amended the existing equity distribution agreements in order to add an additional placement agent (together, the “2013 equity distribution agreements”). Pursuant to the terms and conditions of the 2013 equity distribution agreements, we could issue and sell up to an aggregate of $50 million of our common shares. Actual sales depended on a variety of factors to be determined by us from time to time, including (among others) market conditions, the trading price of our common shares, capital needs and our determinations of the appropriate sources of funding for us, and were made in transactions that will be deemed to be “at-the-market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”). We had no obligation to sell any of our common shares, and could at any time suspend offers under the 2013 equity distribution agreements or terminate the 2013 equity distribution agreements. For the year ended December 31, 2015, we sold 456,090 common shares under the 2013 equity distribution agreements, with net proceeds to us of approximately $6.4 million. In connection with such sales, we paid compensation of $0.1 million to the sales agents. For the year ended December 31, 2014, we sold 282,239 common shares under the 2013 equity distribution agreements, with net proceeds to us of approximately $4.2 million. In connection with such sales, we paid compensation of $0.2 million to the sales agents.

On June 4, 2015, we entered into nine amended and restated equity distribution agreements (the “2015 equity distribution agreements”). Pursuant to the terms and conditions of the 2015 equity distribution agreements, we can issue and sell up to an aggregate of $50 million of our common shares. Actual sales will depend on a variety of factors to be determined by us from time to time, including (among others) market conditions, the trading price of our common shares, capital needs and our determinations of the appropriate sources of funding for us, and will be made in transactions that will be deemed to be “at-the-market” offerings as defined in Rule 415 under the Securities Act. We have no obligation to sell any of our common shares, and can at any time suspend offers under the 2015 equity distribution agreements or terminate the 2015 equity distribution agreements. We have not sold any common shares under the 2015 equity distribution agreements.

Operating Partnership Units

Substantially all of our business is conducted through the Operating Partnership.  We are the sole general partner of the Operating Partnership.  As of December 31, 2015, we owned a 98.2% interest in the Operating Partnership.

Limited partners in the Operating Partnership holding OP units have the right to redeem their OP units for cash or, at our option, common shares at a ratio of one OP unit for one common share.  Distributions to OP unit holders are paid at the same rate per unit as distributions per share to Whitestone common shares.  As of December 31, 2015 and 2014, there were 27,367,704 and 22,926,599 OP units outstanding, respectively.  We owned 26,870,671 and 22,528,207 OP units as of December 31, 2015 and 2014, respectively. The balance of the OP units is owned by third parties, including certain trustees.  Our weighted-average share ownership in the Operating Partnership was approximately 98.3%, 97.9% and 96.8% for the years ended December 31, 2015, 2014 and 2013, respectively. For the year ended December 31, 2015 and 2014, 21,359 and 163,700 OP units, respectively, were redeemed for an equal number of common shares.

F- 27

WHITESTONE REIT AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2015

Distributions

The following table reflects the total distributions we have paid (including the total amount paid and the amount paid per share) in each indicated quarter (in thousands, except per share data):

	Common Shares				Noncontrolling OP Unit Holders				Total
Quarter Paid	Distribution Per Common Share		Total Amount Paid		Distribution Per OP Unit		Total Amount Paid		Total Amount Paid
2015
Fourth Quarter	$	0.2850	$	7,666	$	0.2850	$	143	$	7,809
Third Quarter	0.2850		7,664		0.2850		122		7,786
Second Quarter	0.2850		6,601		0.2850		111		6,712
First Quarter	0.2850		6,526		0.2850		113		6,639
Total	$	1.1400	$	28,457	$	1.1400	$	489	$	28,946
2014
Fourth Quarter	$	0.2850	$	6,484	$	0.2850	$	114	$	6,598
Third Quarter	0.2850		6,457		0.2850		126		6,583
Second Quarter	0.2850		6,367		0.2850		152		6,519
First Quarter	0.2850		6,231		0.2850		158		6,389
Total	$	1.1400	$	25,539	$	1.1400	$	550	$	26,089

14.  INCENTIVE SHARE PLAN

On July 29, 2008, our shareholders approved the 2008 Long-Term Equity Incentive Ownership Plan (the “Plan”). On December 22, 2010, our board of trustees amended the Plan to allow for the issuance of common shares pursuant to the Plan. The Plan, as amended, provides that awards may be made with respect to common shares of Whitestone or OP units. The maximum aggregate number of common shares that may be issued under the Plan is increased upon each issuance of common shares by Whitestone so that at any time the maximum number of shares that may be issued under the Plan shall equal 12.5% of the aggregate number of common shares of Whitestone and OP units issued and outstanding (other than shares and/or units issued to or held by Whitestone).

The Compensation Committee of our board of trustees administers the Plan, except with respect to awards to non-employee trustees, for which the Plan is administered by our board of trustees.  The Compensation Committee is authorized to grant share options, including both incentive share options and non-qualified share options, as well as share appreciation rights, either with or without a related option. The Compensation Committee is also authorized to grant restricted common shares, restricted common share units, performance awards and other share-based awards. 

On April 2, 2014, the Compensation Committee approved the modification of the vesting provisions with respect to awards of an aggregate of 633,704 restricted common shares and restricted common share units for 51 of our employees. The modified time-based shares will vest annually in three equal installments. The modified performance-based restricted common shares and restricted common share units were modified to include performance-based vesting based on achievement of certain absolute financial goals, as well as one to two years of time-based vesting post achievement of financial goals. Continued employment is required through the applicable vesting date. Additionally, 2,049,116 restricted performance-based common share units were granted with the same vesting conditions as the modified performance-based grants described above. If the performance targets are not met prior to December 31, 2018, any unvested restricted common shares and restricted common units will be forfeited.

F- 28

WHITESTONE REIT AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2015

A summary of the share-based incentive plan activity as of and for the year ended December 31, 2015 is as follows:

	Shares		Weighted-Average Grant Date Fair Value (1)
Non-vested at January 1, 2015	2,411,068		$	14.45
Granted	327,122		13.49
Modified to new agreements	—		—
Modified from existing agreements	—		—
Vested	(348,786	)	14.25
Forfeited	(101,144	)	14.45
Non-vested at December 31, 2015	2,288,260		$	14.34
Available for grant at December 31, 2015	957,084

⁽¹⁾  The fair value of the shares granted were determined based on observable market transactions occurring near the date of the grants.

A summary of our nonvested and vested shares activity for the years ended December 31, 2015, 2014 and 2013 is presented below:

	Shares Granted			Shares Vested
Year Ended	Non-Vested Shares Issued	Weighted-Average Grant-Date Fair Value		Vested Shares		Total Vest-Date Fair Value
						(in thousands)
Year Ended December 31, 2015	327,122	$	13.49	(348,786	)	$	4,969
Year Ended December 31, 2014	2,058,930	$	14.40	(133,774	)	$	1,721
Year Ended December 31, 2013	328,005	$	15.43	(15,270	)	$	224

Total compensation recognized in earnings for share-based payments for the years ended December 31, 2015, 2014 and 2013 was $7.3 million, $4.7 million and $2.3 million, respectively.

Based on our current financial projections, we expect approximately 82% of the unvested awards to vest over the next 39 months. As of December 31, 2015, there was approximately $9.9 million in unrecognized compensation cost related to outstanding non-vested performance-based shares, which are expected to vest over a period of 39 months, and approximately $3.4 million in unrecognized compensation cost related to outstanding non-vested time-based shares, which are expected to be recognized over a period of approximately 15 months beginning on January 1, 2016.

We expect to record approximately $13.3 million in share-based compensation subsequent to the year ended December 31, 2015. The unrecognized share-based compensation cost is expected to vest over a weighted average period of 25 months. The dilutive impact of the performance-based shares will be included in the denominator of the earnings per share calculation beginning in the period that the performance conditions are expected to be met.

15. GRANTS TO TRUSTEES

On December 21, 2015, each of our four independent trustees and one trustee emeritus was granted 1,500 common shares, which vested immediately. The 7,500 common shares granted to our trustees had a grant date fair value of $12.10 per share. On December 21, 2015, one of our independent trustees elected to receive a total of 992 common shares with a grant date fair value of $12.10 in lieu of cash for board fees. The fair value of the shares granted during the year ended December 31, 2015 was determined using quoted prices available on the date of grant.

F- 29

On October 24, 2014, each of our four independent trustees and one trustee emeritus was granted 1,500 common shares, which vested immediately. The 7,500 common shares granted to our trustees had a grant date fair value of $14.53 per share. On December 9, 2014, two of our independent trustees elected to receive a total of 2,314 common shares with a grant date fair value of $14.69 in lieu of cash for board fees. The fair value of the shares granted were determined using quoted prices available on the date of grant.

16.  COMMITMENTS AND CONTINGENCIES

We are a participant in various legal proceedings and claims that arise in the ordinary course of our business.  These matters are generally covered by insurance.  While the resolution of these matters cannot be predicted with certainty, we believe that the final outcome of these matters will not have a material effect on our financial position, results of operations, or cash flows.

17.  SEGMENT INFORMATION

Our management historically has not differentiated by property types and therefore does not present segment information.

F- 30

WHITESTONE REIT AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2015

18.  SELECT QUARTERLY FINANCIAL DATA (unaudited)

The following is a summary of our unaudited quarterly financial information for the years ended December 31, 2015 and 2014 (in thousands, except per share data):

	First			Second			Third		Fourth
	Quarter			Quarter			Quarter		Quarter
2015
Revenues from continuing operations	$	21,252		$	21,970		$	24,599	$	25,595
Income from continuing operations	1,629			1,593			1,551		2,081
Income (loss) from discontinued operations	(8		)	(33		)	44		8
Net income attributable to Whitestone REIT	1,594			1,534			1,570		2,051
Basic Earnings per share:
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	$	0.07		$	0.06		$	0.05	$	0.07
Income from discontinued operations attributable to Whitestone REIT	0.00			0.00			0.00		0.00
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares (1)	$	0.07		$	0.06		$	0.05	$	0.07
Diluted Earnings per share:
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	$	0.06		$	0.06		$	0.05	$	0.07
Income from discontinued operations attributable to Whitestone REIT	0.00			0.00			0.00		0.00
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares (1)	$	0.06		$	0.06		$	0.05	$	0.07
2014
Revenues	$	17,376		$	17,261		$	18,540	$	19,205
Income from continuing operations	$	2,312		$	1,135		$	1,012	$	890
Income from discontinued operations	$	120		$	145		$	109	$	2,023
Net income attributable to Whitestone REIT	$	2,372		$	1,252		$	1,100	$	2,862
Basic Earnings per share:
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	$	0.10		$	0.05		$	0.04	$	0.04
Income from discontinued operations attributable to Whitestone REIT	0.01			0.00			0.01		0.08
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares (1)	$	0.11		$	0.05		$	0.05	$	0.12
Diluted Earnings per share:
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	$	0.10		$	0.05		$	0.04	$	0.03
Income from discontinued operations attributable to Whitestone REIT	0.01			0.00			0.01		0.09
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares (1)	$	0.11		$	0.05		$	0.05	$	0.12

⁽¹⁾   The sum of individual quarterly basic and diluted earnings per share amounts may not agree with the year-to-date basic and diluted earning per share amounts as the result of each period's computation being based on the weighted average number of common shares outstanding during that period.

F- 31

WHITESTONE REIT AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2015

19.  SUBSEQUENT EVENTS

On February 17, 2016, we completed the sale of approximately 0.5 acres of our 4.45 acre Pinnacle Phase II development parcel, located in Scottsdale, Arizona, for $1.1 million.

F- 32

Whitestone REIT and Subsidiaries

Schedule II - Valuation and Qualifying Accounts

December 31, 2015

	(in thousands)
	Balance at		Charged to		Deductions			Balance at
	Beginning		Costs and		from			End of
Description	of Year		Expense		Reserves			Year
Allowance for doubtful accounts:
Year ended December 31, 2015	$	4,964	$	1,974	$	(291	)	$	6,647
Year ended December 31, 2014	3,613		1,602		(251		)	4,964
Year ended December 31, 2013	2,226		1,638		(251		)	3,613

F- 33

Whitestone REIT and Subsidiaries

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2015

					Costs Capitalized Subsequent					Gross Amount at which Carried at
	Initial Cost (in thousands)				to Acquisition (in thousands)					End of Period(in thousands)(1) (2)
			Building and		Improvements			Carrying				Building and
Property Name	Land		Improvements		(net)			Costs		Land		Improvements		Total
Retail Communities:
Ahwatukee Plaza	$	5,126	$	4,086	$	322		$	—	$	5,126	$	4,408	$	9,534
Anthem Marketplace	4,790		17,973		160			—		4,790		18,133		22,923
Bellnott Square	1,154		4,638		411			—		1,154		5,049		6,203
Bissonnet Beltway	415		1,947		428			—		415		2,375		2,790
Centre South	481		1,596		590			—		481		2,186		2,667
The Citadel	472		1,777		2,595			—		472		4,372		4,844
City View Village	2,044		4,149		(12		)	—		2,044		4,137		6,181
Corporate Park Woodland II	2,758		—		5			—		2,758		5		2,763
Desert Canyon	1,976		1,704		629			—		1,976		2,333		4,309
Fountain Hills Plaza	5,113		15,340		64			—		5,113		15,404		20,517
Fountain Square	5,573		9,828		1,630			—		5,573		11,458		17,031
Fulton Ranch Towne Center	7,604		22,612		93			—		7,604		22,705		30,309
Gilbert Tuscany Village	1,767		3,233		1,441			—		1,767		4,674		6,441
Heritage Trace Plaza	6,209		13,821		30			—		6,209		13,851		20,060
Holly Knight	320		1,293		165			—		320		1,458		1,778
Headquarters Village	7,171		18,439		230			—		7,171		18,669		25,840
Keller Place	5,977		7,577		(79		)	—		5,977		7,498		13,475
Kempwood Plaza	733		1,798		764			—		733		2,562		3,295
Lion Square	1,546		4,289		3,202			—		1,546		7,491		9,037
The Marketplace at Central	1,305		5,324		1,067			—		1,305		6,391		7,696
Market Street at DC Ranch	9,710		26,779		1,687			—		9,710		28,466		38,176
Mercado at Scottsdale Ranch	8,728		12,560		495			—		8,728		13,055		21,783
Paradise Plaza	6,155		10,221		859			—		6,155		11,080		17,235
Parkside Village North	3,877		8,629		62			—		3,877		8,691		12,568
Parkside Village South	5,562		27,154		19			—		5,562		27,173		32,735
Pinnacle of Scottsdale	6,648		22,466		1,267			—		6,648		23,733		30,381
Providence	918		3,675		669			—		918		4,344		5,262
Quinlan Crossing	9,561		28,683		1			—		9,561		28,684		38,245
Shaver	184		633		(41		)	—		184		592		776
Shops at Pecos Ranch	3,781		15,123		560			—		3,781		15,683		19,464
Shops at Starwood	4,093		11,487		154			—		4,093		11,641		15,734
The Shops at Williams Trace	5,920		14,297		66			—		5,920		14,363		20,283
South Richey	778		2,584		1,929			—		778		4,513		5,291
Spoerlein Commons	2,340		7,296		530			—		2,340		7,826		10,166
The Strand at Huebner Oaks	5,805		12,335		82			—		5,805		12,417		18,222
SugarPark Plaza	1,781		7,125		512			—		1,781		7,637		9,418
Sunridge	276		1,186		331			—		276		1,517		1,793
Sunset at Pinnacle Peak	3,610		2,734		432			—		3,610		3,166		6,776
Terravita Marketplace	7,171		9,392		573			—		7,171		9,965		17,136
Torrey Square	1,981		2,971		1,208			—		1,981		4,179		6,160
Town Park	850		2,911		176			—		850		3,087		3,937
Village Square at Dana Park	10,877		40,252		2,306			—		10,877		42,558		53,435
Webster Pointe	720		1,150		197			—		720		1,347		2,067
Westchase	423		1,751		2,763			—		423		4,514		4,937
Williams Trace Plaza	6,800		14,003		30			—		6,800		14,033		20,833
Windsor Park	2,621		10,482		7,473			—		2,621		17,955		20,576
	$	173,704	$	439,303	$	38,075		$	—	$	173,704	$	477,378	$	651,082

F- 34

Whitestone REIT and Subsidiaries

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2015

					Costs Capitalized Subsequent				Gross Amount at which Carried at
	Initial Cost (in thousands)				to Acquisition (in thousands)				End of Period(in thousands)(1) (2)
			Building and		Improvements		Carrying				Building and
Property Name	Land		Improvements		(net)		Costs		Land		Improvements		Total
Office/Flex Communities:
Brookhill	$	186	$	788	$	375	$	—	$	186	$	1,163	$	1,349
Corporate Park Northwest	1,534		6,306		2,032		—		1,534		8,338		9,872
Corporate Park West	2,555		10,267		980		—		2,555		11,247		13,802
Corporate Park Woodland	652		5,330		653		—		652		5,983		6,635
Dairy Ashford	226		1,211		80		—		226		1,291		1,517
Holly Hall Industrial Park	608		2,516		396		—		608		2,912		3,520
Interstate 10 Warehouse	208		3,700		374		—		208		4,074		4,282
Main Park	1,328		2,721		580		—		1,328		3,301		4,629
Plaza Park	902		3,294		1,059		—		902		4,353		5,255
Westbelt Plaza	568		2,165		735		—		568		2,900		3,468
Westgate Service Center	672		2,776		693		—		672		3,469		4,141
	$	9,439	$	41,074	$	7,957	$	—	$	9,439	$	49,031	$	58,470
Office Communities:
9101 LBJ Freeway	$	1,597	$	6,078	$	1,300	$	—	$	1,597	$	7,378	$	8,975
Pima Norte	1,086		7,162		2,067		517		1,086		9,746		10,832
Uptown Tower	1,621		15,551		3,928		—		1,621		19,479		21,100
Woodlake Plaza	1,107		4,426		1,543		—		1,107		5,969		7,076
	$	5,411	$	33,217	$	8,838	$	517	$	5,411	$	42,572	$	47,983
Total Operating Portfolio	$	188,554	$	513,594	$	54,870	$	517	$	188,554	$	568,981	$	757,535
Davenport Village	$	11,367	$	34,101	$	20	$	—	$	11,367	$	34,121	$	45,488
Gilbert Tuscany Village Hard Corner	856		794		—		—		856		794		1,650
The Promenade at Fulton Ranch	5,198		13,367		124		—		5,198		13,491		18,689
Total - Development Portfolio (3)	$	17,421	$	48,262	$	144	$	—	$	17,421	$	48,406	$	65,827
Anthem Marketplace	$	204	$	—	$	—	$	—	$	204	$	—	$	204
Dana Park Development	4,000		—		7		—		4,000		7		4,007
Fountain Hills	277		—		—		—		277		—		277
Market Street at DC Ranch	704		—		—		—		704		—		704
Pinnacle Phase II	1,000		—		338		399		1,000		737		1,737
Shops at Starwood Phase III	1,818		—		3,034		395		1,818		3,429		5,247
Total - Property Held for Development	$	8,003	$	—	$	3,379	$	794	$	8,003	$	4,173	$	12,176
Grand Totals	$	213,978	$	561,856	$	58,393	$	1,311	$	213,978	$	621,560	$	835,538

F- 35

Whitestone REIT and Subsidiaries

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2015

		Accumulated Depreciation		Date of	Date	Depreciation
Property Name	Encumbrances	(in thousands)		Construction	Acquired	Life
Retail Communities:
Ahwatukee Plaza		$	549		8/16/2011	5-39 years
Anthem Marketplace	(4)	1,192			6/28/2013	5-39 years
Bellnott Square		1,817			1/1/2002	5-39 years
Bissonnet Beltway		1,572			1/1/1999	5-39 years
Centre South		1,071			1/1/2000	5-39 years
The Citadel		948			9/28/2010	5-39 years
City View Village		80			3/31/2015	5-39 years
Corporate Park Woodland II		5			10/17/2013	5-39 years
Desert Canyon		385			4/13/2011	5-39 years
Fountain Hills Plaza		889			10/7/2013	5-39 years
Fountain Square		1,001			9/21/2012	5-39 years
Fulton Ranch Towne Center		676			11/5/2014	5-39 years
Gilbert Tuscany Village		892			6/28/2011	5-39 years
Heritage Trace Plaza		539			7/1/2014	5-39 years
Holly Knight		974			8/1/2000	5-39 years
Headquarters Village	(5)	1,353			3/28/2013	5-39 years
Keller Place		66			8/26/2015	5-39 years
Kempwood Plaza		1,201			2/2/1999	5-39 years
Lion Square		3,186			1/1/2000	5-39 years
The Marketplace at Central		911			11/1/2010	5-39 years
Market Street at DC Ranch		1,670			12/5/2013	5-39 years
Mercado at Scottsdale Ranch	(6)	871			6/19/2013	5-39 years
Paradise Plaza	(7)	995			8/8/2012	5-39 years
Parkside Village North		111			7/2/2015	5-39 years
Parkside Village South		348			7/2/2015	5-39 years
Pinnacle of Scottsdale	(8)	2,559			12/22/2011	5-39 years
Providence		1,839			3/30/2001	5-39 years
Quinlan Crossing		245			8/26/2015	5-39 years
Shaver		295			12/17/1999	5-39 years
Shops at Pecos Ranch	(9)	1,256			12/28/2012	5-39 years
Shops at Starwood	(10)	1,237			12/28/2011	5-39 years
The Shops at Williams Trace		367			12/24/2014	5-39 years
South Richey		1,803			8/25/1999	5-39 years
Spoerlein Commons		1,503			1/16/2009	5-39 years
The Strand at Huebner Oaks		397			9/19/2014	5-39 years
SugarPark Plaza		2,284			9/8/2004	5-39 years
Sunridge		622			1/1/2002	5-39 years
Sunset at Pinnacle Peak		312			5/29/2012	5-39 years
Terravita Marketplace	(11)	1,212			8/8/2011	5-39 years
Torrey Square		2,048			1/1/2000	5-39 years
Town Park		1,704			1/1/1999	5-39 years
Village Square at Dana Park	(12)	3,535			9/21/2012	5-39 years
Webster Pointe		686			1/1/2000	5-39 years
Westchase		1,529			1/1/2002	5-39 years
Williams Trace Plaza		359			12/24/2014	5-39 years
Windsor Park		5,789			12/16/2003	5-39 years
		$	54,883

F- 36

Whitestone REIT and Subsidiaries

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2015

		Accumulated Depreciation		Date of	Date	Depreciation
Property Name	Encumbrances	(in thousands)		Construction	Acquired	Life
Office/Flex Communities:
Brookhill		$	454		1/1/2002	5-39 years
Corporate Park Northwest		2,907			1/1/2002	5-39 years
Corporate Park West	(13)	4,358			1/1/2002	5-39 years
Corporate Park Woodland	(13)	3,008		11/1/2000		5-39 years
Dairy Ashford	(13)	647			1/1/1999	5-39 years
Holly Hall Industrial Park	(13)	1,151			1/1/2002	5-39 years
Interstate 10 Warehouse	(13)	2,581			1/1/1999	5-39 years
Main Park	(13)	1,583			1/1/1999	5-39 years
Plaza Park	(13)	2,192			1/1/2000	5-39 years
Westbelt Plaza	(13)	1,678			1/1/1999	5-39 years
Westgate Service Center	(13)	1,386			1/1/2002	5-39 years
		$	21,945
Office Communities:
9101 LBJ Freeway		$	2,205		8/10/2005	5-39 years
Pima Norte		1,842			10/4/2007	5-39 years
Uptown Tower	(14)	6,007			11/22/2005	5-39 years
Woodlake Plaza	(15)	1,776			3/14/2005	5-39 years
		$	11,830
Total Operating Portfolio		$	88,658
Davenport Village		$	510		5/27/2015	5-39 years
Gilbert Tuscany Village Hard Corner		10			8/28/2015	5-39 years
The Promenade at Fulton Ranch		402			11/5/2014	5-39 years
Total - Development Portfolio (3)		$	922
Anthem Marketplace		$	—		6/28/2013	Land - Not Depreciated
Dana Park Development		—			9/21/2012	Land - Not Depreciated
Fountain Hills		—			10/7/2013	Land - Not Depreciated
Market Street at DC Ranch		—			12/5/2013	Land - Not Depreciated
Pinnacle Phase II		—			12/28/2011	Land - Not Depreciated
Shops at Starwood Phase III		—			12/28/2011	Land - Not Depreciated
Total - Property Held For Development		$	—
Grand Total		$	89,580

F- 37

Whitestone REIT and Subsidiaries

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2015

⁽¹⁾ Reconciliations of total real estate carrying value for the three years ended December 31, follows:

	( in thousands)
	2015			2014			2013
Balance at beginning of period	$	673,655		$	537,872		$	401,325
Additions during the period:
Acquisitions	150,331			132,734			130,731
Improvements	12,653			9,330			6,164
	162,984			142,064			136,895
Deductions - cost of real estate sold or retired	(1,101		)	(6,281		)	(348		)
Balance at close of period	$	835,538		$	673,655		$	537,872

⁽²⁾  The aggregate cost of real estate (in thousands) for federal income tax purposes is $807,349.

⁽³⁾  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.

⁽⁴⁾  This property secures a $15.1 million mortgage note.

⁽⁵⁾  This property secures a $19.0 million mortgage note.

⁽⁶⁾  This property secures a $11.1 million mortgage note.

⁽⁷⁾  This property secures a $9.2 million mortgage note.

⁽⁸⁾  This property secures a $14.1 million mortgage note.

⁽⁹⁾  This property secures a $14.0 million mortgage note.

⁽¹⁰⁾  This property secures a $14.3 million mortgage note.

⁽¹¹⁾  This property secures a $10.5 million mortgage note.

⁽¹²⁾  This property secures a $2.6 million mortgage note.

⁽¹³⁾  These properties secure a $37.0 million mortgage note.

⁽¹⁴⁾  This property secures a $16.5 million mortgage note.

⁽¹⁵⁾  This property secures a $6.5 million mortgage note.

F- 38

Whitestone REIT and Subsidiaries

Index to Exhibits

Exhibit No. Description

3.1.1 Articles of Amendment and Restatement of Whitestone REIT (previously filed as and incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed on July 31, 2008)

3.1.2 Articles Supplementary (previously filed as and incorporated by reference to Exhibit 3(i).1 to the Registrant’s Current Report on Form 8-K, filed December 6, 2006)

3.1.3 Articles of Amendment (previously filed and incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K, filed on August 24, 2010)

3.1.4 Articles of Amendment (previously filed and incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K, filed on August 24, 2010)

3.1.5 Articles Supplementary (previously filed and incorporated by reference to Exhibit 3.3 to the Registrant’s Current Report on Form 8-K, filed on August 24, 2010)

3.1.6 Articles of Amendment (previously filed as and incorporated by reference to Exhibit 3.1.1 to the Registrant's Current Report on Form 8-K, filed June 27, 2012)

3.1.7 Articles of Amendment (previously filed as and incorporated by reference to Exhibit 3.1.2 to the Registrant's Current Report on Form 8-K, filed June 27, 2012)

3.2 Amended and Restated Bylaws of Whitestone REIT (previously filed as and incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed October 9, 2008)

10.1 Agreement of Limited Partnership of Whitestone REIT Operating Partnership, L.P. (previously filed as and incorporated by reference to Exhibit 10.1 to the Registrant’s General Form for Registration of Securities on Form 10, filed on April 30, 2003)

10.2 Certificate of Formation of Whitestone REIT Operating Partnership II GP, LLC (previously filed as and incorporated by reference to Exhibit 10.3 to the Registrant’s General Form for Registration of Securities on Form 10, filed on April 30, 2003)

10.3 Limited Liability Company Agreement of Whitestone REIT Operating Partnership II GP, LLC (previously filed as and incorporated by reference to Exhibit 10.4 to the Registrant’s General Form for Registration of Securities on Form 10, filed on April 30, 2003)

10.4 Agreement of Limited Partnership of Whitestone REIT Operating Partnership II, L.P. (previously filed as and incorporated by reference to Exhibit 10.6 to the Registrant’s General Form for Registration of Securities on Form 10, filed on April 30, 2003)

10.5 Amendment to the Agreement of Limited Partnership of Whitestone REIT Operating Partnership, L.P. (previously filed in and incorporated by reference to Exhibit 10.1 to the Registrant’s Registration Statement on Form S-11, Commission File No. 333-111674, filed on December 31, 2003)

10.6 Promissory Note between HCP REIT Operating Company IV LLC and MidFirst Bank, dated March 1, 2007 (previously filed and incorporated by reference to Exhibit 10.25 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2006, filed on March 30, 2007)

10.7 Term Loan Agreement among Whitestone REIT Operating Partnership, L.P., Whitestone Pima Norte LLC, Whitestone REIT Operating Partnership III LP, Hartman REIT Operating Partnership III LP LTD, Whitestone REIT Operating Partnership III GP LLC and KeyBank National Association, dated January 25, 2008 (previously filed as and incorporated by reference to Exhibit 10.29 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2007, filed on March 31, 2008)

Exhibit No. Description

10.8+ Whitestone REIT 2008 Long-Term Equity Incentive Ownership Plan (previously filed and incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed July 31, 2008)

10.9 Promissory Note among Whitestone Corporate Park West, LLC and MidFirst Bank dated August 5, 2008 (previously filed and incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K, filed August 8, 2008)

10.10 Promissory Note among Whitestone Centers LLC and Sun Life Assurance Company of Canada dated October 1, 2008 (previously filed and incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K, filed October 7, 2008)

10.11 Promissory Note among Whitestone Centers LLC and Sun Life Assurance Company of Canada dated October 1, 2008 (previously filed and incorporated by reference to Exhibit 99.2 to the Registrant’s Current Report on Form 8-K, filed October 7, 2008)

10.12 Promissory Note among Whitestone Centers LLC and Sun Life Assurance Company of Canada dated October 1, 2008 (previously filed and incorporated by reference to Exhibit 99.3 to the Registrant’s Current Report on Form 8-K, filed October 7, 2008)

10.13 Promissory Note among Whitestone Centers LLC and Sun Life Assurance Company of Canada dated October 1, 2008 (previously filed and incorporated by reference to Exhibit 99.4 to the Registrant’s Current Report on Form 8-K, filed October 7, 2008)

10.14 Promissory Note among Whitestone Centers LLC and Sun Life Assurance Company of Canada dated October 1, 2008 (previously filed and incorporated by reference to Exhibit 99.5 to the Registrant’s Current Report on Form 8-K, filed October 7, 2008)

10.15 Note among Whitestone Offices LLC and Nationwide Life Insurance Company dated October 1, 2008 (previously filed and incorporated by reference to Exhibit 99.6 to the Registrant’s Current Report on Form 8-K, filed October 7, 2008)

10.16 Floating Rate Promissory Note among Whitestone Industrial-Office LLC and Jackson National Life Insurance Company dated October 3, 2008 (previously filed and incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed October 9, 2008)

10.17+ Form of Restricted Common Share Award Agreement (Performance Vested) (previously filed and incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed January 7, 2009)

10.18+ Form of Restricted Common Share Award Agreement (Time Vested) (previously filed and incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed January 7, 2009)

10.19+ Form of Restricted Unit Award Agreement (previously filed and incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K, filed January 7, 2009)

10.20 Promissory Note among Whitestone Centers LLC and Sun Life Assurance Company of Canada dated February 3, 2009 (previously filed and incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed February 10, 2009)

10.21 Promissory Note among Whitestone Centers LLC and Sun Life Assurance Company of Canada dated February 3, 2009 (previously filed and incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed February 10, 2009)

10.22 Promissory Note among Whitestone Centers LLC and Sun Life Assurance Company of Canada dated February 3, 2009 (previously filed and incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K, filed February 10, 2009)

Exhibit No. Description

10.23 Promissory Note among Whitestone Centers LLC and Sun Life Assurance Company of Canada dated February 3, 2009 (previously filed and incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K, filed February 10, 2009)

10.24 Agreement of Purchase and Sale between Whitestone REIT Operating Partnership, L.P. and Bank One, Chicago, NA, as trustee for Midwest Development Venture IV dated December 18, 2008 (previously filed and incorporated by reference to Exhibit 10.8 to Registrant’s Quarterly Report on Form 10-Q, filed on May 15, 2009)

10.25+ Trustee Restricted Common Share Grant Agreement (Time Vested) between Whitestone REIT and Daryl J. Carter (previously filed and incorporated by reference to Exhibit 10.9 to Registrant’s Quarterly Report on Form 10-Q, filed on May 15, 2009)

10.26+ Trustee Restricted Common Share Grant Agreement (Time Vested) between Whitestone REIT and Daniel G. DeVos (previously filed and incorporated by reference to Exhibit 10.10 to Registrant’s Quarterly Report on Form 10-Q, filed on May 15, 2009)

10.27+ Trustee Restricted Common Share Grant Agreement (Time Vested) between Whitestone REIT and Donald F. Keating (previously filed and incorporated by reference to Exhibit 10.11 to Registrant’s Quarterly Report on Form 10-Q, filed on May 15, 2009)

10.28+  Trustee Restricted Common Share Grant Agreement (Time Vested) between Whitestone REIT and Jack L. Mahaffey (previously filed and incorporated by reference to Exhibit 10.12 toRegistrant’s Quarterly Report on Form 10-Q, filed on May 15, 2009)

10.29 Promissory Note dated September 10, 2010 between Whitestone REIT Operating Company IV LLC and MidFirst Bank (previously filed and incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K, filed September 16, 2010)

10.30 Modification of Promissory Note dated September 10, 2010 between Whitestone REIT Operating Company IV LLC and MidFirst Bank (previously filed and incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K, filed September 16, 2010)

10.31 Limited Guarantee dated September 10, 2010 between Whitestone REIT Operating Company IV LLC and MidFirst Bank (previously filed and incorporated by reference to Exhibit 10.3 to the Registrant's Current Report on Form 8-K, filed September 16, 2010)

10.32 Promissory Note between Whitestone Featherwood LLC and Viewpoint Bank dated March 31, 2011 (previously filed and incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K, filed April 5, 2011)

10.33 Assumption Agreement among U.S. National Bank Association, Scottsdale Pinnacle LP, Howard Bankchik, Steven J. Fogel, Whitestone Pinnacle of Scottsdale, LLC and Whitestone REIT Operating Partnership, LP and Whitestone REIT, dated December 22, 2011 (previously filed and incorporated by reference to Exhibit 10.35 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2011, filed on February 29, 2012)

10.34+ First Amendment to the Whitestone REIT 2008 Long-Term Equity Incentive Ownership Plan (previously filed and incorporated by reference to Exhibit 10.33 to the Registrant's Annual Report on Form 10-K, filed on March 1, 2011)

Exhibit No. Description

10.35+ Separation Agreement between Whitestone REIT and Valarie King (previously filed and incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q, filed August 9, 2012)

10.36+ Summary of Relocation Agreement between Whitestone REIT and James C. Mastandrea (previously filed and incorporated by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q, filed August 9, 2012)

10.37+ Separation Agreement between Whitestone REIT and Richard Rollnick (previously filed and incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q, filed November 6, 2013)

10.38 Loan Agreement, dated November 26, 2013, by and between Whitestone Industrial-Office LLC and Jackson National Life Insurance Company (previously filed and incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K, filed December 3, 2013)

10.39 Fixed Rate Promissory Note by Whitestone Industrial-Office LLC to Jackson Life National Insurance Company, dated November 26, 2013 (previously filed and incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K, filed December 3, 2013)

10.40+ Employment Agreement between Whitestone REIT and James C. Mastandrea (previously filed and incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K, filed August 29, 2014)

10.41+ Employment Agreement between Whitestone REIT and David K. Holeman (previously filed and incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K, filed August 29, 2014)

10.42+ Change in Control Agreement between Whitestone REIT and John J. Dee (previously filed and incorporated by reference to Exhibit 10.3 to the Registrant's Current Report on Form 8-K, filed August 29, 2014)

10.43+ Change in Control Agreement between Whitestone REIT and Bradford D. Johnson (previously filed and incorporated by reference to Exhibit 10.5 to the Registrant's Current Report on Form 8-K, filed August 29, 2014)

10.44 Amended and Restated Credit Agreement between Whitestone REIT Operating Partnership, L.P. and Bank of Montreal dated November 7, 2014 (previously filed and incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K, filed November 12, 2014)

10.45+ Change in Control Agreement between Whitestone REIT and Christine J. Mastandrea (previously filed and incorporated by reference to Exhibit 10.45 to the Registrant's Quarterly Report on Form 10-Q, filed March 2, 2015)

10.46 Form of Restricted Unit Award Agreement (Time Vested) (previously filed and incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q, filed on August 7, 2015)

10.47 Amended and Restated Equity Distribution Agreement, dated June 4, 2015, by and among Whitestone REIT, Whitestone REIT Operating Partnership, L.P., and Wells Fargo Securities, LLC (previously filed and incorporated by reference to Exhibit 1.1 to the Registrant’s Current Report on Form 8-K, filed on June 4, 2015)

10.48 Amended and Restated Equity Distribution Agreement, dated June 4, 2015, by and among Whitestone REIT, Whitestone REIT Operating Partnership, L.P., and JMP Securities LLC (previously filed and incorporated by reference to Exhibit 1.2 to the Registrant’s Current Report on Form 8-K, filed on June 4, 2015)

10.49 Amended and Restated Equity Distribution Agreement, dated June 4, 2015, by and among Whitestone REIT, Whitestone REIT Operating Partnership, L.P., and BMO Capital Markets Corp. (previously filed and incorporated by reference to Exhibit 1.3 to the Registrant’s Current Report on Form 8-K, filed on June 4, 2015)

10.50 Amended and Restated Equity Distribution Agreement, dated June 4, 2015, by and among Whitestone REIT, Whitestone REIT Operating Partnership, L.P., and Wunderlich Securities, Inc. (previously filed as and incorporated by reference to Exhibit 1.4 to the Registrant’s Current Report on Form 8-K, filed on June 4, 2015)

10.51 Amended and Restated Equity Distribution Agreement, dated June 4, 2015, by and among Whitestone REIT, Whitestone REIT Operating Partnership, L.P., and Ladenburg Thalmann (previously filed and incorporated by reference to Exhibit 1.5 to the Registrant’s Current Report on Form 8-K, filed on June 4, 2015)

10.52 Amended and Restated Equity Distribution Agreement, dated June 4, 2015, by and among Whitestone REIT, Whitestone REIT Operating Partnership, L.P., and Robert W. Baird & Co. Incorporated (previously filed and incorporated by reference to Exhibit 1.6 to the Registrant’s Current Report on Form 8-K, filed on June 4, 2015)

10.53 First Amendment to Amended and Restated Credit Agreement between Whitestone REIT Operating Partnership, L.P. and Bank of Montreal dated October 30, 2015 (previously filed and incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K, filed November 5, 2015)

12.1* Statement of Calculation of Consolidated Ratio of Earnings to Fixed Charges

21.1* List of subsidiaries of Whitestone REIT

23.1* Consent of Pannell Kerr Forster of Texas, P.C.

24.1 Power of Attorney (included on the signature page hereto)

31.1* Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2* Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1** Certificate of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2** Certificate of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS***	XBRL Instance Document
101. SCH***	XBRL Taxonomy Extension Schema Document
101.CAL***	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB***	XBRL Taxonomy Extension Label Linkbase Document
101.PRE***	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF***	XBRL Taxonomy Extension Definition Linkbase Document

________________________

*    Filed herewith.

**    Furnished herewith.

***    Attached as Exhibit 101 to this Annual Report on Form 10-K are the following materials, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets as of December 31, 2015 and 2014, (ii) the Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2015, 2014 and 2013, (iii) the Consolidated Statements of Changes in Equity for the years ended December 31, 2015, 2014 and 2013, (iv) the Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013 and (v) the Notes to Consolidated Financial Statements.

Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

+   Denotes management contract or compensatory plan or arrangement.

EX-12.1

Exhibit 12.1

Whitestone REIT

Calculation of Consolidated Ratio of Earnings to Fixed Charges

(dollars in thousands)

	Year Ended December 31,
	2015		2014		2013		2012			2011
Earnings
Income (loss) from continuing operations	$	6,854	$	5,349	$	3,621	$	(165	)	$	496
Plus: Taxes	372		282		293		275			214
Plus: Fixed charges	15,122		10,672		10,089		9,084			6,224
Total earnings	$	22,348	$	16,303	$	14,003	$	9,194		$	6,934
Fixed charges
Interest expense	$	13,804	$	9,680	$	8,929	$	7,482		$	5,608
Plus: Capitalized Interest	106		93		114		176			—
Plus: Amortization of deferred financing costs	1,212		899		1,046		1,426			616
Total fixed charges	$	15,122	$	10,672	$	10,089	$	9,084		$	6,224
Ratio of earnings to fixed charges	1.48		1.53		1.39		1.01			1.11

EX-21.1

Exhibit 21.1

NAME OF SUBSIDIARY	JURISDICTION OF FORMATION
Whitestone REIT Operating Partnership, LP	Delaware
Whitestone Centers LLC	Texas
Whitestone Industrial-Office LLC	Texas
Whitestone REIT Operating Partnership III GP, LLC	Texas
Whitestone REIT Operating Partnership III LP, LTD	Texas
Whitestone REIT Operating Partnership III LP	Texas
Whitestone REIT Operating Company IV, LLC	Texas
Whitestone Pima Norte LLC	Texas
Whitestone Corporate Park West LLC	Texas
Whitestone Offices LLC	Texas
Whitestone Retail Services, L.L.C.	Delaware
Whitestone Brokerage Services, L.L.C.	Texas
Whitestone SunnySlope Village, L.L.C.	Delaware
Whitestone Featherwood, LLC	Texas
Whitestone Terravita Marketplace, LLC	Delaware
Whitestone Ahwatukee Plaza, LLC	Delaware
Whitestone Brokerage Services AZ, LLC	Arizona
Whitestone Pinnacle of Scottsdale, LLC	Delaware
Whitestone Pinnacle of Scottsdale - Phase II, LLC	Delaware
Whitestone Shops At Starwood, LLC	Delaware
Whitestone Shops At Starwood - Phase III, LLC	Delaware
Whitestone Shops at Pinnacle, LLC	Delaware
Whitestone Paradise Village, LLC	Delaware
Whitestone Fountain Square, LLC	Delaware
Whitestone Village Square at Dana Park, LLC	Delaware
Whitestone Village Square at Dana Park Development Land, LLC	Delaware
Whitestone Pecos Ranch, LLC	Delaware
Whitestone Headquarters Village, LLC	Delaware
Whitestone TRS, Inc.	Delaware
Whitestone Mercado, LLC	Delaware
Whitestone Realty, LLC	Arizona
Whitestone Anthem Marketplace, LLC	Delaware
Whitestone Uptown Tower, LLC	Delaware
Whitestone Anthem Marketplace Development Land, LLC	Delaware
Whitestone Fountain Hills, LLC	Delaware
Whitestone CP Woodland Ph. 2, LLC	Delaware
Whitestone Woodlake Plaza, LLC	Delaware
Whitestone Market Street at DC Ranch, LLC	Delaware
Whitestone Heritage Trace Plaza 1, LLC	Delaware
Whitestone Heritage Trace Plaza 2, LLC	Delaware
Whitestone Strand, LLC	Delaware
Whitestone Promenade, LLC	Delaware
Whitestone Towne Center, LLC	Delaware
Whitestone Williams Trace Plaza, LLC	Delaware
Whitestone Williams Trace Shops, LLC	Delaware
Whitestone Clear Lake Offices, LLC	Delaware
Whitestone Village Square at Dana Park Corner, LLC	Delaware
Whitestone City View, LLC	Delaware
Whitestone Davenport TRS, LLC	Delaware
Whitestone Davenport Village, LLC	Delaware
Whitestone Parkside Village South, LLC	Delaware
Whitestone Parkside Village North, LLC	Delaware
Whitestone Quinlan Crossing, LLC	Delaware
Whitestone Keller Place, LLC	Delaware
Whitestone Gilbert Tuscany Village Corner, LLC	Delaware

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statements of Whitestone REIT on Form S-8 (Nos. 333-156512, 333-191181 and 333-196261), pertaining to the incentive plan of Whitestone REIT and the Registration Statements of Whitestone REIT on Form S-3 (Nos. 333-174608, 333-182667 and 333-203727), pertaining to the dividend reinvestment plan and universal shelf registration statement, respectively, of Whitestone REIT, of our reports dated February 29, 2016, with respect to the consolidated financial statements of Whitestone REIT, and the effectiveness of Whitestone REIT's internal control over financial reporting, each appearing in the Annual Report on Form 10-K of Whitestone REIT for the year ended December 31, 2015.

/s/ PANNELL KERR FORSTER OF TEXAS P.C.

Houston, Texas

February 29, 2016

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, James C. Mastandrea, certify that:

1. I have reviewed this annual report on Form 10-K of Whitestone REIT;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 29, 2016

/s/ James C. Mastandrea

James C. Mastandrea

Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, David K. Holeman, certify that:

1. I have reviewed this annual report on Form 10-K of Whitestone REIT;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 29, 2016

/s/ David K. Holeman

David K. Holeman

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, James C. Mastandrea, Chairman and Chief Executive Officer of Whitestone REIT (the “Company”), certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

1. The Annual Report on Form 10-K of the Company for the year ended December 31, 2015 (“the Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ James C. Mastandrea

James C. Mastandrea

Chairman and Chief Executive Officer

Date: February 29, 2016

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, David K. Holeman, Chief Financial Officer of Whitestone REIT (the “Company”), certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

1. The Annual Report on Form 10-K of the Company for the year ended December 31, 2015 (“the Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ David K. Holeman

David K. Holeman

Chief Financial Officer

Date: February 29, 2016

XML

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2015	Feb. 26, 2016	Jun. 30, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	Whitestone REIT
Entity Central Index Key	0001175535
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-K
Document Period End Date	Dec. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Common Stock, Shares Outstanding		27,004,048
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 344,674,385

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Real estate assets, at cost
Property	$ 835,538	$ 673,655
Accumulated depreciation	(89,580)	(71,587)
Total real estate assets	745,958	602,068
Cash and cash equivalents	2,587	4,236
Restricted cash	121	0
Marketable securities	435	973
Escrows and acquisition deposits	6,668	4,092
Accrued rents and accounts receivable, net of allowance for doubtful accounts	15,466	11,834
Unamortized lease commissions and loan costs	9,970	8,879
Prepaid expenses and other assets	2,672	2,215
Total assets	783,877	634,297
Liabilities:
Notes payable	499,747	394,093
Accounts payable and accrued expenses	24,051	15,882
Tenants' security deposits	5,254	4,372
Dividends and distributions payable	7,834	6,627
Total liabilities	536,886	420,974
Commitments and contingencies:	0	0
Equity:
Preferred shares, $0.001 par value per share; 50,000,000 shares authorized; none issued and outstanding as of December 31, 2015 and December 31, 2014, respectively	0	0
Common shares, $0.001 par value per share; 400,000,000 shares authorized; 26,991,493 and 22,835,695 issued and outstanding as of December 31, 2015 and December 31, 2014, respectively	27	23
Additional paid-in capital	359,971	304,078
Accumulated other comprehensive loss	(116,895)	(93,938)
Accumulated deficit	(129)	(91)
Total Whitestone REIT shareholders' equity	242,974	210,072
Noncontrolling interest in subsidiary	4,017	3,251
Total equity	246,991	213,323
Total liabilities and equity	$ 783,877	$ 634,297

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2015	Dec. 31, 2014
Stockholders' Equity:
Preferred shares, par value per share (in dollars per share)	$ 0.001	$ 0.001
Preferred shares, shares authorized (in shares)	50,000,000	50,000,000
Preferred shares, shares issued (in shares)	0	0
Preferred shares, shares outstanding (in shares)	0	0
Common shares, par value per share (in dollars per share)	$ 0.001	$ 0.001
Common shares, authorized (in shares)	400,000,000	400,000,000
Common shares, issued (in shares)	26,991,493	22,835,695
Common shares, outstanding (in shares)	26,991,493	22,835,695

XML

Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Property revenues
Rental revenues	$ 71,843	$ 56,293	$ 47,297
Other revenues	21,573	16,089	13,195
Total property revenues	93,416	72,382	60,492
Property expenses
Property operation and maintenance	18,698	15,405	14,079
Real estate taxes	12,637	9,747	8,599
Total property expenses	31,335	25,152	22,678
Other expenses (income)
General and administrative	20,312	15,274	10,912
Depreciation and amortization	19,761	15,725	13,100
Interest expense	14,910	10,579	9,975
Interest, dividend and other investment income	(313)	(90)	(136)
Total other expense	54,670	41,488	33,851
Income from continuing operations before loss on sale or disposal of assets and income taxes	7,411	5,742	3,963
Provision for income taxes	(372)	(282)	(293)
Loss on sale or disposal of assets	(185)	(111)	(49)
Income from continuing operations	6,854	5,349	3,621
Income from discontinued operations	11	510	298
Gain on sale of property from discontinued operations	0	1,887	0
Income from discontinued operations	11	2,397	298
Net income	6,865	7,746	3,919
Less: Net income attributable to noncontrolling interests	116	160	125
Net income attributable to Whitestone REIT	$ 6,749	$ 7,586	$ 3,794
Basic Earnings Per Share:
Income (loss) from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares (in dollars per share)	$ 0.25	$ 0.23	$ 0.19
Income from discontinued operations attributable to Whitestone REIT (in dollars per share)	0.00	0.10	0.02
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares (in dollars per share)	0.25	0.33	0.21
Diluted Earnings Per Share:
Income (loss) from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares (in dollars per share)	0.24	0.22	0.19
Income from discontinued operations attributable to Whitestone REIT (in dollars per share)	0.00	0.10	0.01
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares (in dollars per share)	$ 0.24	$ 0.32	$ 0.20
Weighted average number of common shares outstanding:
Basic (in shares)	24,631	22,278	18,027
Diluted (in shares)	25,683	22,793	18,273
Distributions declared per common share / OP unit (in dollars per share)	$ 1.14	$ 1.14	$ 1.14
Consolidated Statements of Comprehensive Income
Net income	$ 6,865	$ 7,746	$ 3,919
Other comprehensive gain (loss)
Unrealized gain (loss) on cash flow hedging activities	46	(136)	173
Unrealized gain (loss) on available-for-sale marketable securities	(85)	96	180
Comprehensive income	6,826	7,706	4,272
Less: Comprehensive income attributable to noncontrolling interests	115	160	136
Comprehensive income attributable to Whitestone REIT	$ 6,711	$ 7,546	$ 4,136

XML

Consolidated Statement of Changes in Equity - USD ($) $ in Thousands		Total	ATM Program [Member]		Overnight Offering [Member]	[2]	Total Shareholders' Equity [Member]	Total Shareholders' Equity [Member] ATM Program [Member]		Total Shareholders' Equity [Member] Overnight Offering [Member]	[2]	Common Stock [Member]	Common Stock [Member] ATM Program [Member]		Common Stock [Member] Overnight Offering [Member]	[2]	Additional Paid-in Capital [Member]	Additional Paid-in Capital [Member] ATM Program [Member]		Additional Paid-in Capital [Member] Overnight Offering [Member]	[2]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Noncontrolling Interests [Member]
Beginning Balance (in shares), at Dec. 31, 2012												16,943,000
Beginning Balance at Dec. 31, 2012		$ 172,887					$ 166,031					$ 16					$ 224,237					$ (57,830)	$ (392)	$ 6,856
Beginning Balance (in units), at Dec. 31, 2012																								685,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of commons shares (in shares)													282,000	[1]	4,600,000
Issuance of common shares			$ 4,191	[1]	$ 59,696			$ 4,191	[1]	$ 59,696					$ 5			$ 4,191	[1]	$ 59,691
Exchange of noncontrolling interest OP units for common shares (in shares)												(123,000)												(123,000)
Exchange of noncontrolling interest OP units for common shares		0					1,234					$ 1					1,236						(3)	$ (1,234)
Exchange offer costs		(40)					(40)										(40)
Issuance of common shares under dividend reinvestment plan (in shares)												7,000
Issuance of common shares under dividend reinvestment plan		$ 99					99										99
Shared-based compensation (in shares)		11,000
Share-based compensation		$ 2,157					2,157										2,157
Distributions		(22,347)					(21,685)															(21,685)		(662)
Unrealized gain on change in fair value of cash flow hedge		173					167																167
Unrealized gain (loss) on change in fair value of available-for-sale marketable securities		180					174															174		6
Net income		3,919					3,794															3,794		125
Ending Balance at Dec. 31, 2013		220,915					215,818					$ 22					291,571					(75,721)	(54)	$ 5,097
Ending Balance (in shares), at Dec. 31, 2013												21,944,000
Ending Balance (in units), at Dec. 31, 2013																								562,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of commons shares (in shares)	[3]												456,000
Issuance of common shares	[3]		$ 6,458					$ 6,458										$ 6,458
Exchange of noncontrolling interest OP units for common shares (in shares)												(164,000)												(164,000)
Exchange of noncontrolling interest OP units for common shares		0					1,487					$ 1					1,484						2	$ (1,487)
Exchange offer costs		(136)					(136)										(136)
Issuance of common shares under dividend reinvestment plan (in shares)												7,000
Issuance of common shares under dividend reinvestment plan		94					94										94
Repurchase of common shares (in shares)	[4]											(2,000)
Repurchase of common shares	[4]	$ (24)					(24)										(24)
Shared-based compensation (in shares)		267,000
Share-based compensation		$ 4,631					4,631										4,631
Distributions		(26,321)					(25,803)															(25,803)		(518)
Unrealized gain on change in fair value of cash flow hedge		(136)					(133)																(133)	(3)
Unrealized gain (loss) on change in fair value of available-for-sale marketable securities		96					94																94	2
Net income		7,746					7,586															7,586		160
Ending Balance at Dec. 31, 2014		$ 213,323					210,072					$ 23					304,078					(93,938)	(91)	$ 3,251
Ending Balance (in shares), at Dec. 31, 2014		22,835,695										22,836,000
Ending Balance (in units), at Dec. 31, 2014																								398,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of commons shares (in shares)												3,750,000
Issuance of common shares		$ 49,649					49,649					$ 4					49,645
Issuance of OP units (in shares)																								120,000
Issuance of OP units		1,333																						$ 1,333
Exchange of noncontrolling interest OP units for common shares (in shares)												(21,000)												(21,000)
Exchange of noncontrolling interest OP units for common shares		0					174					$ 0					173						1	$ (174)
Issuance of common shares under dividend reinvestment plan (in shares)												7,000
Issuance of common shares under dividend reinvestment plan		95					95										95
Repurchase of common shares (in shares)	[4]											(101,000)
Repurchase of common shares	[4]	$ (1,357)					(1,357)										(1,357)
Shared-based compensation (in shares)		478,000
Share-based compensation		$ 7,337					7,337										7,337
Distributions		(30,215)					(29,706)															(29,706)		(509)
Unrealized gain on change in fair value of cash flow hedge		46					45																45	1
Unrealized gain (loss) on change in fair value of available-for-sale marketable securities		(85)					(84)																(84)	(1)
Net income		6,865					6,749															6,749		116
Ending Balance at Dec. 31, 2015		$ 246,991					$ 242,974					$ 27					$ 359,971					$ (116,895)	$ (129)	$ 4,017
Ending Balance (in shares), at Dec. 31, 2015		26,991,493										26,991,000
Ending Balance (in units), at Dec. 31, 2015																								497,000

[1] Net of offering costs of $0.2 million.

[2] Net of offering costs of $2.6 million.

[3] Net of offering costs of $0.1 million.

[4] During the years ended December 31, 2015 and 2014, the Company acquired common shares held by employees who tendered owned common shares to satisfy the tax withholding on the lapse of certain restrictions on restricted shares.

XML

Consolidated Statement of Changes in Equity (Parenthetical) $ in Millions	12 Months Ended
	Dec. 31, 2013 USD ($)
ATM Program [Member]
Offering costs	$ 0.2
Overnight Offering [Member]
Offering costs	$ 2.6

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Cash flows from operating activities:
Net income from continuing operations	$ 6,854	$ 5,349	$ 3,621
Net income from discontinued operations	11	2,397	298
Net income	6,865	7,746	3,919
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	19,761	15,725	13,100
Amortization of deferred loan costs	1,212	899	1,046
Amortization of notes payable discount	295	304	463
Gain on sale of marketable securities	(44)	0	(41)
Loss on sale or disposal of assets and properties	185	111	49
Bad debt expense	1,974	1,602	1,638
Share-based compensation	7,337	4,631	2,284
Changes in operating assets and liabilities:
Escrows and acquisition deposits	(2,576)	(1,998)	4,920
Accrued rent and accounts receivable	(5,606)	(3,668)	(3,589)
Related party receivable	0	0	652
Unamortized lease commissions	(1,918)	(1,526)	(1,170)
Prepaid expenses and other assets	394	605	938
Accounts payable and accrued expenses	7,419	2,257	(1,242)
Tenants' security deposits	882	900	561
Net cash provided by operating activities	36,169	25,191	23,230
Net cash provided by operating activities of discontinued operations	11	450	654
Cash flows from investing activities:
Acquisitions of real estate	(147,950)	(129,439)	(119,102)
Additions to real estate	(12,719)	(9,330)	(6,138)
Proceeds from sales of marketable securities	496	0	747
Net cash used in investing activities	(160,173)	(138,769)	(124,493)
Net cash provided by (used in) investing activities of discontinued operations	0	7,311	(153)
Cash flows from financing activities:
Distributions paid to common shareholders	(28,457)	(25,539)	(20,294)
Distributions paid to OP unit holders	(489)	(550)	(691)
Proceeds from issuance of common shares, net of offering costs	49,649	6,458	63,887
Payments of exchange offer costs	0	(136)	(40)
Proceeds from revolving credit facility, net	107,500	85,300	65,800
Proceeds from notes payable	0	47,300	105,710
Repayments of notes payable	(2,847)	(3,306)	(110,829)
Payments of loan origination costs	(1,534)	(3,036)	(2,796)
Change in restricted cash	(121)	0	0
Repurchase of common shares	(1,357)	(24)	0
Net cash provided by financing activities	122,344	106,467	100,747
Net cash used in financing activities of discontinued operations	0	(2,905)	(38)
Net decrease in cash and cash equivalents	(1,649)	(2,255)	(53)
Cash and cash equivalents at beginning of period	4,236	6,491	6,544
Cash and cash equivalents at end of period	2,587	4,236	6,491
Supplemental disclosure of cash flow information:
Cash paid for interest	13,470	9,562	9,179
Cash paid for taxes	315	238	237
Non cash investing and financing activities:
Disposal of fully depreciated real estate	57	6,092	278
Financed insurance premiums	1,057	888	883
Value of shares issued under dividend reinvestment plan	95	94	99
Value of common shares exchanged for OP units	174	1,484	1,236
Change in fair value of available-for-sale securities	85	96	180
Change in fair value of cash flow hedge	(46)	(136)	173
Debt assumed with acquisitions of real estate	0	2,586	11,100
Interest supplement assumed with acquisition of real estate	0	0	932
Acquisition of real estate in exchange for OP units	$ 1,333	$ 0	$ 0

XML

Description of Business and Nature of Operations

12 Months Ended

Dec. 31, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS

DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS

Whitestone REIT (“Whitestone”) was formed as a real estate investment trust, pursuant to the Texas Real Estate Investment Trust Act on August 20, 1998.  In July 2004, we changed our state of organization from Texas to Maryland pursuant to a merger where we merged directly with and into a Maryland real estate investment trust formed for the sole purpose of the reorganization and the conversion of each of our outstanding common shares of beneficial interest of the Texas entity into 1.42857 common shares of beneficial interest of the Maryland entity.  We serve as the general partner of Whitestone REIT Operating Partnership, L.P. (the “Operating Partnership” or “WROP” or “OP”), which was formed on December 31, 1998 as a Delaware limited partnership.  We currently conduct substantially all of our operations and activities through the Operating Partnership.  As the general partner of the Operating Partnership, we have the exclusive power to manage and conduct the business of the Operating Partnership, subject to certain customary exceptions.  As of December 31, 2015, 2014 and 2013, we owned and operated 70, 63, and 60 commercial properties, respectively, in and around Austin, Chicago, Dallas-Fort Worth, Houston, Phoenix and San Antonio.

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation.  We are the sole general partner of the Operating Partnership and possess full legal control and authority over the operations of the Operating Partnership.  As of December 31, 2015, 2014 and 2013, we owned a majority of the partnership interests in the Operating Partnership.  Consequently, the accompanying consolidated financial statements include the accounts of the Operating Partnership.  All significant inter-company balances have been eliminated. Noncontrolling interest in the accompanying consolidated financial statements represents the share of equity and earnings of the Operating Partnership allocable to holders of partnership interests other than us.  Net income or loss is allocated to noncontrolling interests based on the weighted-average percentage ownership of the Operating Partnership during the year.  Issuance of additional common shares of beneficial interest in Whitestone (the “common shares”) and units of limited partnership interest in the Operating Partnership that are convertible into cash or, at our option, common shares on a one-for-one basis (the “OP units”) changes the percentage of ownership interests of both the noncontrolling interests and Whitestone.

Basis of Accounting.  Our financial records are maintained on the accrual basis of accounting whereby revenues are recognized when earned and expenses are recorded when incurred.

Use of Estimates.   The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Significant estimates that we use include the estimated fair values of properties acquired, the estimated useful lives for depreciable and amortizable assets and costs, the estimated allowance for doubtful accounts, the estimated fair value of interest rate swaps and the estimates supporting our impairment analysis for the carrying values of our real estate assets.  Actual results could differ from those estimates.

Reclassifications.  We have reclassified certain prior year amounts in the accompanying consolidated financial statements in order to be consistent with the current fiscal year presentation. These reclassifications had no effect on net income, total assets, total liabilities or equity. During 2014, we reclassified certain properties classified as discontinued operations to conform to the current year presentation. See Note 4 for additional discussion.

Restricted Cash. We classify all cash pledged as collateral to secure certain obligations and all cash whose use is limited as restricted cash. During 2015, pursuant to the terms of our $15.1 million4.99% Note, due January 6, 2024 (See Note 8), which is collateralized by our Anthem Marketplace property, we were required by the lenders thereunder to establish a cash management account controlled by the lenders to collect all amounts generated by our Anthem Marketplace property in order to collateralize such promissory note. As a result, these amounts are reported in the consolidated statements of cash flows under cash flows from financing activities.

Share-Based Compensation.   From time to time, we award nonvested restricted common share awards or restricted common share unit awards, which may be converted into common shares, to executive officers and employees under our 2008 Long-Term Equity Incentive Ownership Plan (the “2008 Plan”).  The vast majority of the awarded shares and units vest when certain performance conditions are met.  We recognize compensation expense when achievement of the performance conditions is probable based on management’s most recent estimates using the fair value of the shares as of the grant date.  We recognized $7.3 million, $4.7 million and $2.3 million in share-based compensation expense for the years ended December 31, 2015, 2014 and 2013, respectively.  

Noncontrolling Interests.  Noncontrolling interests are the portion of equity in a subsidiary not attributable to a parent.  The ownership interests not held by the parent are considered noncontrolling interests.  Accordingly, we have reported noncontrolling interests in equity on the consolidated balance sheets but separate from Whitestone’s equity.  On the consolidated statements of operations and comprehensive income, subsidiaries are reported at the consolidated amount, including both the amount attributable to Whitestone and noncontrolling interests.  Consolidated statements of changes in equity are included for both quarterly and annual financial statements, including beginning balances, activity for the period and ending balances for shareholders’ equity, noncontrolling interests and total equity.

Revenue Recognition.  All leases on our properties are classified as operating leases, and the related rental income is recognized on a straight-line basis over the terms of the related leases.  Differences between rental income earned and amounts due per the respective lease agreements are capitalized or charged, as applicable, to accrued rents and accounts receivable.  Percentage rents are recognized as rental income when the thresholds upon which they are based have been met.  Recoveries from tenants for taxes, insurance, and other operating expenses are recognized as revenues in the period the corresponding costs are incurred.  We have established an allowance for doubtful accounts against the portion of tenant accounts receivable which is estimated to be uncollectible.

Cash and Cash Equivalents.  We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.  Cash and cash equivalents as of December 31, 2015 and 2014 consisted of demand deposits at commercial banks and brokerage accounts.

Marketable Securities. We classify our existing marketable equity securities as available-for-sale in accordance with the Financial Accounting Standards Board's (“FASB”) Investments-Debt and Equity Securities guidance. These securities are carried at fair value with unrealized gains and losses reported in equity as a component of accumulated other comprehensive income or loss. The fair value of the marketable securities is determined using Level 1 inputs under FASB Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures.” Level 1 inputs represent quoted prices available in an active market for identical investments as of the reporting date. Gains and losses on securities sold are based on the specific identification method, and are reported as a component of interest, dividend and other investment income.

Real Estate

Development Properties.  Land, buildings and improvements are recorded at cost. Expenditures related to the development of real estate are carried at cost which includes capitalized carrying charges and development costs. Carrying charges (interest and real estate taxes) are capitalized as part of construction in progress. The capitalization of such costs ceases when the property, or any completed portion, becomes available for occupancy. For the year ended December 31, 2015, approximately $106,000 and $69,000 in interest expense and real estate taxes, respectively, were capitalized. For the year ended December 31, 2014, approximately $93,000 and $58,000 in interest expense and real estate taxes, respectively, were capitalized. For the year ended December 31, 2013, approximately $114,000 and $100,000 in interest expense and real estate taxes, respectively, were capitalized. 

Acquired Properties and Acquired Lease Intangibles.  We allocate the purchase price of the acquired properties to land, building and improvements, identifiable intangible assets and to the acquired liabilities based on their respective fair values at the time of purchase. Identifiable intangibles include amounts allocated to acquired out-of-market leases, the value of in-place leases and customer relationship value, if any. We determine fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends and specific market and economic conditions that may affect the property. Factors considered by management in our analysis of determining the as-if-vacant property value include an estimate of carrying costs during the expected lease-up periods considering market conditions, and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and estimates of lost rentals at market rates during the expected lease-up periods, tenant demand and other economic conditions. Management also estimates costs to execute similar leases including leasing commissions, tenant improvements, legal and other related expenses. Intangibles related to out-of-market leases and in-place lease value are recorded as acquired lease intangibles and are amortized as an adjustment to rental revenue or amortization expense, as appropriate, over the remaining terms of the underlying leases. Premiums or discounts on acquired out-of-market debt are amortized to interest expense over the remaining term of such debt.

Depreciation.  Depreciation is computed using the straight-line method over the estimated useful lives of 5 to 39 years for improvements and buildings, respectively.  Tenant improvements are depreciated using the straight-line method over the life of the improvement or remaining term of the lease, whichever is shorter.

Impairment.  We review our properties for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of the assets, including accrued rental income, may not be recoverable through operations.  We determine whether an impairment in value has occurred by comparing the estimated future cash flows (undiscounted and without interest charges), including the estimated residual value of the property, with the carrying cost of the property.  If impairment is indicated, a loss will be recorded for the amount by which the carrying value of the property exceeds its fair value.  Management has determined that there has been no impairment in the carrying value of our real estate assets as of December 31, 2015.

Accrued Rents and Accounts Receivable.  Included in accrued rent and accounts receivable are base rents, tenant reimbursements and receivables attributable to recording rents on a straight-line basis. An allowance for the uncollectible portion of accrued rents and accounts receivable is determined based upon customer credit-worthiness (including expected recovery of our claim with respect to any tenants in bankruptcy), historical bad debt levels, and current economic trends. As of December 31, 2015 and 2014, we had an allowance for uncollectible accounts of $6.6 million and $5.0 million, respectively. As of December 31, 2015, 2014 and 2013, we recorded bad debt expense in the amount of $2.0 million, $1.6 million and $1.6 million, respectively, related to tenant receivables that we specifically identified as potentially uncollectible based on our assessment of each tenant’s credit-worthiness.  Bad debt expenses and any related recoveries are included in property operation and maintenance expense.

Unamortized Lease Commissions and Loan Costs.  Leasing commissions are amortized using the straight-line method over the terms of the related lease agreements.  Loan costs are amortized on the straight-line method over the terms of the loans, which approximates the interest method.  Costs allocated to in-place leases whose terms differ from market terms related to acquired properties are amortized over the remaining life of the respective leases.

Prepaids and Other Assets.  Prepaids and other assets include escrows established pursuant to certain mortgage financing arrangements for real estate taxes and insurance and acquisition deposits which include earnest money deposits on future acquisitions. As part of the executive relocation arrangement discussed in Note 12, we issued a note receivable for $975,000 to the buyer, with an interest rate of 4.5% and a maturity of December 31, 2013. On December 5, 2013, the note was renewed through June 30, 2014 and bears interest at a rate of 5.2% during the renewal period. We are currently working with the buyer to renew the note receivable.

Federal Income Taxes.  We elected to be taxed as a REIT under the Code beginning with our taxable year ended December 31, 1999.  As a REIT, we generally are not subject to federal income tax on income that we distribute to our shareholders.  If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate rates.  We believe that we are organized and operate in such a manner as to qualify to be taxed as a REIT, and we intend to operate so as to remain qualified as a REIT for federal income tax purposes.

State Taxes.  We are subject to the Texas Margin Tax, which is computed by applying the applicable tax rate (1% for us) to the profit margin, which, generally, will be determined for us as total revenue less a 30% standard deduction.  Although the Texas Margin Tax is not considered an income tax, FASB ASC 740, “Income Taxes” (“ASC 740”)applies to the Texas Margin Tax.  As of December 31, 2015, 2014 and 2013, we recorded a margin tax provision of $0.4 million, $0.3 million and $0.3 million, respectively.

Fair Value of Financial Instruments.  Our financial instruments consist primarily of cash, cash equivalents, accounts receivable, accounts and notes payable and investments in marketable securities.  The carrying value of cash, cash equivalents, accounts receivable and accounts payable are representative of their respective fair values due to their short-term nature.  The fair value of our long-term debt, consisting of fixed rate secured notes, variable rate secured notes and an unsecured revolving credit facility aggregate to approximately $498.8 million and $394.9 million as compared to the book value of approximately $499.7 million and $394.1 million as of December 31, 2015 and 2014, respectively. The fair value of our long-term debt is estimated on a Level 2 basis (as provided by ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”)), using a discounted cash flow analysis based on the borrowing rates currently available to us for loans with similar terms and maturities, discounting the future contractual interest and principal payments.

Disclosure about fair value of financial instruments is based on pertinent information available to management as of December 31, 2015 and 2014. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since December 31, 2015 and current estimates of fair value may differ significantly from the amounts presented herein.

Derivative Instruments and Hedging Activities. We occasionally utilize derivative financial instruments, principally interest rate swaps, to manage our exposure to fluctuations in interest rates. We have established policies and procedures for risk assessment, and the approval, reporting and monitoring of derivative financial instruments. We recognize our interest rate swaps as cash flow hedges with the effective portion of the changes in fair value recorded in comprehensive income (loss) and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. Any ineffective portion of a cash flow hedges' change in fair value is recorded immediately into earnings. Our cash flow hedges are determined using Level 2 inputs under ASC 820. Level 2 inputs represent quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active; and model-derived valuations whose inputs are observable. As of December 31, 2015, we consider our cash flow hedges to be highly effective.

Concentration of Risk.  Substantially all of our revenues are obtained from office, warehouse and retail locations in the Austin, Chicago, Dallas-Fort Worth, Houston, Phoenix and San Antonio metropolitan areas. We maintain cash accounts in major U.S. financial institutions. The terms of these deposits are on demand to minimize risk. The balances of these accounts sometimes exceed the federally insured limits, although no losses have been incurred in connection with these deposits.

Recent accounting pronouncements. In April 2015, the FASB issued guidance requiring that debt issuance costs related to a recognized liability be presented on the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with the presentation of debt discounts. In August 2015, the FASB issued guidance to clarify that debt issuance costs related to line-of-credit agreements may still be presented as an asset and subsequently amortized ratably over the term of such arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2015 and is to be applied retrospectively. We expect this guidance to reduce total assets and total notes payable on our consolidated balance sheets for amounts classified as deferred financing costs specific to debt issuance costs. We do not expect this guidance to have any other effect on our consolidated financial statements.

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Marketable Securities

12 Months Ended

Dec. 31, 2015

Investments, Debt and Equity Securities [Abstract]

MARKETABLE SECURITIES

MARKETABLE SECURITIES

All of our marketable securities were classified as available-for-sale securities as of December 31, 2015, 2014 and 2013. Available-for-sale securities consist of the following (in thousands):

	December 31, 2015
	Amortized Cost		Gains in Accumulated Other Comprehensive Income		Losses in Accumulated Other Comprehensive Income			Estimated Fair Value
Real estate sector common stock	$	654	$	—	$	(219	)	$	435
Total available-for-sale securities	$	654	$	—	$	(219	)	$	435

	December 31, 2014
	Amortized Cost		Gains in Accumulated Other Comprehensive Income		Losses in Accumulated Other Comprehensive Income			Estimated Fair Value
Real estate sector common stock	$	1,106	$	—	$	(133	)	$	973
Total available-for-sale securities	$	1,106	$	—	$	(133	)	$	973

During the years ended December 31, 2015 and 2013, available-for-sale securities were sold for total proceeds of $496,000 and $747,000, respectively. The gross realized gains and losses on these sales totaled $44,000 and $0, respectively, in 2015, and $44,000 and $3,000, respectively, in 2013. During the year ended December 31, 2014, no available-for-sale securities were sold. For the purpose of determining gross realized gains and losses, the cost of securities sold is based on specific identification. A net unrealized holding loss on available-for-sale securities in the amount of $219,000 and $133,000 for the years ended December 31, 2015 and 2014, respectively, has been included in accumulated other comprehensive income.

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Real Estate

12 Months Ended

Dec. 31, 2015

Real Estate [Abstract]

REAL ESTATE

REAL ESTATE

As of December 31, 2015, we owned 70 commercial properties in the Austin, Chicago, Dallas-Fort Worth, Houston, Phoenix and San Antonio areas comprised of approximately 6.0 million square feet of gross leasable area.

Property Acquisitions. On August 28, 2015, we acquired the hard corner at our Gilbert Tuscany Village property for approximately $1.7 million in cash and net prorations. The 14,603 square foot single-tenant property was vacant at the time of purchase and is located in Gilbert, Arizona. No revenue and a loss of $32,000 have been included in our results of operations for the year ended December 31, 2015 since the date of acquisition.

On August 26, 2015, we acquired two parcels of undeveloped land totaling 3.12 acres for 120,000 OP units. The OP units, are convertible on a one-for-one basis for Whitestone REIT common shares, subject to certain restrictions. The undeveloped land parcels are adjacent to our Keller Place property.

On August 26, 2015, we acquired Keller Place, a property that meets our Community Centered Property™ strategy, for approximately $12.0 million in cash and net prorations. The 93,541 square foot property was 92% leased at the time of purchase and is located in the Keller suburb of Fort Worth, Texas. Revenue and income of $471,000 and $237,000, respectively, have been included in our results of operations for the year ended December 31, 2015 since the date of acquisition.

On August 26, 2015, we acquired Quinlan Crossing, a property that meets our Community Centered Property™ strategy, for approximately $37.5 million in cash and net prorations. The 109,892 square foot property was 95% leased at the time of purchase and is located in Austin, Texas. Revenue and income of $1,283,000 and $555,000, respectively, have been included in our results of operations for the year ended December 31, 2015 since the date of acquisition.

On July 2, 2015, we acquired Parkside Village North, a property that meets our Community Centered Property™ strategy, for approximately $12.5 million in cash and net prorations. The 27,045 square foot property was 100% leased at the time of purchase and is located in Austin, Texas. Revenue and income of $596,000 and $289,000, respectively, have been included in our results of operations for the year ended December 31, 2015 since the date of acquisition.

On July 2, 2015, we acquired Parkside Village South, a property that meets our Community Centered Property™ strategy, for approximately $32.5 million in cash and net prorations. The 90,101 square foot property was 100% leased at the time of purchase and is located in Austin, Texas. Revenue and income of $1,738,000 and $844,000, respectively, have been included in our results of operations for the year ended December 31, 2015 since the date of acquisition.

On May 27, 2015, we acquired Davenport Village, a property that meets our Community Centered Property™ strategy, for approximately $45.5 million in cash and net prorations. The 128,934 square foot property was 85% leased at the time of purchase and is located in Austin, Texas. Revenue and income of $2,390,000 and $967,000, respectively, have been included in our results of operations for the year ended December 31, 2015 since the date of acquisition.

On March 31, 2015, we acquired City View Village, a property that meets our Community Centered Property™ strategy, for approximately $6.3 million in cash and net prorations. The 17,870 square foot property was 100% leased at the time of purchase and is located in San Antonio, Texas. Revenue and income of $612,000 and $273,000, respectively, have been included in our results of operations for the year ended December 31, 2015 since the date of acquisition.

On December 24, 2014, we acquired the hard corner at our Village Square at Dana Park property for approximately $4.7 million, in exchange for the assumption of a $2.6 million non-recourse loan and cash of $2.1 million. The 12,047 square foot property was 88% leased at the time of purchase and is located in the Mesa submarket of Phoenix, Arizona.

On December 24, 2014, we acquired The Shops at Williams Trace, a property that meets our Community Centered Property™ strategy, for approximately $20.2 million in cash and net prorations. The 132,991 square foot property was 87% leased at the time of purchase and is located in Sugar Land, Texas.

On December 24, 2014, we acquired Williams Trace Plaza, a property that meets our Community Centered Property™ strategy, for approximately $20.4 million in cash and net prorations. The 129,222 square foot property was 95% leased at the time of purchase and is located in Sugar Land, Texas.

On December 19, 2014, we acquired a 1.39 acre parcel of undeveloped land for $0.9 million in cash and net prorations. The undeveloped land parcel is adjacent to our Fulton Ranch Towne Center property.

On November 5, 2014, we acquired Fulton Ranch Towne Center, a property that meets our Community Centered Property™strategy, for approximately$29.3 millionin cash and net prorations. The113,281square foot property was86%leased at the time of purchase and is located in Chandler, Arizona.

On November 5, 2014, we acquired The Promenade at Fulton Ranch, a property that meets our Community Centered Property™strategy, for approximately$18.6 millionin cash and net prorations. The98,792square foot property was76%leased at the time of purchase and is located in Chandler, Arizona.

On September 19, 2014, we acquired The Strand at Huebner Oaks, a property that meets our Community Centered Property™ strategy, for approximately $18.0 million in cash and net prorations. The 73,920 square foot property was 90% leased at the time of purchase and is located in San Antonio, Texas.

On July 1, 2014, we acquired Heritage Trace Plaza, a property that meets our Community Centered Property™strategy, for approximately$20.1 millionin cash and net prorations. The70,431square foot property was98%leased at the time of purchase and is located in Fort Worth, Texas.

On December 5, 2013, we acquired Market Street at DC Ranch, a property that meets our Community Centered Property™ strategy, for approximately $37.4 million in cash and net prorations. The 241,280 square foot property was 80% leased at the time of purchase and is located in Scottsdale, Arizona.

On October 17, 2013, we acquired a 2.50 acre parcel for $2.8 million in cash and net prorations. The parcel is located in Spring, Texas, a suburb of Houston, and is contiguous to our Corporate Park Woodland property. At the time of purchase, the parcel had 16,220 square feet and was 63% leased.

On October 7, 2013, we acquired Fountain Hills Plaza, a property that meets our Community Centered Property™ strategy, 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 June 28, 2013, we acquired Anthem Marketplace, a property that meets our Community Centered Property™ strategy, for approximately $23.3 million in cash and net prorations. The 113,293 square foot property was 100% leased at the time of purchase and is located in Phoenix, Arizona. In the same purchase, we also acquired an adjacent development pad site of 0.83 acres.

On June 19, 2013, we acquired Mercado at Scottsdale Ranch, a property that meets our Community Centered Property™ strategy, for approximately $21.3 million, including the assumption of a $11.1 million non-recourse loan, a $0.9 million interest rate supplement and cash of $9.3 million. The 118,730 square foot property was 100% leased at the time of purchase and is located in Scottsdale, Arizona.

On March 28, 2013, we acquired Headquarters Village Shopping Center, a property that meets our Community Centered Property™ strategy, for approximately $25.7 million in cash and net prorations. The 89,134 square foot property was 100% leased at the time of purchase and is located in Plano, Texas.

Unaudited pro forma results of operations. The pro forma unaudited results summarized below reflect our consolidated pro forma results of operations as if our acquisitions for the years ended December 31, 2015, 2014 and 2013 were acquired on January 1, 2013 and includes no other material adjustments:

INCOME STATEMENT DATA	Year Ended December 31,
	2015		2014		2013
Operating revenue	$	100,860	$	97,353	$	96,333
Net income	$	8,773	$	15,005	$	14,517

Acquisition costs. Acquisition-related costs of $1.7 million, $1.3 million and $1.0 million are included in general and administrative expenses in our income statements for the years ended December 31, 2015, 2014 and 2013, respectively.

Property dispositions. On December 31, 2014, we completed the sale of three office buildings, Zeta, Royal Crest and Featherwood, located in the Clear Lake suburb of Houston, Texas, for $10.3 million. This disposition was pursuant to our strategy of recycling capital by disposing of non-core, primarily Legacy Properties that do not fit our Community Centered Property™ strategy. As part of the transaction, we provided short-term seller financing of $2.5 million. We recorded a gain on sale of $4.4 million, including recognizing a $1.9 million gain on sale for the year ended December 31, 2014 and deferring the remaining $2.5 million gain on sale to be recognized upon receipt of principal payments on the financing provided by us.

The operating results for properties classified as discontinued operations consists of the following (in thousands):

	Year Ended December 31,
	2015			2014		2013
Property revenues	$	51		$	1,626	$	1,653
Property expenses	41			734		832
Depreciation and amortization	—			314		329
Interest expense	—			58		175
Provision for income taxes	—			10		12
Loss (gain) on sale or disposal of assets	(1		)	—		7
Operating income from discontinued operations	11			510		298
Gain on sale of property from discontinued operations	—			1,887		—
Income from discontinued operations	$	11		$	2,397	$	298

Involuntary conversion. On August 29, 2015, we experienced a fire at our Corporate Park Northwest property, located in Houston, Texas. As a result, we recorded involuntary losses of $447,000 related to the disposal of 11,268 square feet of property and related improvements and $55,000 in demolition costs which were offset with $569,000 in insurance proceeds. The $67,000 gain on conversion is included as a reduction in our loss on sale or disposal of assets in the consolidated statements of operations and comprehensive income.

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Accrued Rents and Accounts Receivable, Net

12 Months Ended

Dec. 31, 2015

Receivables [Abstract]

ACCRUED RENTS AND ACCOUNTS RECEIVABLE, NET

ACCRUED RENTS AND ACCOUNTS RECEIVABLE, NET

Accrued rents and accounts receivable, net, consists of amounts accrued, billed and due from tenants, allowance for doubtful accounts and other receivables as follows (in thousands):

	December 31,
	2015			2014
Tenant receivables	$	10,494		$	7,998
Accrued rents and other recoveries	11,619			8,800
Allowance for doubtful accounts	(6,647		)	(4,964		)
Totals	$	15,466		$	11,834

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Unamortized Lease Commissions and Loan Costs

12 Months Ended

Dec. 31, 2015

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

UNAMORTIZED LEASING COMMISSIONS AND LOAN COSTS

UNAMORTIZED LEASE COMMISSIONS AND LOAN COSTS

Costs which have been deferred consist of the following (in thousands):

	December 31,
	2015			2014
Leasing commissions	$	7,226		$	5,936
Deferred financing cost	6,490			5,785
Total cost	13,716			11,721
Less: leasing commissions accumulated amortization	(2,960		)	(2,373		)
Less: deferred financing cost accumulated amortization	(786		)	(469		)
Total cost, net of accumulated amortization	$	9,970		$	8,879

     A summary of expected future amortization of deferred costs is as follows (in thousands):

Years Ended December 31,	Leasing Commissions		Deferred Financing Costs		Total
2016	$	1,220	$	1,253	$	2,473
2017	1,001		1,239		2,240
2018	728		1,126		1,854
2019	524		612		1,136
2020	379		568		947
Thereafter	414		906		1,320
Total	$	4,266	$	5,704	$	9,970

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Future Minimum Lease Income

12 Months Ended

Dec. 31, 2015

Leases [Abstract]

FUTURE MINIMUM LEASE INCOME

FUTURE MINIMUM LEASE INCOME

We lease the majority of our properties under noncancelable operating leases, which provide for minimum base rents plus, in some instances, contingent rents based upon a percentage of the tenants’ gross receipts. A summary of minimum future rents to be received (exclusive of renewals, tenant reimbursements, and contingent rents) under noncancelable operating leases in existence as of December 31, 2015 is as follows (in thousands): 

Years Ended December 31,	Minimum Future Rents
2016	$	71,537
2017	61,511
2018	48,913
2019	37,588
2020	27,078
Thereafter	88,948
Total	$	335,575

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Debt

12 Months Ended

Dec. 31, 2015

Debt Disclosure [Abstract]

Debt Disclosure

DEBT

Mortgages and other notes payable consist of the following (in thousands):

	December 31,
Description	2015		2014
Fixed rate notes
$10.5 million, LIBOR plus 2.00% Note, due September 24, 2018 (1)	$	10,220	$	10,460
$50.0 million, 0.84% plus 1.35% to 1.90% Note, due October 30, 2020 (2)	50,000		50,000
$50.0 million, 1.50% plus 1.35% to 1.90% Note, due January 29, 2021 (3)	50,000		50,000
$100.0 million, 1.73% plus 1.65% to 2.25% Note, due October 30, 2022 (4)	100,000		—
$37.0 million 3.76% Note, due December 1, 2020	35,146		36,090
$6.5 million 3.80% Note, due January 1, 2019	6,190		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	20,040		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% Note, due December 29, 2017 (5)	7,886		7,888
$2.6 million 5.46% Note, due October 1, 2023	2,550		2,583
$11.1 million 5.87% Note, due August 6, 2016	11,305		11,607
Floating rate notes
Unsecured line of credit, LIBOR plus 1.40% to 1.95%, due October 30, 2019	127,600		120,100
	$	499,747	$	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 Term Loan 1 (as defined below) at 0.84% through February 3, 2017 and 1.75% beginning February 3, 2017 through October 30, 2020.

⁽³⁾  Promissory note includes an interest rate swap that fixed the LIBOR portion of Term Loan 2 (as defined below) at 1.50%.

⁽⁴⁾  Promissory note includes an interest rate swap that fixed the LIBOR portion of Term Loan 3 (as defined below) at 1.73%.

⁽⁵⁾  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%.

Our mortgage debt was collateralized by 20 operating properties as of December 31, 2015 with a combined net book value of $213.9 million and 20 operating properties as of December 31, 2014 with a combined net book value of $216.9 million.  Our loans contain restrictions that would require the payment of prepayment penalties for the acceleration of outstanding debt and are secured by deeds of trust on certain of our properties and the assignment of certain rents and leases associated with those properties. 

On December 24, 2014, we assumed a $2.6 million promissory note as part of our acquisition of the hard corner at Village Square at Dana Park (see Note 4). The 5.46% fixed interest rate note matures October 1, 2023.

On November 26, 2014, we, operating through our subsidiary, Whitestone Headquarters Village, LLC, a Delaware limited liability company, entered into a $19.0 million promissory note (the “Headquarters Note”), with a fixed interest rate of 4.15% payable to Morgan Stanley Bank, N.A. and a maturity date of December 1, 2024. Proceeds from the Headquarters Note were used to repay a portion of the Facility (as defined below).

On November 7, 2014, we, through our Operating Partnership, entered into an unsecured revolving credit facility (the “2014 Facility”) with the lenders party thereto, with BMO Capital Markets, Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and U.S. Bank, National Association, as co-lead arrangers and joint book runners, and Bank of Montreal, as administrative agent (the “Agent”). The 2014 Facility amended and restated our previous unsecured revolving credit facility. On October 30, 2015, we, through our Operating Partnership, entered into the First Amendment to the 2014 Facility (the “First Amendment”) with the guarantors party thereto, the lenders party thereto and the Agent . We refer to the 2014 Facility, as amended by the First Amendment, as the “Facility.”

Pursuant to the First Amendment, the Company made the following amendments to the 2014 Facility:

• extended the maturity date of the $300 million unsecured revolving credit facility under the 2014 Facility (the “Revolver”) to October 30, 2019 from November 7, 2018;

• converted $100 million of outstanding borrowings under the Revolver to a new $100 million unsecured term loan under the 2014 Facility (“Term Loan 3”) with a maturity date of October 30, 2022;

• extended the maturity date of the first $50 million unsecured term loan under the 2014 Facility (“Term Loan 1”) to October 30, 2020 from February 17, 2017; and

• extended the maturity date of the second $50 million unsecured term loan under the 2014 Facility (“Term Loan 2” and together with Term Loan 1 and Term Loan 3, the “Term Loans”) to January 29, 2021 from November 7, 2019.

Borrowings under the Facility accrue interest (at the Operating Partnership's option) at a Base Rate or an Adjusted LIBOR plus an applicable margin based upon our then existing leverage. The applicable margin for Adjusted LIBOR borrowings ranges from 1.40% to 1.95% for the Revolver and 1.35% to 2.25% for the Term Loans. Base Rate means the higher of: (a) the Agent's prime commercial rate, (b) the sum of (i) the average rate quoted by the Agent by two or more federal funds brokers selected by the Agent for sale to the Agent at face value of federal funds in the secondary market in an amount equal or comparable to the principal amount for which such rate is being determined, plus (ii) 1/2 of 1.00%, and (c) the LIBOR rate for such day plus 1.00%. Adjusted LIBOR means LIBOR divided by one minus the Eurodollar Reserve Percentage. The Eurodollar Reserve Percentage means the maximum reserve percentage at which reserves are imposed by the Board of Governors of the Federal Reserve System on eurocurrency liabilities.

We serve as the guarantor for funds borrowed by the Operating Partnership under the Facility. The Facility contains customary terms and conditions, including, without limitation, affirmative and negative covenants such as information reporting requirements, maximum secured indebtedness to total asset value, minimum EBITDA (earnings before interest, taxes, depreciation, amortization or extraordinary items) to fixed charges, and maintenance of a minimum net worth. The Facility also contains customary events of default with customary notice and cure, including, without limitation, nonpayment, breach of covenant, misrepresentation of representations and warranties in a material respect, cross-default to other major indebtedness, change of control, bankruptcy and loss of REIT tax status.

The Facility includes an accordion feature that will allow the Operating Partnership to increase the borrowing capacity to $700 million, upon the satisfaction of certain conditions. As of December 31, 2015, $327.6 million was drawn on the Facility and our unused borrowing capacity was $172.4 million, assuming that we use the proceeds of the Facility to acquire properties, or to repay debt on properties, that are eligible to be included in the unsecured borrowing base. Proceeds from the Facility were used for general corporate purposes, including property acquisitions, debt repayment, capital expenditures, the expansion, redevelopment and re-tenanting of properties in our portfolio and working capital. We intend to use the additional proceeds from the Facility for general corporate purposes, including property acquisitions, debt repayment, capital expenditure, the expansion, redevelopment and re-tenanting of properties in our portfolio and working capital.

On September 3, 2014, we, operating through our subsidiary, Whitestone Pecos Ranch, LLC, a Delaware limited liability company, entered into a $14.0 million promissory note (the “Pecos Note”), with a fixed interest rate of 4.34% payable to Wells Fargo Bank, National Association and a maturity date of September 11, 2024. Proceeds from the Pecos Note were used to repay a portion of the Facility.

On August 26, 2014, we, operating through our subsidiary, Whitestone Shops at Starwood, LLC, a Delaware limited liability company, entered into a $14.3 million promissory note (the “Starwood Note”), with a fixed interest rate of 4.34% payable to Wells Fargo Bank, National Association and a maturity date of September 11, 2024. Proceeds from the Starwood Note were used to repay a portion of the Facility.

On December 23, 2013, we, operating through our subsidiary, Whitestone Woodlake Plaza, LLC, a Delaware limited liability company, entered into a $6.5 million promissory note (the “Woodlake Note”), with a fixed interest rate of 3.80% payable to Western Reserve Life Assurance Company of Ohio and a maturity of January 1, 2019. Proceeds from the Woodlake Note were used to repay a portion of the Facility.

On December 16, 2013, we, operating through our subsidiary, Whitestone Anthem Marketplace, LLC, a Delaware limited liability company, entered into a $15.1 million promissory note (the “Anthem Note”), with a fixed interest rate of 4.99% payable to Citigroup Global Markets Realty Corporation and a maturity of January 6, 2024. Proceeds from the Anthem Note were used to repay a portion of the Facility.

On November 26, 2013, we, operating through our subsidiary, Whitestone Industrial-Office LLC, a Texas limited liability company (“Whitestone Industrial”), entered into a $37.0 million promissory note (the “Industrial Note”), with a fixed interest rate of 3.76% payable to Jackson Life National Insurance Company and a maturity of December 1, 2020. Proceeds from the Industrial Note were used to repay our existing $26.9 million floating rate loan that matured on December 1, 2013. The remainder of the proceeds were used to pay off approximately $10.1 million in fixed rate indebtedness maturing in 2014.

The Industrial Note is a non-recourse loan secured by Whitestone Industrial's nine properties, including Corporate Park Woodland, Holly Hall Industrial Park, Interstate 10 Warehouse, Main Park, Plaza Park, Westbelt Plaza, Westgate Service Center, Corporate Park West and Dairy Ashford.

On September 26, 2013, we, operating through our subsidiary, Whitestone Uptown Tower, LLC, a Delaware limited liability company (“Whitestone Uptown”), entered into a $16.5 million promissory note (the “Uptown Note”), with a fixed interest rate of 4.97% payable to Morgan Stanley Capital Holdings LLC and a maturity of September 26, 2023. Proceeds from the Uptown Note were used to repay a portion of the Facility.

On September 24, 2013, we, operating through our subsidiary, Whitestone Terravita Marketplace, LLC, a Delaware limited liability company (“Whitestone Terravita”), entered into a $10.5 million promissory note (the “Terravita Note”), with an applicable interest rate of LIBOR plus 2.00%, payable to Bank of America, N.A. and a maturity of September 24, 2018. Proceeds from the Terravita Note were used to repay a portion of the Facility.

The Terravita Note is a non-recourse loan secured by Whitestone Terravita's Terravita Marketplace property, located in Scottsdale, Arizona, and a limited guarantee by the Operating Partnership. In conjunction with the Terravita Note, a deed of trust was executed by Whitestone Terravita that contains customary terms and conditions, including representations, warranties and covenants by Whitestone Terravita that include, without limitation, assignment of rents, warranty of title, insurance requirements and maintenance, use and management of the property.

On June 19, 2013, we assumed a $11.1 million promissory note as part of our acquisition of Mercado at Scottsdale Ranch (see Note 4). The 5.87% fixed interest rate note matures on August 16, 2016. In conjunction with our acquisition, we received an interest rate supplement from the seller in the amount of $932,000, which we will accrete into expense over the life of the note. As a result of the supplement, the imputed interest rate is 3.052%, which we consider to be an appropriate market rate.

On May 31, 2013, we, operating through our subsidiary, Whitestone Pinnacle of Scottsdale, LLC, a Delaware limited liability company (“Whitestone Pinnacle”), refinanced our $14.1 million promissory note, with an applicable interest rate of 5.695% and a maturity of June 1, 2013, with a $20.2 million promissory note (the “Pinnacle Note”) payable to Cantor Commercial Real Estate Lending, L.P. with an applicable interest rate of 4.2805%, and a maturity of June 6, 2023.

The Pinnacle Note is a non-recourse loan secured by Whitestone Pinnacle's Pinnacle of Scottsdale property, located in Scottsdale, Arizona, and a limited guarantee by Whitestone. In conjunction with the Pinnacle Note, a deed of trust was executed by Whitestone Pinnacle that contains customary terms and conditions, including representations, warranties and covenants by Whitestone Pinnacle that include, without limitation, assignment of rents, warranty of title, insurance requirements and maintenance, use and management of the property.

The Pinnacle Note contains events of default that include, among other things, non-payment and default under the deed of trust. Upon occurrence of an event of default, the lender is entitled to accelerate all obligations of Whitestone Pinnacle. The lender will also be entitled to receive the entire unpaid balance and unpaid interest at a default rate.

Certain other of our loans are subject to customary covenants.  As of December 31, 2015, we were in compliance with all loan covenants.

Annual maturities of notes payable as of December 31, 2015 are due during the following years:

	Amount Due
Year	(in thousands)
2016	$	13,269
2017	10,213
2018	12,136
2019	135,649
2020	82,827
Thereafter	245,653
Total	$	499,747

Contractual Obligations

As of December 31, 2015, we had the following contractual obligations:

			Payment due by period (in thousands)
Contractual Obligations	Total		Less than 1 year (2016)		1 - 3 years (2017 - 2018)		3 - 5 years (2019 - 2020)		More than 5 years (after 2020)
Long-Term Debt - Principal	$	499,747	$	13,269	$	22,349	$	218,476	$	245,653
Long-Term Debt - Fixed Interest	80,589		13,030		24,753		23,002		19,804
Long-Term Debt - Variable Interest (1)	8,036		2,096		4,193		1,747		—
Unsecured credit facility - Unused commitment fee (2)	1,322		345		690		287		—
Operating Lease Obligations	186		74		88		21		3
Total	$	589,880	$	28,814	$	52,073	$	243,533	$	265,460

⁽¹⁾   As of December 31, 2015, we had one loan totaling $127.6 million which bore interest at a floating rate.  The variable interest rate payments are based on LIBOR plus 1.35% to LIBOR plus 1.95%, which reflects our new interest rates under the Facility.  The information in the table above reflects our projected interest rate obligations for the floating rate payments based on one-month LIBOR as of December 31, 2015, of 0.24%.

⁽²⁾  The unused commitment fees on the Facility, payable quarterly, are based on the average daily unused amount of the Facility. The fees are 0.20% for facility usage greater than 50% or 0.25% for facility usage less than 50%. The information in the table above reflects our projected obligations for the Facility based on our December 31, 2015 balance of $327.6 million.

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Derivatives and Hedging Activities (Notes)

12 Months Ended

Dec. 31, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging Activities

DERIVATIVES AND HEDGING ACTIVITIES

The fair value of our interest rate swaps is as follows (in thousands):

	Balance Sheet Location	Estimated Fair Value
Interest rate swaps:
December 31, 2015	Accounts payable and accrued expenses	$	617
December 31, 2014	Accounts payable and accrued expenses	$	1,016

On November 19, 2015, we, through our Operating Partnership, entered into an interest rate swap with Bank of Montreal that fixed the LIBOR portion of Term Loan 3 under the Facility at 1.73%. In the fourth quarter of 2015, pursuant to the terms of the agreement governing the interest rate swap, Bank of Montreal assigned $35.0 million of the swap to U.S. Bank, National Association, and $15.0 million of the swap to SunTrust Bank. See Note 8 for additional information regarding the Facility. The swap began on November 30, 2015 and will mature on October 28, 2022. We have designated the interest rate swap as a cash flow hedge with the effective portion of the changes in fair value to be recorded in comprehensive income (loss) and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. The ineffective portion of the change in fair value, if any, will be recognized directly in earnings.

On November 19, 2015, we, through our Operating Partnership, entered into an interest rate swap with Bank of Montreal that fixed the LIBOR portion of Term Loan 1 under the Facility at 1.75%. In the fourth quarter of 2015, pursuant to the terms of the agreement governing the interest rate swap, Bank of Montreal assigned $3.8 million of the swap to Regions Bank, $6.5 million of the swap to U.S. Bank, National Association, $14.0 million of the swap to Wells Fargo Bank, National Association, $14.0 million of the swap to Bank of America, N.A., and $5.0 million of the swap to SunTrust Bank. See Note 8 for additional information regarding the Facility. The swap will begin on February 3, 2017 and will mature on October 30, 2020. We have designated the interest rate swap as a cash flow hedge with the effective portion of the changes in fair value to be recorded in comprehensive income (loss) and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. The ineffective portion of the change in fair value, if any, will be recognized directly in earnings.

On November 19, 2015, we, through our Operating Partnership, entered into an interest rate swap with Bank of Montreal that fixed the LIBOR portion of Term Loan 2 under the Facility at 1.50%. In the fourth quarter of 2015, pursuant to the terms of the agreement governing the interest rate swap, Bank of Montreal assigned $3.8 million of the swap to Regions Bank, $6.5 million of the swap to U.S. Bank, National Association, $14.0 million of the swap to Wells Fargo Bank, National Association, $14.0 million of the swap to Bank of America, N.A., and $5.0 million of the swap to SunTrust Bank. See Note 8 for additional information regarding the Facility. The swap began on December 7, 2015 and will mature on January 29, 2021. We have designated the interest rate swap as a cash flow hedge with the effective portion of the changes in fair value to be recorded in comprehensive income (loss) and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. The ineffective portion of the change in fair value, if any, will be recognized directly in earnings.

On November 1, 2013, we, through our subsidiary, Whitestone Terravita, entered into an interest rate swap with Bank of America, N.A. that fixed the LIBOR portion of our Terravita Note at 1.55%. See Note 8 for additional information regarding the Terravita Note. The swap began on November 1, 2013 and will mature on September 24, 2018. We have designated the interest rate swap as a cash flow hedge with the effective portion of the changes in fair value to be recorded in comprehensive income (loss) and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. The ineffective portion of the change in fair value, if any, will be recognized directly in earnings.

On March 8, 2013, we, through our Operating Partnership, entered into an interest rate swap with U.S. Bank, National Association that fixed the LIBOR portion of Term Loan 1 under the Facility at 0.84%. See Note 8 for additional information regarding the Facility. The swap began on January 7, 2014 and will mature on February 3, 2017. We have designated the interest rate swap as a cash flow hedge with the effective portion of the changes in fair value to be recorded in comprehensive income (loss) and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. The ineffective portion of the change in fair value, if any, will be recognized directly in earnings.

A summary of our interest rate swap activity is as follows (in thousands):

	Amount Recognized as Comprehensive Income (Loss)			Location of Loss Recognized in Earnings	Amount of Loss Recognized in Earnings (1)
Year ended December 31, 2015	$	46		Interest expense	$	(991	)
Year ended December 31, 2014	$	(136	)	Interest expense	$	(838	)
Year ended December 31, 2013	$	173		Interest expense	$	(363	)

⁽¹⁾  Amounts represent the effective portions of our interest rate swaps. We did not recognize any ineffective portion of our interest rate swaps in earnings for the years ended December 31, 2015, 2014 and 2013.

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Earnings Per Share

12 Months Ended

Dec. 31, 2015

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

Basic earnings per share for our common shareholders is calculated by dividing income from continuing operations excluding amounts attributable to unvested restricted shares and the net income attributable to non-controlling interests by our weighted-average common shares outstanding during the period.  Diluted earnings per share is computed by dividing the net income attributable to common shareholders excluding amounts attributable to unvested restricted shares and the net income attributable to non-controlling interests by the weighted-average number of common shares including any dilutive unvested restricted shares.

Certain of our performance-based restricted common shares are considered participating securities, which require the use of the two-class method for the computation of basic and diluted earnings per share.   During the years ended December 31, 2015, 2014 and 2013, 429,809, 471,310 and 595,782 OP units, respectively, were excluded from the calculation of diluted earnings per share because their effect would be anti-dilutive.

For the years ended December 31, 2015, 2014 and 2013, distributions of $564,000, $272,000 and $177,000, respectively, were made to the holders of certain restricted common shares, $36,000, $71,000 and $127,000 of which were charged against earnings, respectively.  See Note 14 for information related to restricted common shares under the 2008 Plan.

	Year Ended
	December 31,
(in thousands, except per share data)	2015			2014			2013
Numerator:
Income from continuing operations	$	6,854		$	5,349		$	3,621
Less: Net income attributable to noncontrolling interests	(116		)	(111		)	(115		)
Distributions paid on unvested restricted shares	(528		)	(201		)	(50		)
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	6,210			5,037			3,456
Income from discontinued operations	11			2,397			298
Less: Net income attributable to noncontrolling interests	—			(49		)	(10		)
Income from discontinued operations attributable to Whitestone REIT	11			2,348			288
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	6,221		$	7,385		$	3,744
Denominator:
Weighted average number of common shares - basic	24,631			22,278			18,027
Effect of dilutive securities:
Unvested restricted shares	1,052			515			246
Weighted average number of common shares - dilutive	25,683			22,793			18,273
Earnings Per Share:
Basic:
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	$	0.25		$	0.23		$	0.19
Income from discontinued operations attributable to Whitestone REIT	0.00			0.10			0.02
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	0.25		$	0.33		$	0.21
Diluted:
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	$	0.24		$	0.22		$	0.19
Income from discontinued operations attributable to Whitestone REIT	0.00			0.10			0.01
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	0.24		$	0.32		$	0.20

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Federal Income Taxes

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

FEDERAL INCOME TAXES

FEDERAL INCOME TAXES

Federal income taxes are not provided because we intend to and believe we qualify as a REIT under the provisions of the Code and because we have distributed and intend to continue to distribute all of our taxable income to our shareholders.  Our shareholders include their proportionate taxable income in their individual tax returns.  As a REIT, we must distribute at least 90% of our real estate investment trust taxable income to our shareholders and meet certain income sources and investment restriction requirements.  In addition, REITs are subject to a number of organizational and operational requirements.  If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax (including any applicable alternative minimum tax) on our taxable income at regular corporate tax rates.

Taxable income differs from net income for financial reporting purposes principally due to differences in the timing of recognition of interest, real estate taxes, depreciation and rental revenue. 

For federal income tax purposes, the cash distributions to shareholders are characterized as follows for the years ended December 31: 

	2015		2014		2013
Ordinary income (unaudited)	60.9	%	53.3	%	38.5	%
Return of capital (unaudited)	37.7	%	21.3	%	61.3	%
Capital gain distributions (unaudited)	1.4	%	25.4	%	0.2	%
Total	100.0	%	100.0	%	100.0	%

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Related Party Transactions

12 Months Ended

Dec. 31, 2015

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

Executive Relocation. On July 9, 2010, upon the unanimous recommendation of our Compensation Committee, we entered into an arrangement with Mr. Mastandrea with respect to the disposition of his residence in Cleveland, Ohio. Mr. Mastandrea listed the residence in the second half of 2007 and has had to pay for security, taxes, insurance and maintenance expenses related to the residence. Under the relocation arrangement as amended on August 9, 2012, we agreed to pay Mr. Mastandrea the shortfall, if any, in the amount realized from the sale of the Cleveland residence, below $2,450,000, plus tax on the amount of such payment at the maximum federal income tax rate. The amount of the shortfall was to be paid in a combination of cash and common shares at the market value of the shares, as determined upon agreement between Mr. Mastandrea and the Compensation Committee.

In addition, the arrangement required us to continue paying the previously agreed upon cost of housing expenses for the Mastandrea family in Houston, Texas for a period of one year following the date of sale of the residence. We had previously agreed to reimburse Mr. Mastandrea for out-of-pocket moving costs including packing, temporary storage, transportation and moving supplies.

On December 21, 2012, Mr. Mastandrea sold the residence to a third party for a price of $1,125,000. Pursuant to the relocation arrangement, we paid cash of $1,325,000, representing the shortfall of the amount realized from the sale of the property, and $852,000, which represented moving expenses and closing costs incurred by Mr. Mastandrea and federal taxes. No common shares were issued. The total expense incurred by us of $2,177,000 is shown separately in our consolidated financial statements. In addition, we issued a note receivable for $975,000 to the buyer, with an interest rate of 4.5% and a maturity of December 31, 2013. On December 5, 2013, the note was renewed through June 30, 2014 and bears interest at a rate of 5.2% during the renewal period. We are currently working with the buyer to renew the note receivable. As a result of this transaction, we also recorded a related party receivable of $652,000, which represents the federal income tax withholding not deducted from our payment to Mr. Mastandrea. Subsequent to December 31, 2012, we received the $652,000 and paid it to the federal government on behalf of Mr. Mastandrea.

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Equity

12 Months Ended

Dec. 31, 2015

Stockholders' Equity Note [Abstract]

EQUITY

EQUITY

Under our declaration of trust, as amended, we have authority to issue up to 400 million common shares of beneficial interest, $0.001 par value per share, and up to 50 million preferred shares of beneficial interest, $0.001 par value per share.

Equity Offerings

On June 26, 2015, we completed the sale of 3,750,000 common shares, $0.001 par value per share, at a purchase price of $13.3386 per share. Total net proceeds from the offering, after deducting offering expenses, were approximately $49.7 million, which were contributed to the Operating Partnership in exchange for OP units. The Operating Partnership used the net proceeds from this offering to repay a portion of the Facility and for general corporate purposes.

On October 8, 2013, we completed the sale of 4,000,000 common shares, $0.001 par value per share, and on October 28, 2013, upon the underwriters' exercise of the over-allotment option, we completed the sale of 600,000 additional common shares, at a price to the public of $13.54 per share. Total net proceeds from the offering, including the over-allotment shares, and after deducting the underwriting discount and offering expenses, were approximately $59.7 million, which we contributed to the Operating Partnership in exchange for OP units. The Operating Partnership used the net proceeds from this offering for general corporate purposes, which included acquisitions of additional properties, the repayment of outstanding indebtedness, capital expenditures (including tenant improvements), the expansion, redevelopment and/or re-tenanting of properties in our portfolio, working capital and other general purposes.

On June 19, 2013, we entered into five equity distribution agreements for an at-the-market distribution program.  On August 14, 2013, we entered into a sixth equity distribution agreement on substantially similar terms as the existing equity distribution agreements and amended the existing equity distribution agreements in order to add an additional placement agent (together, the “2013 equity distribution agreements”). Pursuant to the terms and conditions of the 2013 equity distribution agreements, we could issue and sell up to an aggregate of $50 million of our common shares. Actual sales depended on a variety of factors to be determined by us from time to time, including (among others) market conditions, the trading price of our common shares, capital needs and our determinations of the appropriate sources of funding for us, and were made in transactions that will be deemed to be “at-the-market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”). We had no obligation to sell any of our common shares, and could at any time suspend offers under the 2013 equity distribution agreements or terminate the 2013 equity distribution agreements. For the year ended December 31, 2015, we sold 456,090 common shares under the 2013 equity distribution agreements, with net proceeds to us of approximately $6.4 million. In connection with such sales, we paid compensation of $0.1 million to the sales agents. For the year ended December 31, 2014, we sold 282,239 common shares under the 2013 equity distribution agreements, with net proceeds to us of approximately $4.2 million. In connection with such sales, we paid compensation of $0.2 million to the sales agents.

On June 4, 2015, we entered into nine amended and restated equity distribution agreements (the “2015 equity distribution agreements”). Pursuant to the terms and conditions of the 2015 equity distribution agreements, we can issue and sell up to an aggregate of $50 million of our common shares. Actual sales will depend on a variety of factors to be determined by us from time to time, including (among others) market conditions, the trading price of our common shares, capital needs and our determinations of the appropriate sources of funding for us, and will be made in transactions that will be deemed to be “at-the-market” offerings as defined in Rule 415 under the Securities Act. We have no obligation to sell any of our common shares, and can at any time suspend offers under the 2015 equity distribution agreements or terminate the 2015 equity distribution agreements. We have not sold any common shares under the 2015 equity distribution agreements.

Operating Partnership Units

Substantially all of our business is conducted through the Operating Partnership.  We are the sole general partner of the Operating Partnership.  As of December 31, 2015, we owned a 98.2% interest in the Operating Partnership.

Limited partners in the Operating Partnership holding OP units have the right to redeem their OP units for cash or, at our option, common shares at a ratio of one OP unit for one common share.  Distributions to OP unit holders are paid at the same rate per unit as distributions per share to Whitestone common shares.  As of December 31, 2015 and 2014, there were 27,367,704 and 22,926,599 OP units outstanding, respectively.  We owned 26,870,671 and 22,528,207 OP units as of December 31, 2015 and 2014, respectively. The balance of the OP units is owned by third parties, including certain trustees.  Our weighted-average share ownership in the Operating Partnership was approximately 98.3%, 97.9% and 96.8% for the years ended December 31, 2015, 2014 and 2013, respectively. For the year ended December 31, 2015 and 2014, 21,359 and 163,700 OP units, respectively, were redeemed for an equal number of common shares.

Distributions

The following table reflects the total distributions we have paid (including the total amount paid and the amount paid per share) in each indicated quarter (in thousands, except per share data):

	Common Shares				Noncontrolling OP Unit Holders				Total
Quarter Paid	Distribution Per Common Share		Total Amount Paid		Distribution Per OP Unit		Total Amount Paid		Total Amount Paid
2015
Fourth Quarter	$	0.2850	$	7,666	$	0.2850	$	143	$	7,809
Third Quarter	0.2850		7,664		0.2850		122		7,786
Second Quarter	0.2850		6,601		0.2850		111		6,712
First Quarter	0.2850		6,526		0.2850		113		6,639
Total	$	1.1400	$	28,457	$	1.1400	$	489	$	28,946
2014
Fourth Quarter	$	0.2850	$	6,484	$	0.2850	$	114	$	6,598
Third Quarter	0.2850		6,457		0.2850		126		6,583
Second Quarter	0.2850		6,367		0.2850		152		6,519
First Quarter	0.2850		6,231		0.2850		158		6,389
Total	$	1.1400	$	25,539	$	1.1400	$	550	$	26,089

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Incentive Share Plan

12 Months Ended

Dec. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

INCENTIVE SHARE PLAN

INCENTIVE SHARE PLAN

On July 29, 2008, our shareholders approved the 2008 Long-Term Equity Incentive Ownership Plan (the “Plan”). On December 22, 2010, our board of trustees amended the Plan to allow for the issuance of common shares pursuant to the Plan. The Plan, as amended, provides that awards may be made with respect to common shares of Whitestone or OP units. The maximum aggregate number of common shares that may be issued under the Plan is increased upon each issuance of common shares by Whitestone so that at any time the maximum number of shares that may be issued under the Plan shall equal 12.5% of the aggregate number of common shares of Whitestone and OP units issued and outstanding (other than shares and/or units issued to or held by Whitestone).

The Compensation Committee of our board of trustees administers the Plan, except with respect to awards to non-employee trustees, for which the Plan is administered by our board of trustees.  The Compensation Committee is authorized to grant share options, including both incentive share options and non-qualified share options, as well as share appreciation rights, either with or without a related option. The Compensation Committee is also authorized to grant restricted common shares, restricted common share units, performance awards and other share-based awards. 

On April 2, 2014, the Compensation Committee approved the modification of the vesting provisions with respect to awards of an aggregate of 633,704 restricted common shares and restricted common share units for 51 of our employees. The modified time-based shares will vest annually in three equal installments. The modified performance-based restricted common shares and restricted common share units were modified to include performance-based vesting based on achievement of certain absolute financial goals, as well as one to two years of time-based vesting post achievement of financial goals. Continued employment is required through the applicable vesting date. Additionally, 2,049,116 restricted performance-based common share units were granted with the same vesting conditions as the modified performance-based grants described above. If the performance targets are not met prior to December 31, 2018, any unvested restricted common shares and restricted common units will be forfeited.

A summary of the share-based incentive plan activity as of and for the year ended December 31, 2015 is as follows:

	Shares		Weighted-Average Grant Date Fair Value (1)
Non-vested at January 1, 2015	2,411,068		$	14.45
Granted	327,122		13.49
Modified to new agreements	—		—
Modified from existing agreements	—		—
Vested	(348,786	)	14.25
Forfeited	(101,144	)	14.45
Non-vested at December 31, 2015	2,288,260		$	14.34
Available for grant at December 31, 2015	957,084

⁽¹⁾  The fair value of the shares granted were determined based on observable market transactions occurring near the date of the grants.

A summary of our nonvested and vested shares activity for the years ended December 31, 2015, 2014 and 2013 is presented below:

	Shares Granted			Shares Vested
Year Ended	Non-Vested Shares Issued	Weighted-Average Grant-Date Fair Value		Vested Shares		Total Vest-Date Fair Value
						(in thousands)
Year Ended December 31, 2015	327,122	$	13.49	(348,786	)	$	4,969
Year Ended December 31, 2014	2,058,930	$	14.40	(133,774	)	$	1,721
Year Ended December 31, 2013	328,005	$	15.43	(15,270	)	$	224

Total compensation recognized in earnings for share-based payments for the years ended December 31, 2015, 2014 and 2013 was $7.3 million, $4.7 million and $2.3 million, respectively.

Based on our current financial projections, we expect approximately 82% of the unvested awards to vest over the next 39 months. As of December 31, 2015, there was approximately $9.9 million in unrecognized compensation cost related to outstanding non-vested performance-based shares, which are expected to vest over a period of 39 months, and approximately $3.4 million in unrecognized compensation cost related to outstanding non-vested time-based shares, which are expected to be recognized over a period of approximately 15 months beginning on January 1, 2016.

We expect to record approximately $13.3 million in share-based compensation subsequent to the year ended December 31, 2015. The unrecognized share-based compensation cost is expected to vest over a weighted average period of 25 months. The dilutive impact of the performance-based shares will be included in the denominator of the earnings per share calculation beginning in the period that the performance conditions are expected to be met.

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Grants to Trustees

12 Months Ended

Dec. 31, 2015

Grants to Trustees [Abstract]

GRANTS TO TRUSTEES

GRANTS TO TRUSTEES

On December 21, 2015, each of our four independent trustees and one trustee emeritus was granted 1,500 common shares, which vested immediately. The 7,500 common shares granted to our trustees had a grant date fair value of $12.10 per share. On December 21, 2015, one of our independent trustees elected to receive a total of 992 common shares with a grant date fair value of $12.10 in lieu of cash for board fees. The fair value of the shares granted during the year ended December 31, 2015 was determined using quoted prices available on the date of grant.

On October 24, 2014, each of our four independent trustees and one trustee emeritus was granted 1,500 common shares, which vested immediately. The 7,500 common shares granted to our trustees had a grant date fair value of $14.53 per share. On December 9, 2014, two of our independent trustees elected to receive a total of 2,314 common shares with a grant date fair value of $14.69 in lieu of cash for board fees. The fair value of the shares granted were determined using quoted prices available on the date of grant.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

We are a participant in various legal proceedings and claims that arise in the ordinary course of our business.  These matters are generally covered by insurance.  While the resolution of these matters cannot be predicted with certainty, we believe that the final outcome of these matters will not have a material effect on our financial position, results of operations, or cash flows.

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Segment Information

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

Our management historically has not differentiated by property types and therefore does not present segment information.

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Select Quarterly Financial Data (unaudited)

12 Months Ended

Dec. 31, 2015

Quarterly Financial Information Disclosure [Abstract]

SELECT QUARTERLY FINANCIAL DATA (unaudited)

SELECT QUARTERLY FINANCIAL DATA (unaudited)

The following is a summary of our unaudited quarterly financial information for the years ended December 31, 2015 and 2014 (in thousands, except per share data):

	First			Second			Third		Fourth
	Quarter			Quarter			Quarter		Quarter
2015
Revenues from continuing operations	$	21,252		$	21,970		$	24,599	$	25,595
Income from continuing operations	1,629			1,593			1,551		2,081
Income (loss) from discontinued operations	(8		)	(33		)	44		8
Net income attributable to Whitestone REIT	1,594			1,534			1,570		2,051
Basic Earnings per share:
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	$	0.07		$	0.06		$	0.05	$	0.07
Income from discontinued operations attributable to Whitestone REIT	0.00			0.00			0.00		0.00
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares (1)	$	0.07		$	0.06		$	0.05	$	0.07
Diluted Earnings per share:
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	$	0.06		$	0.06		$	0.05	$	0.07
Income from discontinued operations attributable to Whitestone REIT	0.00			0.00			0.00		0.00
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares (1)	$	0.06		$	0.06		$	0.05	$	0.07
2014
Revenues	$	17,376		$	17,261		$	18,540	$	19,205
Income from continuing operations	$	2,312		$	1,135		$	1,012	$	890
Income from discontinued operations	$	120		$	145		$	109	$	2,023
Net income attributable to Whitestone REIT	$	2,372		$	1,252		$	1,100	$	2,862
Basic Earnings per share:
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	$	0.10		$	0.05		$	0.04	$	0.04
Income from discontinued operations attributable to Whitestone REIT	0.01			0.00			0.01		0.08
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares (1)	$	0.11		$	0.05		$	0.05	$	0.12
Diluted Earnings per share:
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	$	0.10		$	0.05		$	0.04	$	0.03
Income from discontinued operations attributable to Whitestone REIT	0.01			0.00			0.01		0.09
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares (1)	$	0.11		$	0.05		$	0.05	$	0.12

⁽¹⁾   The sum of individual quarterly basic and diluted earnings per share amounts may not agree with the year-to-date basic and diluted earning per share amounts as the result of each period's computation being based on the weighted average number of common shares outstanding during that period.

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Subsequent Events

12 Months Ended

Dec. 31, 2015

Subsequent Events [Abstract]

Subsequent Events

SUBSEQUENT EVENTS

On February 17, 2016, we completed the sale of approximately 0.5 acres of our 4.45 acre Pinnacle Phase II development parcel, located in Scottsdale, Arizona, for $1.1 million.

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Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2015

Valuation and Qualifying Accounts [Abstract]

Schedule II - Valuation and Qualifying Accounts

	(in thousands)
	Balance at		Charged to		Deductions			Balance at
	Beginning		Costs and		from			End of
Description	of Year		Expense		Reserves			Year
Allowance for doubtful accounts:
Year ended December 31, 2015	$	4,964	$	1,974	$	(291	)	$	6,647
Year ended December 31, 2014	3,613		1,602		(251		)	4,964
Year ended December 31, 2013	2,226		1,638		(251		)	3,613

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Schedule III - Real Estate and Accumulated Depreciation

12 Months Ended

Dec. 31, 2015

SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Abstract]

Schedule III - Real Estate and Accumulated Depreciation

					Costs Capitalized Subsequent					Gross Amount at which Carried at
	Initial Cost (in thousands)				to Acquisition (in thousands)					End of Period(in thousands)(1) (2)
			Building and		Improvements			Carrying				Building and
Property Name	Land		Improvements		(net)			Costs		Land		Improvements		Total
Retail Communities:
Ahwatukee Plaza	$	5,126	$	4,086	$	322		$	—	$	5,126	$	4,408	$	9,534
Anthem Marketplace	4,790		17,973		160			—		4,790		18,133		22,923
Bellnott Square	1,154		4,638		411			—		1,154		5,049		6,203
Bissonnet Beltway	415		1,947		428			—		415		2,375		2,790
Centre South	481		1,596		590			—		481		2,186		2,667
The Citadel	472		1,777		2,595			—		472		4,372		4,844
City View Village	2,044		4,149		(12		)	—		2,044		4,137		6,181
Corporate Park Woodland II	2,758		—		5			—		2,758		5		2,763
Desert Canyon	1,976		1,704		629			—		1,976		2,333		4,309
Fountain Hills Plaza	5,113		15,340		64			—		5,113		15,404		20,517
Fountain Square	5,573		9,828		1,630			—		5,573		11,458		17,031
Fulton Ranch Towne Center	7,604		22,612		93			—		7,604		22,705		30,309
Gilbert Tuscany Village	1,767		3,233		1,441			—		1,767		4,674		6,441
Heritage Trace Plaza	6,209		13,821		30			—		6,209		13,851		20,060
Holly Knight	320		1,293		165			—		320		1,458		1,778
Headquarters Village	7,171		18,439		230			—		7,171		18,669		25,840
Keller Place	5,977		7,577		(79		)	—		5,977		7,498		13,475
Kempwood Plaza	733		1,798		764			—		733		2,562		3,295
Lion Square	1,546		4,289		3,202			—		1,546		7,491		9,037
The Marketplace at Central	1,305		5,324		1,067			—		1,305		6,391		7,696
Market Street at DC Ranch	9,710		26,779		1,687			—		9,710		28,466		38,176
Mercado at Scottsdale Ranch	8,728		12,560		495			—		8,728		13,055		21,783
Paradise Plaza	6,155		10,221		859			—		6,155		11,080		17,235
Parkside Village North	3,877		8,629		62			—		3,877		8,691		12,568
Parkside Village South	5,562		27,154		19			—		5,562		27,173		32,735
Pinnacle of Scottsdale	6,648		22,466		1,267			—		6,648		23,733		30,381
Providence	918		3,675		669			—		918		4,344		5,262
Quinlan Crossing	9,561		28,683		1			—		9,561		28,684		38,245
Shaver	184		633		(41		)	—		184		592		776
Shops at Pecos Ranch	3,781		15,123		560			—		3,781		15,683		19,464
Shops at Starwood	4,093		11,487		154			—		4,093		11,641		15,734
The Shops at Williams Trace	5,920		14,297		66			—		5,920		14,363		20,283
South Richey	778		2,584		1,929			—		778		4,513		5,291
Spoerlein Commons	2,340		7,296		530			—		2,340		7,826		10,166
The Strand at Huebner Oaks	5,805		12,335		82			—		5,805		12,417		18,222
SugarPark Plaza	1,781		7,125		512			—		1,781		7,637		9,418
Sunridge	276		1,186		331			—		276		1,517		1,793
Sunset at Pinnacle Peak	3,610		2,734		432			—		3,610		3,166		6,776
Terravita Marketplace	7,171		9,392		573			—		7,171		9,965		17,136
Torrey Square	1,981		2,971		1,208			—		1,981		4,179		6,160
Town Park	850		2,911		176			—		850		3,087		3,937
Village Square at Dana Park	10,877		40,252		2,306			—		10,877		42,558		53,435
Webster Pointe	720		1,150		197			—		720		1,347		2,067
Westchase	423		1,751		2,763			—		423		4,514		4,937
Williams Trace Plaza	6,800		14,003		30			—		6,800		14,033		20,833
Windsor Park	2,621		10,482		7,473			—		2,621		17,955		20,576
	$	173,704	$	439,303	$	38,075		$	—	$	173,704	$	477,378	$	651,082

					Costs Capitalized Subsequent				Gross Amount at which Carried at
	Initial Cost (in thousands)				to Acquisition (in thousands)				End of Period(in thousands)(1) (2)
			Building and		Improvements		Carrying				Building and
Property Name	Land		Improvements		(net)		Costs		Land		Improvements		Total
Office/Flex Communities:
Brookhill	$	186	$	788	$	375	$	—	$	186	$	1,163	$	1,349
Corporate Park Northwest	1,534		6,306		2,032		—		1,534		8,338		9,872
Corporate Park West	2,555		10,267		980		—		2,555		11,247		13,802
Corporate Park Woodland	652		5,330		653		—		652		5,983		6,635
Dairy Ashford	226		1,211		80		—		226		1,291		1,517
Holly Hall Industrial Park	608		2,516		396		—		608		2,912		3,520
Interstate 10 Warehouse	208		3,700		374		—		208		4,074		4,282
Main Park	1,328		2,721		580		—		1,328		3,301		4,629
Plaza Park	902		3,294		1,059		—		902		4,353		5,255
Westbelt Plaza	568		2,165		735		—		568		2,900		3,468
Westgate Service Center	672		2,776		693		—		672		3,469		4,141
	$	9,439	$	41,074	$	7,957	$	—	$	9,439	$	49,031	$	58,470
Office Communities:
9101 LBJ Freeway	$	1,597	$	6,078	$	1,300	$	—	$	1,597	$	7,378	$	8,975
Pima Norte	1,086		7,162		2,067		517		1,086		9,746		10,832
Uptown Tower	1,621		15,551		3,928		—		1,621		19,479		21,100
Woodlake Plaza	1,107		4,426		1,543		—		1,107		5,969		7,076
	$	5,411	$	33,217	$	8,838	$	517	$	5,411	$	42,572	$	47,983
Total Operating Portfolio	$	188,554	$	513,594	$	54,870	$	517	$	188,554	$	568,981	$	757,535
Davenport Village	$	11,367	$	34,101	$	20	$	—	$	11,367	$	34,121	$	45,488
Gilbert Tuscany Village Hard Corner	856		794		—		—		856		794		1,650
The Promenade at Fulton Ranch	5,198		13,367		124		—		5,198		13,491		18,689
Total - Development Portfolio (3)	$	17,421	$	48,262	$	144	$	—	$	17,421	$	48,406	$	65,827
Anthem Marketplace	$	204	$	—	$	—	$	—	$	204	$	—	$	204
Dana Park Development	4,000		—		7		—		4,000		7		4,007
Fountain Hills	277		—		—		—		277		—		277
Market Street at DC Ranch	704		—		—		—		704		—		704
Pinnacle Phase II	1,000		—		338		399		1,000		737		1,737
Shops at Starwood Phase III	1,818		—		3,034		395		1,818		3,429		5,247
Total - Property Held for Development	$	8,003	$	—	$	3,379	$	794	$	8,003	$	4,173	$	12,176
Grand Totals	$	213,978	$	561,856	$	58,393	$	1,311	$	213,978	$	621,560	$	835,538

		Accumulated Depreciation		Date of	Date	Depreciation
Property Name	Encumbrances	(in thousands)		Construction	Acquired	Life
Retail Communities:
Ahwatukee Plaza		$	549		8/16/2011	5-39 years
Anthem Marketplace	(4)	1,192			6/28/2013	5-39 years
Bellnott Square		1,817			1/1/2002	5-39 years
Bissonnet Beltway		1,572			1/1/1999	5-39 years
Centre South		1,071			1/1/2000	5-39 years
The Citadel		948			9/28/2010	5-39 years
City View Village		80			3/31/2015	5-39 years
Corporate Park Woodland II		5			10/17/2013	5-39 years
Desert Canyon		385			4/13/2011	5-39 years
Fountain Hills Plaza		889			10/7/2013	5-39 years
Fountain Square		1,001			9/21/2012	5-39 years
Fulton Ranch Towne Center		676			11/5/2014	5-39 years
Gilbert Tuscany Village		892			6/28/2011	5-39 years
Heritage Trace Plaza		539			7/1/2014	5-39 years
Holly Knight		974			8/1/2000	5-39 years
Headquarters Village	(5)	1,353			3/28/2013	5-39 years
Keller Place		66			8/26/2015	5-39 years
Kempwood Plaza		1,201			2/2/1999	5-39 years
Lion Square		3,186			1/1/2000	5-39 years
The Marketplace at Central		911			11/1/2010	5-39 years
Market Street at DC Ranch		1,670			12/5/2013	5-39 years
Mercado at Scottsdale Ranch	(6)	871			6/19/2013	5-39 years
Paradise Plaza	(7)	995			8/8/2012	5-39 years
Parkside Village North		111			7/2/2015	5-39 years
Parkside Village South		348			7/2/2015	5-39 years
Pinnacle of Scottsdale	(8)	2,559			12/22/2011	5-39 years
Providence		1,839			3/30/2001	5-39 years
Quinlan Crossing		245			8/26/2015	5-39 years
Shaver		295			12/17/1999	5-39 years
Shops at Pecos Ranch	(9)	1,256			12/28/2012	5-39 years
Shops at Starwood	(10)	1,237			12/28/2011	5-39 years
The Shops at Williams Trace		367			12/24/2014	5-39 years
South Richey		1,803			8/25/1999	5-39 years
Spoerlein Commons		1,503			1/16/2009	5-39 years
The Strand at Huebner Oaks		397			9/19/2014	5-39 years
SugarPark Plaza		2,284			9/8/2004	5-39 years
Sunridge		622			1/1/2002	5-39 years
Sunset at Pinnacle Peak		312			5/29/2012	5-39 years
Terravita Marketplace	(11)	1,212			8/8/2011	5-39 years
Torrey Square		2,048			1/1/2000	5-39 years
Town Park		1,704			1/1/1999	5-39 years
Village Square at Dana Park	(12)	3,535			9/21/2012	5-39 years
Webster Pointe		686			1/1/2000	5-39 years
Westchase		1,529			1/1/2002	5-39 years
Williams Trace Plaza		359			12/24/2014	5-39 years
Windsor Park		5,789			12/16/2003	5-39 years
		$	54,883

		Accumulated Depreciation		Date of	Date	Depreciation
Property Name	Encumbrances	(in thousands)		Construction	Acquired	Life
Office/Flex Communities:
Brookhill		$	454		1/1/2002	5-39 years
Corporate Park Northwest		2,907			1/1/2002	5-39 years
Corporate Park West	(13)	4,358			1/1/2002	5-39 years
Corporate Park Woodland	(13)	3,008		11/1/2000		5-39 years
Dairy Ashford	(13)	647			1/1/1999	5-39 years
Holly Hall Industrial Park	(13)	1,151			1/1/2002	5-39 years
Interstate 10 Warehouse	(13)	2,581			1/1/1999	5-39 years
Main Park	(13)	1,583			1/1/1999	5-39 years
Plaza Park	(13)	2,192			1/1/2000	5-39 years
Westbelt Plaza	(13)	1,678			1/1/1999	5-39 years
Westgate Service Center	(13)	1,386			1/1/2002	5-39 years
		$	21,945
Office Communities:
9101 LBJ Freeway		$	2,205		8/10/2005	5-39 years
Pima Norte		1,842			10/4/2007	5-39 years
Uptown Tower	(14)	6,007			11/22/2005	5-39 years
Woodlake Plaza	(15)	1,776			3/14/2005	5-39 years
		$	11,830
Total Operating Portfolio		$	88,658
Davenport Village		$	510		5/27/2015	5-39 years
Gilbert Tuscany Village Hard Corner		10			8/28/2015	5-39 years
The Promenade at Fulton Ranch		402			11/5/2014	5-39 years
Total - Development Portfolio (3)		$	922
Anthem Marketplace		$	—		6/28/2013	Land - Not Depreciated
Dana Park Development		—			9/21/2012	Land - Not Depreciated
Fountain Hills		—			10/7/2013	Land - Not Depreciated
Market Street at DC Ranch		—			12/5/2013	Land - Not Depreciated
Pinnacle Phase II		—			12/28/2011	Land - Not Depreciated
Shops at Starwood Phase III		—			12/28/2011	Land - Not Depreciated
Total - Property Held For Development		$	—
Grand Total		$	89,580

⁽¹⁾ Reconciliations of total real estate carrying value for the three years ended December 31, follows:

	( in thousands)
	2015			2014			2013
Balance at beginning of period	$	673,655		$	537,872		$	401,325
Additions during the period:
Acquisitions	150,331			132,734			130,731
Improvements	12,653			9,330			6,164
	162,984			142,064			136,895
Deductions - cost of real estate sold or retired	(1,101		)	(6,281		)	(348		)
Balance at close of period	$	835,538		$	673,655		$	537,872

⁽²⁾  The aggregate cost of real estate (in thousands) for federal income tax purposes is $807,349.

⁽³⁾  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.

⁽⁴⁾  This property secures a $15.1 million mortgage note.

⁽⁵⁾  This property secures a $19.0 million mortgage note.

⁽⁶⁾  This property secures a $11.1 million mortgage note.

⁽⁷⁾  This property secures a $9.2 million mortgage note.

⁽⁸⁾  This property secures a $14.1 million mortgage note.

⁽⁹⁾  This property secures a $14.0 million mortgage note.

⁽¹⁰⁾  This property secures a $14.3 million mortgage note.

⁽¹¹⁾  This property secures a $10.5 million mortgage note.

⁽¹²⁾  This property secures a $2.6 million mortgage note.

⁽¹³⁾  These properties secure a $37.0 million mortgage note.

⁽¹⁴⁾  This property secures a $16.5 million mortgage note.

⁽¹⁵⁾  This property secures a $6.5 million mortgage note.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Basis of Consolidation

Basis of Consolidation.  We are the sole general partner of the Operating Partnership and possess full legal control and authority over the operations of the Operating Partnership.  As of December 31, 2015, 2014 and 2013, we owned a majority of the partnership interests in the Operating Partnership.  Consequently, the accompanying consolidated financial statements include the accounts of the Operating Partnership.  All significant inter-company balances have been eliminated. Noncontrolling interest in the accompanying consolidated financial statements represents the share of equity and earnings of the Operating Partnership allocable to holders of partnership interests other than us.  Net income or loss is allocated to noncontrolling interests based on the weighted-average percentage ownership of the Operating Partnership during the year.  Issuance of additional common shares of beneficial interest in Whitestone (the “common shares”) and units of limited partnership interest in the Operating Partnership that are convertible into cash or, at our option, common shares on a one-for-one basis (the “OP units”) changes the percentage of ownership interests of both the noncontrolling interests and Whitestone.

Basis of Accounting

Basis of Accounting.  Our financial records are maintained on the accrual basis of accounting whereby revenues are recognized when earned and expenses are recorded when incurred.

Use of Estimates

Use of Estimates.   The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Significant estimates that we use include the estimated fair values of properties acquired, the estimated useful lives for depreciable and amortizable assets and costs, the estimated allowance for doubtful accounts, the estimated fair value of interest rate swaps and the estimates supporting our impairment analysis for the carrying values of our real estate assets.  Actual results could differ from those estimates.

Reclassifications

Reclassifications.  We have reclassified certain prior year amounts in the accompanying consolidated financial statements in order to be consistent with the current fiscal year presentation. These reclassifications had no effect on net income, total assets, total liabilities or equity. During 2014, we reclassified certain properties classified as discontinued operations to conform to the current year presentation. See Note 4 for additional discussion.

Restricted Cash

Restricted Cash. We classify all cash pledged as collateral to secure certain obligations and all cash whose use is limited as restricted cash. During 2015, pursuant to the terms of our $15.1 million4.99% Note, due January 6, 2024 (See Note 8), which is collateralized by our Anthem Marketplace property, we were required by the lenders thereunder to establish a cash management account controlled by the lenders to collect all amounts generated by our Anthem Marketplace property in order to collateralize such promissory note. As a result, these amounts are reported in the consolidated statements of cash flows under cash flows from financing activities.

Share-Based Compensation

Share-Based Compensation.   From time to time, we award nonvested restricted common share awards or restricted common share unit awards, which may be converted into common shares, to executive officers and employees under our 2008 Long-Term Equity Incentive Ownership Plan (the “2008 Plan”).  The vast majority of the awarded shares and units vest when certain performance conditions are met.  We recognize compensation expense when achievement of the performance conditions is probable based on management’s most recent estimates using the fair value of the shares as of the grant date.

Noncontrolling Interests

Noncontrolling Interests.  Noncontrolling interests are the portion of equity in a subsidiary not attributable to a parent.  The ownership interests not held by the parent are considered noncontrolling interests.  Accordingly, we have reported noncontrolling interests in equity on the consolidated balance sheets but separate from Whitestone’s equity.  On the consolidated statements of operations and comprehensive income, subsidiaries are reported at the consolidated amount, including both the amount attributable to Whitestone and noncontrolling interests.  Consolidated statements of changes in equity are included for both quarterly and annual financial statements, including beginning balances, activity for the period and ending balances for shareholders’ equity, noncontrolling interests and total equity.

Revenue Recognition

Revenue Recognition.  All leases on our properties are classified as operating leases, and the related rental income is recognized on a straight-line basis over the terms of the related leases.  Differences between rental income earned and amounts due per the respective lease agreements are capitalized or charged, as applicable, to accrued rents and accounts receivable.  Percentage rents are recognized as rental income when the thresholds upon which they are based have been met.  Recoveries from tenants for taxes, insurance, and other operating expenses are recognized as revenues in the period the corresponding costs are incurred.  We have established an allowance for doubtful accounts against the portion of tenant accounts receivable which is estimated to be uncollectible.

Cash and Cash Equivalents

Cash and Cash Equivalents.  We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.  Cash and cash equivalents as of December 31, 2015 and 2014 consisted of demand deposits at commercial banks and brokerage accounts.

Marketable Securities

Marketable Securities. We classify our existing marketable equity securities as available-for-sale in accordance with the Financial Accounting Standards Board's (“FASB”) Investments-Debt and Equity Securities guidance. These securities are carried at fair value with unrealized gains and losses reported in equity as a component of accumulated other comprehensive income or loss. The fair value of the marketable securities is determined using Level 1 inputs under FASB Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures.” Level 1 inputs represent quoted prices available in an active market for identical investments as of the reporting date. Gains and losses on securities sold are based on the specific identification method, and are reported as a component of interest, dividend and other investment income.

Development Properties

Development Properties.  Land, buildings and improvements are recorded at cost. Expenditures related to the development of real estate are carried at cost which includes capitalized carrying charges and development costs. Carrying charges (interest and real estate taxes) are capitalized as part of construction in progress. The capitalization of such costs ceases when the property, or any completed portion, becomes available for occupancy.

Acquired Properties and Acquired Lease Intangibles

Acquired Properties and Acquired Lease Intangibles.  We allocate the purchase price of the acquired properties to land, building and improvements, identifiable intangible assets and to the acquired liabilities based on their respective fair values at the time of purchase. Identifiable intangibles include amounts allocated to acquired out-of-market leases, the value of in-place leases and customer relationship value, if any. We determine fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends and specific market and economic conditions that may affect the property. Factors considered by management in our analysis of determining the as-if-vacant property value include an estimate of carrying costs during the expected lease-up periods considering market conditions, and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and estimates of lost rentals at market rates during the expected lease-up periods, tenant demand and other economic conditions. Management also estimates costs to execute similar leases including leasing commissions, tenant improvements, legal and other related expenses. Intangibles related to out-of-market leases and in-place lease value are recorded as acquired lease intangibles and are amortized as an adjustment to rental revenue or amortization expense, as appropriate, over the remaining terms of the underlying leases. Premiums or discounts on acquired out-of-market debt are amortized to interest expense over the remaining term of such debt.

Depreciation

Depreciation.  Depreciation is computed using the straight-line method over the estimated useful lives of 5 to 39 years for improvements and buildings, respectively.  Tenant improvements are depreciated using the straight-line method over the life of the improvement or remaining term of the lease, whichever is shorter.

Impairment

Impairment.  We review our properties for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of the assets, including accrued rental income, may not be recoverable through operations.  We determine whether an impairment in value has occurred by comparing the estimated future cash flows (undiscounted and without interest charges), including the estimated residual value of the property, with the carrying cost of the property.  If impairment is indicated, a loss will be recorded for the amount by which the carrying value of the property exceeds its fair value.  Management has determined that there has been no impairment in the carrying value of our real estate assets as of December 31, 2015.

Accrued Rents and Accounts Receivable

Accrued Rents and Accounts Receivable.  Included in accrued rent and accounts receivable are base rents, tenant reimbursements and receivables attributable to recording rents on a straight-line basis. An allowance for the uncollectible portion of accrued rents and accounts receivable is determined based upon customer credit-worthiness (including expected recovery of our claim with respect to any tenants in bankruptcy), historical bad debt levels, and current economic trends. As of December 31, 2015 and 2014, we had an allowance for uncollectible accounts of $6.6 million and $5.0 million, respectively. As of December 31, 2015, 2014 and 2013, we recorded bad debt expense in the amount of $2.0 million, $1.6 million and $1.6 million, respectively, related to tenant receivables that we specifically identified as potentially uncollectible based on our assessment of each tenant’s credit-worthiness.  Bad debt expenses and any related recoveries are included in property operation and maintenance expense.

Unamortized Lease Commissions and Loan Costs

Unamortized Lease Commissions and Loan Costs.  Leasing commissions are amortized using the straight-line method over the terms of the related lease agreements.  Loan costs are amortized on the straight-line method over the terms of the loans, which approximates the interest method.  Costs allocated to in-place leases whose terms differ from market terms related to acquired properties are amortized over the remaining life of the respective leases.

Prepaids and Other Assets, Policy

Prepaids and Other Assets.  Prepaids and other assets include escrows established pursuant to certain mortgage financing arrangements for real estate taxes and insurance and acquisition deposits which include earnest money deposits on future acquisitions.

Federal Income and State Taxes

Federal Income Taxes.  We elected to be taxed as a REIT under the Code beginning with our taxable year ended December 31, 1999.  As a REIT, we generally are not subject to federal income tax on income that we distribute to our shareholders.  If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate rates.  We believe that we are organized and operate in such a manner as to qualify to be taxed as a REIT, and we intend to operate so as to remain qualified as a REIT for federal income tax purposes.

State Taxes.  We are subject to the Texas Margin Tax, which is computed by applying the applicable tax rate (1% for us) to the profit margin, which, generally, will be determined for us as total revenue less a 30% standard deduction.  Although the Texas Margin Tax is not considered an income tax, FASB ASC 740, “Income Taxes” (“ASC 740”)applies to the Texas Margin Tax.

Fair Value of Financial Instruments

Fair Value of Financial Instruments.  Our financial instruments consist primarily of cash, cash equivalents, accounts receivable, accounts and notes payable and investments in marketable securities.  The carrying value of cash, cash equivalents, accounts receivable and accounts payable are representative of their respective fair values due to their short-term nature.  The fair value of our long-term debt, consisting of fixed rate secured notes, variable rate secured notes and an unsecured revolving credit facility aggregate to approximately $498.8 million and $394.9 million as compared to the book value of approximately $499.7 million and $394.1 million as of December 31, 2015 and 2014, respectively. The fair value of our long-term debt is estimated on a Level 2 basis (as provided by ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”)), using a discounted cash flow analysis based on the borrowing rates currently available to us for loans with similar terms and maturities, discounting the future contractual interest and principal payments.

Disclosure about fair value of financial instruments is based on pertinent information available to management as of December 31, 2015 and 2014. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since December 31, 2015 and current estimates of fair value may differ significantly from the amounts presented herein.

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities. We occasionally utilize derivative financial instruments, principally interest rate swaps, to manage our exposure to fluctuations in interest rates. We have established policies and procedures for risk assessment, and the approval, reporting and monitoring of derivative financial instruments. We recognize our interest rate swaps as cash flow hedges with the effective portion of the changes in fair value recorded in comprehensive income (loss) and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. Any ineffective portion of a cash flow hedges' change in fair value is recorded immediately into earnings. Our cash flow hedges are determined using Level 2 inputs under ASC 820. Level 2 inputs represent quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active; and model-derived valuations whose inputs are observable. As of December 31, 2015, we consider our cash flow hedges to be highly effective.

Concentration of Risk

Concentration of Risk.  Substantially all of our revenues are obtained from office, warehouse and retail locations in the Austin, Chicago, Dallas-Fort Worth, Houston, Phoenix and San Antonio metropolitan areas. We maintain cash accounts in major U.S. financial institutions. The terms of these deposits are on demand to minimize risk. The balances of these accounts sometimes exceed the federally insured limits, although no losses have been incurred in connection with these deposits.

Recent accounting pronouncements

Recent accounting pronouncements. In April 2015, the FASB issued guidance requiring that debt issuance costs related to a recognized liability be presented on the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with the presentation of debt discounts. In August 2015, the FASB issued guidance to clarify that debt issuance costs related to line-of-credit agreements may still be presented as an asset and subsequently amortized ratably over the term of such arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2015 and is to be applied retrospectively. We expect this guidance to reduce total assets and total notes payable on our consolidated balance sheets for amounts classified as deferred financing costs specific to debt issuance costs. We do not expect this guidance to have any other effect on our consolidated financial statements.

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Marketable Securities (Tables)

12 Months Ended

Dec. 31, 2015

Investments, Debt and Equity Securities [Abstract]

Schedule of Available-for-Sale Securities

Available-for-sale securities consist of the following (in thousands):

	December 31, 2015
	Amortized Cost		Gains in Accumulated Other Comprehensive Income		Losses in Accumulated Other Comprehensive Income			Estimated Fair Value
Real estate sector common stock	$	654	$	—	$	(219	)	$	435
Total available-for-sale securities	$	654	$	—	$	(219	)	$	435

	December 31, 2014
	Amortized Cost		Gains in Accumulated Other Comprehensive Income		Losses in Accumulated Other Comprehensive Income			Estimated Fair Value
Real estate sector common stock	$	1,106	$	—	$	(133	)	$	973
Total available-for-sale securities	$	1,106	$	—	$	(133	)	$	973

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Real Estate (Tables)

12 Months Ended

Dec. 31, 2015

Real Estate [Abstract]

Schedule of pro forma results of operations

The pro forma unaudited results summarized below reflect our consolidated pro forma results of operations as if our acquisitions for the years ended December 31, 2015, 2014 and 2013 were acquired on January 1, 2013 and includes no other material adjustments:

INCOME STATEMENT DATA	Year Ended December 31,
	2015		2014		2013
Operating revenue	$	100,860	$	97,353	$	96,333
Net income	$	8,773	$	15,005	$	14,517

Schedule of operating results for properties classified as discontinued operations

The operating results for properties classified as discontinued operations consists of the following (in thousands):

	Year Ended December 31,
	2015			2014		2013
Property revenues	$	51		$	1,626	$	1,653
Property expenses	41			734		832
Depreciation and amortization	—			314		329
Interest expense	—			58		175
Provision for income taxes	—			10		12
Loss (gain) on sale or disposal of assets	(1		)	—		7
Operating income from discontinued operations	11			510		298
Gain on sale of property from discontinued operations	—			1,887		—
Income from discontinued operations	$	11		$	2,397	$	298

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Accrued Rents and Accounts Receivable, Net (Tables)

12 Months Ended

Dec. 31, 2015

Receivables [Abstract]

Schedule of Accrued Rent and Accounts Receivable, Net

Accrued rents and accounts receivable, net, consists of amounts accrued, billed and due from tenants, allowance for doubtful accounts and other receivables as follows (in thousands):

	December 31,
	2015			2014
Tenant receivables	$	10,494		$	7,998
Accrued rents and other recoveries	11,619			8,800
Allowance for doubtful accounts	(6,647		)	(4,964		)
Totals	$	15,466		$	11,834

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Unamortized Lease Commissions and Loan Costs (Tables)

12 Months Ended

Dec. 31, 2015

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Unamortized Leasing Comissions and Loan Costs

Costs which have been deferred consist of the following (in thousands):

	December 31,
	2015			2014
Leasing commissions	$	7,226		$	5,936
Deferred financing cost	6,490			5,785
Total cost	13,716			11,721
Less: leasing commissions accumulated amortization	(2,960		)	(2,373		)
Less: deferred financing cost accumulated amortization	(786		)	(469		)
Total cost, net of accumulated amortization	$	9,970		$	8,879

Schedule of Expected Future Amortization of Deferred Costs

A summary of expected future amortization of deferred costs is as follows (in thousands):

Years Ended December 31,	Leasing Commissions		Deferred Financing Costs		Total
2016	$	1,220	$	1,253	$	2,473
2017	1,001		1,239		2,240
2018	728		1,126		1,854
2019	524		612		1,136
2020	379		568		947
Thereafter	414		906		1,320
Total	$	4,266	$	5,704	$	9,970

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Future Minimum Lease Income (Tables)

12 Months Ended

Dec. 31, 2015

Leases [Abstract]

Schedule of Future Minimum Rental Payments Receivable for Operating Leases

A summary of minimum future rents to be received (exclusive of renewals, tenant reimbursements, and contingent rents) under noncancelable operating leases in existence as of December 31, 2015 is as follows (in thousands): 

Years Ended December 31,	Minimum Future Rents
2016	$	71,537
2017	61,511
2018	48,913
2019	37,588
2020	27,078
Thereafter	88,948
Total	$	335,575

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Debt (Tables)

12 Months Ended

Dec. 31, 2015

Debt Disclosure [Abstract]

Schedule of Debt

Mortgages and other notes payable consist of the following (in thousands):

	December 31,
Description	2015		2014
Fixed rate notes
$10.5 million, LIBOR plus 2.00% Note, due September 24, 2018 (1)	$	10,220	$	10,460
$50.0 million, 0.84% plus 1.35% to 1.90% Note, due October 30, 2020 (2)	50,000		50,000
$50.0 million, 1.50% plus 1.35% to 1.90% Note, due January 29, 2021 (3)	50,000		50,000
$100.0 million, 1.73% plus 1.65% to 2.25% Note, due October 30, 2022 (4)	100,000		—
$37.0 million 3.76% Note, due December 1, 2020	35,146		36,090
$6.5 million 3.80% Note, due January 1, 2019	6,190		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	20,040		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% Note, due December 29, 2017 (5)	7,886		7,888
$2.6 million 5.46% Note, due October 1, 2023	2,550		2,583
$11.1 million 5.87% Note, due August 6, 2016	11,305		11,607
Floating rate notes
Unsecured line of credit, LIBOR plus 1.40% to 1.95%, due October 30, 2019	127,600		120,100
	$	499,747	$	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 Term Loan 1 (as defined below) at 0.84% through February 3, 2017 and 1.75% beginning February 3, 2017 through October 30, 2020.

⁽³⁾  Promissory note includes an interest rate swap that fixed the LIBOR portion of Term Loan 2 (as defined below) at 1.50%.

⁽⁴⁾  Promissory note includes an interest rate swap that fixed the LIBOR portion of Term Loan 3 (as defined below) at 1.73%.

⁽⁵⁾  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 Maturities of Debt

Annual maturities of notes payable as of December 31, 2015 are due during the following years:

	Amount Due
Year	(in thousands)
2016	$	13,269
2017	10,213
2018	12,136
2019	135,649
2020	82,827
Thereafter	245,653
Total	$	499,747

Schedule of Contractual Obligations

As of December 31, 2015, we had the following contractual obligations:

			Payment due by period (in thousands)
Contractual Obligations	Total		Less than 1 year (2016)		1 - 3 years (2017 - 2018)		3 - 5 years (2019 - 2020)		More than 5 years (after 2020)
Long-Term Debt - Principal	$	499,747	$	13,269	$	22,349	$	218,476	$	245,653
Long-Term Debt - Fixed Interest	80,589		13,030		24,753		23,002		19,804
Long-Term Debt - Variable Interest (1)	8,036		2,096		4,193		1,747		—
Unsecured credit facility - Unused commitment fee (2)	1,322		345		690		287		—
Operating Lease Obligations	186		74		88		21		3
Total	$	589,880	$	28,814	$	52,073	$	243,533	$	265,460

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Derivatives and Hedging Activities (Tables)

12 Months Ended

Dec. 31, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of activity and fair value of interest rate swaps

The fair value of our interest rate swaps is as follows (in thousands):

	Balance Sheet Location	Estimated Fair Value
Interest rate swaps:
December 31, 2015	Accounts payable and accrued expenses	$	617
December 31, 2014	Accounts payable and accrued expenses	$	1,016

A summary of our interest rate swap activity is as follows (in thousands):

	Amount Recognized as Comprehensive Income (Loss)			Location of Loss Recognized in Earnings	Amount of Loss Recognized in Earnings (1)
Year ended December 31, 2015	$	46		Interest expense	$	(991	)
Year ended December 31, 2014	$	(136	)	Interest expense	$	(838	)
Year ended December 31, 2013	$	173		Interest expense	$	(363	)

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Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2015

Earnings Per Share [Abstract]

Schedule of Earnings Per Share

	Year Ended
	December 31,
(in thousands, except per share data)	2015			2014			2013
Numerator:
Income from continuing operations	$	6,854		$	5,349		$	3,621
Less: Net income attributable to noncontrolling interests	(116		)	(111		)	(115		)
Distributions paid on unvested restricted shares	(528		)	(201		)	(50		)
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	6,210			5,037			3,456
Income from discontinued operations	11			2,397			298
Less: Net income attributable to noncontrolling interests	—			(49		)	(10		)
Income from discontinued operations attributable to Whitestone REIT	11			2,348			288
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	6,221		$	7,385		$	3,744
Denominator:
Weighted average number of common shares - basic	24,631			22,278			18,027
Effect of dilutive securities:
Unvested restricted shares	1,052			515			246
Weighted average number of common shares - dilutive	25,683			22,793			18,273
Earnings Per Share:
Basic:
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	$	0.25		$	0.23		$	0.19
Income from discontinued operations attributable to Whitestone REIT	0.00			0.10			0.02
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	0.25		$	0.33		$	0.21
Diluted:
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	$	0.24		$	0.22		$	0.19
Income from discontinued operations attributable to Whitestone REIT	0.00			0.10			0.01
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	0.24		$	0.32		$	0.20

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Federal Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Schedule of Characterization of Cash Dividends Distrubuted for Income Tax Purpose

For federal income tax purposes, the cash distributions to shareholders are characterized as follows for the years ended December 31: 

	2015		2014		2013
Ordinary income (unaudited)	60.9	%	53.3	%	38.5	%
Return of capital (unaudited)	37.7	%	21.3	%	61.3	%
Capital gain distributions (unaudited)	1.4	%	25.4	%	0.2	%
Total	100.0	%	100.0	%	100.0	%

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Equity (Tables)

12 Months Ended

Dec. 31, 2015

Stockholders' Equity Note [Abstract]

Schedule of Distributions

The following table reflects the total distributions we have paid (including the total amount paid and the amount paid per share) in each indicated quarter (in thousands, except per share data):

	Common Shares				Noncontrolling OP Unit Holders				Total
Quarter Paid	Distribution Per Common Share		Total Amount Paid		Distribution Per OP Unit		Total Amount Paid		Total Amount Paid
2015
Fourth Quarter	$	0.2850	$	7,666	$	0.2850	$	143	$	7,809
Third Quarter	0.2850		7,664		0.2850		122		7,786
Second Quarter	0.2850		6,601		0.2850		111		6,712
First Quarter	0.2850		6,526		0.2850		113		6,639
Total	$	1.1400	$	28,457	$	1.1400	$	489	$	28,946
2014
Fourth Quarter	$	0.2850	$	6,484	$	0.2850	$	114	$	6,598
Third Quarter	0.2850		6,457		0.2850		126		6,583
Second Quarter	0.2850		6,367		0.2850		152		6,519
First Quarter	0.2850		6,231		0.2850		158		6,389
Total	$	1.1400	$	25,539	$	1.1400	$	550	$	26,089

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Incentive Share Plan (Tables)

12 Months Ended

Dec. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-Based Incentive Plan Activity

A summary of the share-based incentive plan activity as of and for the year ended December 31, 2015 is as follows:

	Shares		Weighted-Average Grant Date Fair Value (1)
Non-vested at January 1, 2015	2,411,068		$	14.45
Granted	327,122		13.49
Modified to new agreements	—		—
Modified from existing agreements	—		—
Vested	(348,786	)	14.25
Forfeited	(101,144	)	14.45
Non-vested at December 31, 2015	2,288,260		$	14.34
Available for grant at December 31, 2015	957,084

⁽¹⁾  The fair value of the shares granted were determined based on observable market transactions occurring near the date of the grants.

Schedule of Nonvested and Vested Shares Activity

A summary of our nonvested and vested shares activity for the years ended December 31, 2015, 2014 and 2013 is presented below:

	Shares Granted			Shares Vested
Year Ended	Non-Vested Shares Issued	Weighted-Average Grant-Date Fair Value		Vested Shares		Total Vest-Date Fair Value
						(in thousands)
Year Ended December 31, 2015	327,122	$	13.49	(348,786	)	$	4,969
Year Ended December 31, 2014	2,058,930	$	14.40	(133,774	)	$	1,721
Year Ended December 31, 2013	328,005	$	15.43	(15,270	)	$	224

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Select Quarterly Financial Data (unaudited) (Tables)

12 Months Ended

Dec. 31, 2015

Quarterly Financial Information Disclosure [Abstract]

Schedule of unaudited quarterly financial information

The following is a summary of our unaudited quarterly financial information for the years ended December 31, 2015 and 2014 (in thousands, except per share data):

	First			Second			Third		Fourth
	Quarter			Quarter			Quarter		Quarter
2015
Revenues from continuing operations	$	21,252		$	21,970		$	24,599	$	25,595
Income from continuing operations	1,629			1,593			1,551		2,081
Income (loss) from discontinued operations	(8		)	(33		)	44		8
Net income attributable to Whitestone REIT	1,594			1,534			1,570		2,051
Basic Earnings per share:
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	$	0.07		$	0.06		$	0.05	$	0.07
Income from discontinued operations attributable to Whitestone REIT	0.00			0.00			0.00		0.00
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares (1)	$	0.07		$	0.06		$	0.05	$	0.07
Diluted Earnings per share:
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	$	0.06		$	0.06		$	0.05	$	0.07
Income from discontinued operations attributable to Whitestone REIT	0.00			0.00			0.00		0.00
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares (1)	$	0.06		$	0.06		$	0.05	$	0.07
2014
Revenues	$	17,376		$	17,261		$	18,540	$	19,205
Income from continuing operations	$	2,312		$	1,135		$	1,012	$	890
Income from discontinued operations	$	120		$	145		$	109	$	2,023
Net income attributable to Whitestone REIT	$	2,372		$	1,252		$	1,100	$	2,862
Basic Earnings per share:
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	$	0.10		$	0.05		$	0.04	$	0.04
Income from discontinued operations attributable to Whitestone REIT	0.01			0.00			0.01		0.08
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares (1)	$	0.11		$	0.05		$	0.05	$	0.12
Diluted Earnings per share:
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares	$	0.10		$	0.05		$	0.04	$	0.03
Income from discontinued operations attributable to Whitestone REIT	0.01			0.00			0.01		0.09
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares (1)	$	0.11		$	0.05		$	0.05	$	0.12

⁽¹⁾   The sum of individual quarterly basic and diluted earnings per share amounts may not agree with the year-to-date basic and diluted earning per share amounts as the result of each period's computation being based on the weighted average number of common shares outstanding during that period.

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Description of Business and Nature of Operations (Details)	1 Months Ended
	Jul. 31, 2004 shares	Dec. 31, 2015 CommercialProperties	Dec. 31, 2014 CommercialProperties	Dec. 31, 2013 CommercialProperties
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Reorganization and conversion, number of common shares (in shares) | shares	1.42857
Wholly Owned Properties [Member]
Real Estate Properties [Line Items]
Number of properties | CommercialProperties		70	63	60

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Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation	$ 7,337	$ 4,631	$ 2,284
Conversion ratio for class A common stock to OP unit (in shares)	1
Interest expense capitalized	$ 106	93	114
Real estate taxes capitalized	69	58	100
Allowance for doubtful accounts	(6,647)	(4,964)
Provision for doubtful accounts	1,974	1,602	1,638
Fair value of long-term debt	498,800	394,900
Book value of long-term debt	499,700	394,100
2008 Long-Term Equity Incentive Ownership Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation	$ 7,300	$ 4,700	$ 2,300

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Summary of Significant Accounting Policies - Depreciation (Details) - Building and Building Improvements [Member]	12 Months Ended
	Dec. 31, 2015
Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	5 years
Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	39 years

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Summary of Significant Accounting Policies - Prepaids and Other Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2014	Dec. 05, 2013	May. 31, 2013
Related Party Transaction [Line Items]
Stated interest rate			5.695%
Four Point Five Percent Due December 2013 [Member] | Executive Officer [Member]
Related Party Transaction [Line Items]
Note receivable, related party	$ 975
Stated interest rate	4.50%	5.20%

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Summary of Significant Accounting Policies - Taxes (Details) - TEXAS - State and Local Jurisdiction [Member] - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Income Tax Examination [Line Items]
Applicable tax rate used to determine state margin tax	1.00%
Standard deduction rate used to determine state margin tax	30.00%
Margin tax provision recognized	$ 0.4	$ 0.3	$ 0.3

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Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) $ in Millions	Dec. 31, 2015	May. 31, 2013
Debt Instrument [Line Items]
Face amount of debt		$ 14.1
Stated interest rate		5.695%
Anthem Marketplace Note [Member]
Debt Instrument [Line Items]
Face amount of debt	$ 15.1
Stated interest rate	4.99%

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Marketable Securities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 654	$ 1,106
Gains in Accumulated Other Comprehensive Income	0	0
Losses in Accumulated Other Comprehensive Income	(219)	(133)
Estimated Fair Value	435	973
Proceeds from sales of marketable securities	496	0	$ 747
Gross realized gains on sale of marketable securities	44		44
Gross realized losses on sale of marketable securities	0		$ (3)
Real estate sector common stock
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	654	1,106
Gains in Accumulated Other Comprehensive Income	0	0
Losses in Accumulated Other Comprehensive Income	(219)	(133)
Estimated Fair Value	$ 435	$ 973

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Real Estate (Details) $ in Thousands																		3 Months Ended								12 Months Ended
	Aug. 29, 2015 USD ($) ft²	Aug. 28, 2015 USD ($) ft²	Aug. 26, 2015 USD ($) ft² a parcel shares	Jul. 02, 2015 USD ($) ft²	May. 27, 2015 USD ($) ft²	Mar. 31, 2015 USD ($) ft²	Dec. 24, 2014 USD ($) ft²	Dec. 19, 2014 USD ($) a	Nov. 06, 2014 USD ($)	Sep. 19, 2014 USD ($) ft²	Jul. 01, 2014 USD ($) ft²	Dec. 05, 2013 USD ($) ft²	Oct. 17, 2013 USD ($) ft² a	Oct. 07, 2013 USD ($) ft²	Jun. 28, 2013 USD ($) ft² a	Jun. 19, 2013 USD ($) ft²	Mar. 28, 2013 USD ($) ft²	Dec. 31, 2015 USD ($) ft² CommercialProperties shares	Sep. 30, 2015 USD ($)	Jun. 30, 2015 USD ($)	Mar. 31, 2015 USD ($) ft²	Dec. 31, 2014 USD ($) property CommercialProperties	Sep. 30, 2014 USD ($)	Jun. 30, 2014 USD ($)	Mar. 31, 2014 USD ($)	Dec. 31, 2015 USD ($) ft² CommercialProperties shares	Dec. 31, 2014 USD ($) property CommercialProperties	Dec. 31, 2013 USD ($) CommercialProperties	Nov. 06, 2015 ft²	May. 31, 2013 USD ($)
Real Estate Properties [Line Items]
Payments to acquire property																										$ 147,950	$ 129,439	$ 119,102
Face amount of debt																														$ 14,100
Conversion ratio for class A common stock to OP unit (in shares) | shares																		1								1
INCOME STATEMENT DATA
Operating revenue																										$ 100,860	97,353	96,333
Net income																										8,773	15,005	14,517
Acquisition-related costs																										1,700	1,300	1,000
Gain on property dispositions																										(185)	(111)	(49)
Operating results for properties classified as discontinued operations
Operating income from discontinued operations																										11	510	298
Gain on sale of property from discontinued operations																										0	1,887	0
Income from discontinued operations																		$ 8	$ 44	$ (33)	$ (8)	$ 2,023	$ 109	$ 145	$ 120	11	$ 2,397	298
Gilbert Tuscany Village [Member]
Real Estate Properties [Line Items]
Gross leasable area (in square feet) | ft²		14,603
Payments to acquire property		$ 1,700
Revenue since date of acqusition included in results of operations																										0
Income (loss) since date of acqusition included in results of operations																										(32)
Keller Place [Member]
Real Estate Properties [Line Items]
Gross leasable area (in square feet) | ft²			93,541
Payments to acquire property			$ 12,000
Property percentage occupied			92.00%
Revenue since date of acqusition included in results of operations																										471
Income (loss) since date of acqusition included in results of operations																										$ 237
Number of undeveloped parcels | parcel			2
Area of land (in acres) | a			3.12
Issuance of OP units (in shares) | shares			120,000
Conversion ratio for class A common stock to OP unit (in shares) | shares																		1								1
Quinlan Crossing [Member]
Real Estate Properties [Line Items]
Gross leasable area (in square feet) | ft²			109,892
Payments to acquire property			$ 37,500
Property percentage occupied			95.00%
Revenue since date of acqusition included in results of operations																										$ 1,283
Income (loss) since date of acqusition included in results of operations																										555
Parkside Village North [Member]
Real Estate Properties [Line Items]
Gross leasable area (in square feet) | ft²				27,045
Payments to acquire property				$ 12,500
Property percentage occupied				100.00%
Revenue since date of acqusition included in results of operations																										596
Income (loss) since date of acqusition included in results of operations																										289
Parkside Village South [Member]
Real Estate Properties [Line Items]
Gross leasable area (in square feet) | ft²				90,101
Payments to acquire property				$ 32,500
Property percentage occupied				100.00%
Revenue since date of acqusition included in results of operations																										1,738
Income (loss) since date of acqusition included in results of operations																										844
Davenport Village [Member]
Real Estate Properties [Line Items]
Gross leasable area (in square feet) | ft²					128,934
Payments to acquire property					$ 45,500
Property percentage occupied					85.00%
Revenue since date of acqusition included in results of operations																										2,390
Income (loss) since date of acqusition included in results of operations																										967
City View Village [Member]
Real Estate Properties [Line Items]
Gross leasable area (in square feet) | ft²						17,870															17,870
Payments to acquire property						$ 6,300
Property percentage occupied						100.00%															100.00%
Revenue since date of acqusition included in results of operations																										612
Income (loss) since date of acqusition included in results of operations																										273
Village Square at Dana Park Hard Corner [Member]
Real Estate Properties [Line Items]
Gross leasable area (in square feet) | ft²							12,047
Property acquisitions, purchase price							$ 4,700
Payments to acquire property							$ 2,100
Property percentage occupied							88.00%
Face amount of debt							$ 2,600
The Shops at Williams Trace [Member]
Real Estate Properties [Line Items]
Gross leasable area (in square feet) | ft²							132,991
Payments to acquire property							$ 20,200
Property percentage occupied							87.00%
Williams Trace Plaza [Member]
Real Estate Properties [Line Items]
Gross leasable area (in square feet) | ft²							129,222
Payments to acquire property							$ 20,400
Property percentage occupied							95.00%
Fulton Ranch Towne Center Adjacent Parcel [Member]
Real Estate Properties [Line Items]
Payments to acquire property								$ 900
Area of land (in acres) | a								1.39
Fulton Ranch Towne Center [Member]
Real Estate Properties [Line Items]
Gross leasable area (in square feet) | ft²																													113,281
Payments to acquire property									$ 29,300
Property percentage occupied																													86.00%
The Promenade at Fulton Ranch [Member]
Real Estate Properties [Line Items]
Gross leasable area (in square feet) | ft²																													98,792
Payments to acquire property									$ 18,600
Property percentage occupied																													76.00%
The Strand at Huebner Oaks [Member]
Real Estate Properties [Line Items]
Gross leasable area (in square feet) | ft²										73,920
Payments to acquire property										$ 18,000
Property percentage occupied										90.00%
Heritage Trace Plaza [Member]
Real Estate Properties [Line Items]
Gross leasable area (in square feet) | ft²											70,431
Payments to acquire property											$ 20,100
Property percentage occupied											98.00%
Market Street at DC Ranch [Member]
Real Estate Properties [Line Items]
Gross leasable area (in square feet) | ft²												241,280
Payments to acquire property												$ 37,400
Property percentage occupied												80.00%
Corporate Park Woodland Parcel [Member]
Real Estate Properties [Line Items]
Gross leasable area (in square feet) | ft²													16,220
Payments to acquire property													$ 2,800
Property percentage occupied													63.00%
Area of land (in acres) | a													2.50
Fountain Hills Plaza [Member]
Real Estate Properties [Line Items]
Gross leasable area (in square feet) | ft²														111,289
Payments to acquire property														$ 20,600
Property percentage occupied														87.00%
Anthem Marketplace [Member]
Real Estate Properties [Line Items]
Gross leasable area (in square feet) | ft²															113,293
Payments to acquire property															$ 23,300
Property percentage occupied															100.00%
Area of land (in acres) | a															0.83
Mercado at Scottsdale Ranch [Member]
Real Estate Properties [Line Items]
Gross leasable area (in square feet) | ft²																118,730
Property acquisitions, purchase price																$ 21,300
Payments to acquire property																$ 9,300
Property percentage occupied																100.00%
Face amount of debt																$ 11,100
Mercado at Scottsdale Ranch [Member] | Interest Rate Supplement [Member]
Real Estate Properties [Line Items]
Face amount of debt																$ 900
Headquarters Village Shopping Center [Member]
Real Estate Properties [Line Items]
Gross leasable area (in square feet) | ft²																	89,134
Payments to acquire property																	$ 25,700
Property percentage occupied																	100.00%
Zeta, Royal Crest and Featherwood [Member]
Real Estate Properties [Line Items]
Number of properties | property																						3					3
INCOME STATEMENT DATA
Proceeds from sale of real estate																											$ 10,300
Short-term seller financing provided																		$ 2,500								2,500
Gain on property dispositions																										4,400
Gain on sale of properties recognized																										1,900
Deferred gain on sale of property																		$ 2,500								2,500
Operating results for properties classified as discontinued operations
Property revenues																										51	1,626	1,653
Property expenses																										41	734	832
Depreciation and amortization																										0	314	329
Interest expense																										0	58	175
Provision for income taxes																										0	10	12
Loss (gain) on sale or disposal of assets																										(1)	0	7
Operating income from discontinued operations																										11	510	298
Gain on sale of property from discontinued operations																										0	1,887	0
Income from discontinued operations																										$ 11	$ 2,397	$ 298
Corporate Park Northwest [Member] | Fire [Member]
Real Estate Properties [Line Items]
Gross leasable area (in square feet) | ft²	11,268
Involuntary conversion
Loss from catastrophes	$ 447
Demolition costs	55
Insurance recoveries	569
Corporate Park Northwest [Member] | Fire [Member] | Loss on Sale or Disposal of Asset [Member]
Involuntary conversion
Gain on business interruption insurance recovery	$ 67
Wholly Owned Properties [Member]
Real Estate Properties [Line Items]
Number of properties | CommercialProperties																		70				63				70	63	60
Gross leasable area (in square feet) | ft²																		6,000,000								6,000,000

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Accrued Rents and Accounts Receivable, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Receivables [Abstract]
Tenant receivables	$ 10,494	$ 7,998
Accrued rents and other recoveries	11,619	8,800
Allowance for doubtful accounts	(6,647)	(4,964)
Totals	$ 15,466	$ 11,834

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Unamortized Lease Commissions and Loan Costs (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Leasing commissions	$ 7,226	$ 5,936
Deferred financing cost	6,490	5,785
Total cost	13,716	11,721
Less: leasing commissions accumulated amortization	(2,960)	(2,373)
Less: deferred financing cost accumulated amortization	(786)	(469)
Total cost, net of accumulated amortization	$ 9,970	$ 8,879

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Unamortized Lease Commissions and Loan Costs (Details 2) $ in Thousands	Dec. 31, 2014 USD ($)
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Expected Amortization of Deferred Leasing Commissions Year 2016	$ 1,220
Expected Amortization of Deferred Leasing Commissions Year 2017	1,001
Expected Amortization of Deferred Leasing Commissions Year 2018	728
Expected Amortization of Deferred Leasing Commissions Year 2019	524
Expected Amortization of Deferred Leasing Commissions Year 2020	379
Expected Amortization of Deferred Leasing Commissions Thereafter	414
Expected Amortization of Deferred Leasing Commissions	4,266
Expected Amortization of Deferred Financing Costs Year 2016	1,253
Expected Amortization of Deferred Financing Costs Year 2017	1,239
Expected Amortization of Deferred Financing Costs Year 2018	1,126
Expected Amortization of Deferred Financing Costs Year 2019	612
Expected Amortization of Deferred Financing Costs Year 2020	568
Expected Amortization of Deferred Financing Costs Thereafter	906
Expected Amortization of Deferred Financing Costs	5,704
Expected Amortization of Deferred Costs Year 2016	2,473
Expected Amortization of Deferred Costs Year 2017	2,240
Expected Amortization of Deferred Costs Year 2018	1,854
Expected Amortization of Deferred Costs Year 2019	1,136
Expected Amortization of Deferred Costs Year 2020	947
Expected Amortization of Deferred Costs Thereafter	1,320
Expected Amortization of Deferred Costs	$ 9,970

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Future Minimum Lease Income (Details) $ in Thousands	Dec. 31, 2014 USD ($)
Leases [Abstract]
2016	$ 71,537
2017	61,511
2018	48,913
2019	37,588
2020	27,078
Thereafter	88,948
Total	$ 335,575

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Debt (Schedule of Debt) (Details) - USD ($) $ in Thousands		12 Months Ended
	Nov. 07, 2014	Dec. 31, 2015	Dec. 31, 2014	Feb. 03, 2017	May. 31, 2013	Aug. 08, 2012
Debt Instrument [Line Items]
Notes payable		$ 499,747	$ 394,093
Face amount of debt					$ 14,100
Stated interest rate					5.695%
Fixed Rate Notes [Member] | $10.5 million, LIBOR plus 2.00% Note, due September 24, 2018 | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Notes payable		10,220	10,460
Face amount of debt		$ 10,500	$ 10,500
Basis spread on variable rate		2.00%	2.00%
Fixed Rate Notes [Member] | $50.0 million, 0.84% plus 1.35% to 1.90% Note, due October 30, 2020
Debt Instrument [Line Items]
Notes payable		$ 50,000	$ 50,000
Face amount of debt		$ 50,000	$ 50,000
Imputed interest rate		0.84%	0.84%
Fixed Rate Notes [Member] | $50.0 million, 0.84% plus 1.35% to 1.90% Note, due October 30, 2020 | Minimum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate		1.35%	1.35%
Fixed Rate Notes [Member] | $50.0 million, 0.84% plus 1.35% to 1.90% Note, due October 30, 2020 | Maximum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate		1.90%	1.90%
Fixed Rate Notes [Member] | $50.0 million, 1.50% plus 1.35% to 1.90% Note, due January 29, 2021
Debt Instrument [Line Items]
Notes payable		$ 50,000	$ 50,000
Face amount of debt		$ 50,000	$ 50,000
Imputed interest rate		1.50%	1.50%
Fixed Rate Notes [Member] | $50.0 million, 1.50% plus 1.35% to 1.90% Note, due January 29, 2021 | Minimum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate		1.35%	1.35%
Fixed Rate Notes [Member] | $50.0 million, 1.50% plus 1.35% to 1.90% Note, due January 29, 2021 | Maximum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate		1.90%	1.90%
Fixed Rate Notes [Member] | $100.0 million, 1.73% plus 1.65% to 2.25% Note, due October 30, 2022
Debt Instrument [Line Items]
Notes payable		$ 100,000	$ 0
Face amount of debt		$ 100,000	$ 100,000
Imputed interest rate		1.73%	1.73%
Fixed Rate Notes [Member] | $100.0 million, 1.73% plus 1.65% to 2.25% Note, due October 30, 2022 | Minimum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate		1.65%	1.65%
Fixed Rate Notes [Member] | $100.0 million, 1.73% plus 1.65% to 2.25% Note, due October 30, 2022 | Maximum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate		2.25%	2.25%
Fixed Rate Notes [Member] | $37.0 million 3.76% Note, due December 1, 2020
Debt Instrument [Line Items]
Notes payable		$ 35,146	$ 36,090
Face amount of debt		$ 37,000	$ 37,000
Stated interest rate		3.76%	3.76%
Fixed Rate Notes [Member] | $6.5 million 3.80% Note, due January 1, 2019
Debt Instrument [Line Items]
Notes payable		$ 6,190	$ 6,355
Face amount of debt		$ 6,500	$ 6,500
Stated interest rate		3.80%	3.80%
Fixed Rate Notes [Member] | $19.0 million 4.15% Note, due December 1, 2024
Debt Instrument [Line Items]
Notes payable		$ 19,000	$ 19,000
Face amount of debt		$ 19,000	$ 19,000
Stated interest rate		4.15%	4.15%
Fixed Rate Notes [Member] | $20.2 million 4.28% Note, due June 6, 2023
Debt Instrument [Line Items]
Notes payable		$ 20,040	$ 20,200
Face amount of debt		$ 20,200	$ 20,200
Stated interest rate		4.28%	4.28%
Fixed Rate Notes [Member] | $14.0 million 4.34% Note, due September 11, 2024
Debt Instrument [Line Items]
Notes payable		$ 14,000	$ 14,000
Face amount of debt		$ 14,000	$ 14,000
Stated interest rate		4.34%	4.34%
Fixed Rate Notes [Member] | $14.3 million 4.34% Note, due September 11, 2024
Debt Instrument [Line Items]
Notes payable		$ 14,300	$ 14,300
Face amount of debt		$ 14,300	$ 14,300
Stated interest rate		4.34%	4.34%
Fixed Rate Notes [Member] | $16.5 million 4.97% Note, due September 26, 2023
Debt Instrument [Line Items]
Notes payable		$ 16,450	$ 16,450
Face amount of debt		$ 16,500	$ 16,500
Stated interest rate		4.97%	4.97%
Fixed Rate Notes [Member] | $15.1 million 4.99% Note, due January 6, 2024
Debt Instrument [Line Items]
Notes payable		$ 15,060	$ 15,060
Face amount of debt		$ 15,100	$ 15,100
Stated interest rate		4.99%	4.99%
Fixed Rate Notes [Member] | $9.2 million, Prime Rate less 2.00%, due December 29, 2017
Debt Instrument [Line Items]
Debt discount						$ 1,300
Imputed interest rate						4.13%
Fixed Rate Notes [Member] | $9.2 million, Prime Rate less 2.00%, due December 29, 2017 | Prime Rate [Member]
Debt Instrument [Line Items]
Notes payable		$ 7,886	$ 7,888
Face amount of debt		$ 9,200	$ 9,200
Basis spread on variable rate		2.00%	2.00%
Fixed Rate Notes [Member] | $2.6 million 5.46% Note, due October 1, 2023
Debt Instrument [Line Items]
Notes payable		$ 2,550	$ 2,583
Face amount of debt		$ 2,600	$ 2,600
Stated interest rate		5.46%	5.46%
Fixed Rate Notes [Member] | $11.1 million 5.87% Note, due August 6, 2016
Debt Instrument [Line Items]
Notes payable		$ 11,305	$ 11,607
Face amount of debt		$ 11,100	$ 11,100
Stated interest rate		5.87%	5.87%
Floating Rate Notes [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate		1.35%
Floating Rate Notes [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate		1.95%
Floating Rate Notes [Member] | Unsecured line of credit, LIBOR plus 1.40% to 1.95%, due October 30, 2019 | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Notes payable		$ 127,600	$ 120,100
Floating Rate Notes [Member] | Unsecured line of credit, LIBOR plus 1.40% to 1.95%, due October 30, 2019 | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate		1.40%	1.40%
Floating Rate Notes [Member] | Unsecured line of credit, LIBOR plus 1.40% to 1.95%, due October 30, 2019 | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate		1.95%	1.95%
Interest Rate Swap [Member] | $10.5 million, LIBOR plus 2.00% Note, due September 24, 2018
Debt Instrument [Line Items]
Stated interest rate		3.55%
Interest Rate Swap [Member] | $50.0 million, 0.84% plus 1.35% to 1.90% Note, due October 30, 2020
Debt Instrument [Line Items]
Stated interest rate		0.84%
Interest Rate Swap [Member] | $50.0 million, 1.50% plus 1.35% to 1.90% Note, due January 29, 2021
Debt Instrument [Line Items]
Stated interest rate		1.50%
Interest Rate Swap [Member] | $100.0 million, 1.73% plus 1.65% to 2.25% Note, due October 30, 2022
Debt Instrument [Line Items]
Stated interest rate		1.73%
Interest Rate Swap [Member] | $9.2 million, Prime Rate less 2.00%, due December 29, 2017
Debt Instrument [Line Items]
Stated interest rate		5.72%
Term Loan [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	1.35%
Term Loan [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	2.25%
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	1.00%
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	1.40%
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	1.95%
Scenario, Forecast [Member] | Interest Rate Swap [Member] | $50.0 million, 0.84% plus 1.35% to 1.90% Note, due October 30, 2020
Debt Instrument [Line Items]
Stated interest rate				1.75%

XML

Debt (Narrative) (Details)					12 Months Ended
	Nov. 07, 2014 USD ($)	Nov. 26, 2013 USD ($)	Sep. 24, 2013 USD ($)	Jun. 19, 2013 USD ($)	Dec. 31, 2015 USD ($) property CollateralizedProperties loan	Dec. 31, 2014 USD ($) CollateralizedProperties	Dec. 24, 2014 USD ($)	Nov. 26, 2014 USD ($)	Sep. 03, 2014 USD ($)	Aug. 26, 2014 USD ($)	Dec. 23, 2013 USD ($)	Dec. 16, 2013 USD ($)	Sep. 26, 2013 USD ($)	May. 31, 2013 USD ($)
Debt Instrument [Line Items]
Long-term Debt					$ 499,700,000	$ 394,100,000
Notes payable					$ 499,747,000	$ 394,093,000
Stated interest rate														5.695%
Number of collateralized properties | CollateralizedProperties					20	20
Carrying value of collateralized properties					$ 213,900,000	$ 216,900,000
Face amount of debt														$ 14,100,000
Minimum [Member]
Debt Instrument [Line Items]
Credit facility, commitment fee					0.20%
Credit facility, usage					50.00%
Maximum [Member]
Debt Instrument [Line Items]
Credit facility, commitment fee					0.25%
Credit facility, usage					50.00%
Floating Rate Loan [Member]
Debt Instrument [Line Items]
Extinguishment of debt		$ 26,900,000
Fixed Rate Indebtedness [Member]
Debt Instrument [Line Items]
Extinguishment of debt		$ 10,100,000
Mercado at Scottsdale Ranch [Member]
Debt Instrument [Line Items]
Stated interest rate				5.87%
Other liabilities assumed				$ 932,000
Face amount of debt				$ 11,100,000
Imputed interest rate				3.052%
Village Square at Dana Park Note [Member]
Debt Instrument [Line Items]
Stated interest rate							5.46%
Face amount of debt							$ 2,600,000
Headquarters Note [Member]
Debt Instrument [Line Items]
Stated interest rate								4.15%
Face amount of debt								$ 19,000,000
Pecos Note [Member]
Debt Instrument [Line Items]
Stated interest rate									4.34%
Face amount of debt									$ 14,000,000
Starwood Note [Member]
Debt Instrument [Line Items]
Stated interest rate										4.34%
Face amount of debt										$ 14,300,000
Woodlake Note [Member]
Debt Instrument [Line Items]
Stated interest rate											3.80%
Face amount of debt											$ 6,500,000
Anthem Note [Member]
Debt Instrument [Line Items]
Stated interest rate												4.99%
Face amount of debt												$ 15,100,000
Industrial Note [Member]
Debt Instrument [Line Items]
Stated interest rate													3.76%
Number of collateralized properties | property					9
Face amount of debt													$ 37,000,000
Uptown Note [Member]
Debt Instrument [Line Items]
Stated interest rate													4.97%
Face amount of debt													$ 16,500,000
Terravita Note [Member]
Debt Instrument [Line Items]
Face amount of debt			$ 10,500,000
Terravita Note [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Basis spread on variable rate			2.00%
Pinnacle Note [Member]
Debt Instrument [Line Items]
Stated interest rate														4.2805%
Face amount of debt														$ 20,200,000
Floating Rate Notes [Member]
Debt Instrument [Line Items]
Long-term Debt					$ 127,600,000
Number of loans (in loans) | loan					1
Floating Rate Notes [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate					1.35%
Floating Rate Notes [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate					1.95%
Floating Rate Notes [Member] | one-month LIBOR [Member]
Debt Instrument [Line Items]
Basis spread on variable rate					0.243%
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	$ 300,000,000
Credit facility, amount outstanding					$ 327,600,000
Credit facility, remaining borrowing capacity					172,400,000
Credit facility, increased borrowing capacity					$ 700,000,000
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	1.00%
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	1.40%
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	1.95%
Term Loan [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	1.35%
Term Loan [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	2.25%
Term Loan [Member] | Term Loan 3 [Member]
Debt Instrument [Line Items]
Face amount of debt	$ 100,000,000
Term Loan [Member] | Term Loan 1 [Member]
Debt Instrument [Line Items]
Face amount of debt	50,000,000
Term Loan [Member] | Term Loan 2 [Member]
Debt Instrument [Line Items]
Face amount of debt	$ 50,000,000

XML

Debt (Schedule of Maturities of Debt) (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Debt Disclosure [Abstract]
2016	$ 13,269
2017	10,213
2018	12,136
2019	135,649
2020	82,827
Thereafter	245,653
Long-Term Debt - Principal, Total	$ 499,747	$ 394,093

XML

Debt (Contractual Obligations) (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Debt Disclosure [Abstract]
Long-Term Debt - Principal, Total	$ 499,747	$ 394,093
Long-Term Debt - Principal, Less than 1 year (2016)	13,269
Long-Term Debt - Principal, 1 - 3 years (2017 - 2018)	22,349
Long-Term Debt - Principal, 3 - 5 years (2019 - 2020)	218,476
Long-Term Debt - Principal, More than 5 years (after 2020)	245,653
Long-Term Debt - Fixed Interest, Total	80,589
Long-Term Debt - Fixed Interest, Less than 1 year (2016)	13,030
Long-Term Debt - Fixed Interest, 1 - 3 years (2017 - 2018)	24,753
Long-Term Debt - Fixed Interest, 3 - 5 years (2018 - 2020)	23,002
Long-Term Debt - Fixed Interest, More than 5 years (after 2020)	19,804
Long-Term Debt - Variable Interest, Total	8,036
Long-Term Debt - Variable Interest, Less than 1 year (2016)	2,096
Long-Term Debt - Variable Interest, 1 - 3 years (2017 - 2018)	4,193
Long-Term Debt - Variable Interest, 3 - 5 years (2019 - 2020)	1,747
Long-Term Debt - Variable Interest, More than 5 years (after 2020)	0
Unsecured revolving credit facility - Unused commitment fee, Total	1,322
Unsecured revolving credit facility - Unused commitment fee, Less than 1 year (2016)	345
Unsecured revolving credit facility - Unused commitment fee, 1 - 3 years (2017 - 2018)	690
Unsecured revolving credit facility - Unused commitment fee, 3 - 5 years (2019 - 2020)	287
Unsecured revolving credit facility - Unused commitment fee, More than 5 years (after 2019)	0
Operating Lease Obligations, Total	186
Operating Lease Obligations, Less than 1 year (2016)	74
Operating Lease Obligations, 1 - 3 years (2017 - 2018)	88
Operating Lease Obligations, 3 - 5 years (2019 - 2020)	21
Operating Lease Obligations, More than 5 years (after 2020)	3
Contractual Obligations, Total	589,880
Contractual Obligations, Less than 1 year (2016)	28,814
Contractual Obligations, 1 - 3 years (2017 - 2018)	52,073
Contractual Obligations, 3 - 5 years (2019 - 2020)	243,533
Contractual Obligations, More than 5 years (after 2020)	$ 265,460

XML

Derivatives and Hedging Activities (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Nov. 19, 2015	Nov. 01, 2013	Mar. 08, 2013
Interest Rate Swaps [Member] | Interest Expense [Member]
Derivative [Line Items]
Amount Recognized as Comprehensive Income (Loss)		$ 46	$ (136)	$ 173
Amount of Gain (Loss) Recognized in Earnings		(991)	(838)	$ (363)
Interest Rate Swaps [Member] | Accounts Payable and Accrued Expenses [Member]
Derivative [Line Items]
Estimated Fair Value	$ 617	$ 617	$ 1,016
Term Loan 3 [Member] | Interest Rate Swaps [Member] | Cash Flow Hedging [Member]
Derivative [Line Items]
Fixed interest rate					1.725%
Term Loan 3 [Member] | U.S. Bank National Association [Member]
Derivative [Line Items]
Swap amount assigned to counterparty	35,000
Term Loan 3 [Member] | SunTrust Bank [Member]
Derivative [Line Items]
Swap amount assigned to counterparty	15,000
Term Loan 1 [Member]
Derivative [Line Items]
Swap amount assigned to counterparty	14,000
Term Loan 1 [Member] | Interest Rate Swaps [Member] | Cash Flow Hedging [Member]
Derivative [Line Items]
Fixed interest rate					1.75%		0.84%
Term Loan 1 [Member] | U.S. Bank National Association [Member]
Derivative [Line Items]
Swap amount assigned to counterparty	6,500
Term Loan 1 [Member] | Wells Fargo Bank, National Association [Member]
Derivative [Line Items]
Swap amount assigned to counterparty	14,000
Term Loan 1 [Member] | SunTrust Bank [Member]
Derivative [Line Items]
Swap amount assigned to counterparty	5,000
Term Loan 1 [Member] | Regions Bank [Member]
Derivative [Line Items]
Swap amount assigned to counterparty	3,800
Term Loan 2 [Member] | Interest Rate Swaps [Member] | Cash Flow Hedging [Member]
Derivative [Line Items]
Fixed interest rate					1.502%
Term Loan 2 [Member] | U.S. Bank National Association [Member]
Derivative [Line Items]
Swap amount assigned to counterparty	6,500
Term Loan 2 [Member] | Wells Fargo Bank, National Association [Member]
Derivative [Line Items]
Swap amount assigned to counterparty	14,000
Term Loan 2 [Member] | Bank of American, N.A. [Member]
Derivative [Line Items]
Swap amount assigned to counterparty	14,000
Term Loan 2 [Member] | SunTrust Bank [Member]
Derivative [Line Items]
Swap amount assigned to counterparty	5,000
Term Loan 2 [Member] | Regions Bank [Member]
Derivative [Line Items]
Swap amount assigned to counterparty	$ 3,800
Terravita Note [Member] | Interest Rate Swaps [Member] | Cash Flow Hedging [Member]
Derivative [Line Items]
Fixed interest rate						1.5475%

XML

Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Numerator:
Income from continuing operations	$ 2,081	$ 1,551	$ 1,593	$ 1,629	$ 890	$ 1,012	$ 1,135	$ 2,312	$ 6,854	$ 5,349	$ 3,621
Less: Net income attributable to noncontrolling interests									(116)	(111)	(115)
Distributions paid on unvested restricted shares									(528)	(201)	(50)
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares									6,210	5,037	3,456
Income from discontinued operations	$ 8	$ 44	$ (33)	$ (8)	$ 2,023	$ 109	$ 145	$ 120	11	2,397	298
Less: Net income attributable to noncontrolling interests									0	(49)	(10)
Income from discontinued operations attributable to Whitestone REIT									11	2,348	288
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares									$ 6,221	$ 7,385	$ 3,744
Denominator:
Weighted average number of common shares - basic									24,631,000	22,278,000	18,027,000
Effect of dilutive securities:
Unvested restricted shares									1,052,000	515,000	246,000
Weighted average number of common shares - dilutive									25,683,000	22,793,000	18,273,000
Basic:
Income (loss) from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares (in dollars per share)	$ 0.07	$ 0.05	$ 0.06	$ 0.07	$ 0.04	$ 0.04	$ 0.05	$ 0.10	$ 0.25	$ 0.23	$ 0.19
Income from discontinued operations attributable to Whitestone REIT (in dollars per share)	0.00	0.00	0.00	0.00	0.08	0.01	0.00	0.01	0.00	0.10	0.02
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares (in dollars per share)	0.07	0.05	0.06	0.07	0.12	0.05	0.05	0.11	0.25	0.33	0.21
Diluted:
Income (loss) from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares (in dollars per share)	0.07	0.05	0.06	0.06	0.03	0.04	0.05	0.10	0.24	0.22	0.19
Income from discontinued operations attributable to Whitestone REIT (in dollars per share)	0.00	0.00	0.00	0.00	0.09	0.01	0.00	0.01	0.00	0.10	0.01
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares (in dollars per share)	$ 0.07	$ 0.05	$ 0.06	$ 0.06	$ 0.12	$ 0.05	$ 0.05	$ 0.11	$ 0.24	$ 0.32	$ 0.20
OP Units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
OP units excluded from diluted earnings per share because their effect would be anti-dilutive (in shares)									429,809	471,310	595,782
Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Distributions to holders of certain restricted common shares									$ 564	$ 272	$ 177
Distributions to holders of certain restricted common shares charged against earnings									$ 36	$ 71	$ 127

XML

Federal Income Taxes (Details)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Income Tax Disclosure [Abstract]
Ordinary income (unaudited)	60.90%	53.30%	38.50%
Return of capital (unaudited)	37.70%	21.30%	61.30%
Capital gain distributions (unaudited)	1.40%	25.40%	0.20%
Total	100.00%	100.00%	100.00%

XML

Related Party Transactions (Details) - USD ($)	Dec. 21, 2012	Jul. 09, 2010	Dec. 31, 2014	Dec. 05, 2013	May. 31, 2013
Related Party Transaction [Line Items]
Stated interest rate					5.695%
Related party receivable			$ 652,000
Executive Officer [Member]
Related Party Transaction [Line Items]
Sale of residence, shortfall threshold		$ 2,450,000
Term of payment of housing expenses		1 year
Sale of residence, amount	$ 1,125,000
Shortfall paid in cash	1,325,000
Expenses paid in cash	852,000
Involuntary conversion	$ 2,177,000
Four Point Five Percent Due December 2013 [Member] | Executive Officer [Member]
Related Party Transaction [Line Items]
Note receivable, related party			$ 975,000
Stated interest rate			4.50%	5.20%

XML

Equity (Details) $ / shares in Units, $ in Thousands			3 Months Ended								12 Months Ended
	Jun. 26, 2015 USD ($) $ / shares shares	Oct. 08, 2013 USD ($) $ / shares shares	Dec. 31, 2015 USD ($) $ / shares shares	Sep. 30, 2015 USD ($) $ / shares	Jun. 30, 2015 USD ($) $ / shares	Mar. 31, 2015 USD ($) $ / shares	Dec. 31, 2014 USD ($) $ / shares shares	Sep. 30, 2014 USD ($) $ / shares	Jun. 30, 2014 USD ($) $ / shares	Mar. 31, 2014 USD ($) $ / shares	Dec. 31, 2015 USD ($) $ / shares shares	Dec. 31, 2014 USD ($) $ / shares shares	Dec. 31, 2013 USD ($)	Jun. 04, 2015 USD ($) agreement	Jun. 19, 2013 USD ($) agreement
Class of Stock [Line Items]
Common shares, authorized (in shares) | shares			400,000,000				400,000,000				400,000,000	400,000,000
Common shares, par value per share (in dollars per share) | $ / shares	$ 0.001	$ 0.001	$ 0.001				$ 0.001				$ 0.001	$ 0.001
Preferred shares, shares authorized (in shares) | shares			50,000,000				50,000,000				50,000,000	50,000,000
Preferred shares, par value per share (in dollars per share) | $ / shares			$ 0.001				$ 0.001				$ 0.001	$ 0.001
Common shares, issued (in shares) | shares	3,750,000	4,000,000	26,991,493				22,835,695				26,991,493	22,835,695
Amount authorized | $														$ 50,000	$ 50,000
Share price of equity offering (in dollars per share) | $ / shares	$ 13.3386	$ 13.54
Proceeds from issuance of common shares, net of offering costs | $	$ 49,700	$ 59,700									$ 49,649	$ 6,458	$ 63,887
Ownership interest in operating partnership											98.20%
Conversion ratio for class A common stock to OP unit (in shares) | shares			1								1
Weighted-average share ownership in operating partnership											98.30%	97.90%	96.80%
Number of equity distribution agreements | agreement														9	5
Payments of exchange offer costs | $											$ 0	$ 136	$ 40
OP Units [Member]
Class of Stock [Line Items]
OP units outstanding (in shares) | shares			27,367,704				22,926,599				27,367,704	22,926,599
Conversion of stock, shares converted (in shares) | shares											21,359	163,700
OP units owned (in shares) | shares			26,870,671				22,528,207				26,870,671	22,528,207
Cash Distribution [Member]
Class of Stock [Line Items]
Total Amount Paid | $			$ 7,809	$ 7,786	$ 6,712	$ 6,639	$ 6,598	$ 6,583	$ 6,519	$ 6,389	$ 28,946	$ 26,089
Cash Distribution [Member] | Common Stock [Member]
Class of Stock [Line Items]
Distribution Per Common Share (in dollars per share) | $ / shares			$ 0.2850	$ 0.2850	$ 0.2850	$ 0.2850	$ 0.2850	$ 0.2850	$ 0.2850	$ 0.2850	$ 1.1400	$ 1.1400
Total Amount Paid | $			$ 7,666	$ 7,664	$ 6,601	$ 6,526	$ 6,484	$ 6,457	$ 6,367	$ 6,231	$ 28,457	$ 25,539
Cash Distribution [Member] | OP Units [Member]
Class of Stock [Line Items]
Distribution Per Common Share (in dollars per share) | $ / shares			$ 0.2850	$ 0.2850	$ 0.2850	$ 0.2850	$ 0.2850	$ 0.2850	$ 0.2850	$ 0.2850	$ 1.1400	$ 1.1400
Total Amount Paid | $			$ 143	$ 122	$ 111	$ 113	$ 114	$ 126	$ 152	$ 158	$ 489	$ 550
Portion Attributable to Over-Allotment Option [Member]
Class of Stock [Line Items]
Common shares, issued (in shares) | shares		600,000
ATM Program [Member]
Class of Stock [Line Items]
Offering costs | $												$ 100	$ 200
ATM Program [Member] | Common Stock [Member]
Class of Stock [Line Items]
Common shares sold | shares											456,090	282,239
Proceeds from issuance | $											$ 6,400	$ 4,200
Payments of exchange offer costs | $											$ 100

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Incentive Share Plan (Narrative) (Details) $ in Thousands		12 Months Ended
	Apr. 02, 2014 employee shares	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 22, 2010
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation		$ 7,337	$ 4,631	$ 2,284
2008 Long-Term Equity Incentive Ownership Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of maximum number of shares issued under plan to aggregate shares (as a percent)					12.50%
Share-based compensation		7,300	$ 4,700	$ 2,300
Unrecognized compensation cost		$ 13,300
Period from recognition		25 months
2008 Long-Term Equity Incentive Ownership Plan [Member] | Time-Based Vesting [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	1 year
2008 Long-Term Equity Incentive Ownership Plan [Member] | Time-Based Vesting [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	2 years
2008 Long-Term Equity Incentive Ownership Plan [Member] | Restricted Common Shares and Restricted Share Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Other than options vesting percentage		82.00%
2008 Long-Term Equity Incentive Ownership Plan [Member] | Restricted Common Shares and Restricted Share Units [Member] | Time and Performance-Based Vesting [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-option equity instruments granted (in shares) | shares	633,704
Number of employees granted an award | employee	51
2008 Long-Term Equity Incentive Ownership Plan [Member] | Restricted Common Shares and Restricted Share Units [Member] | Performance Vesting [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-option equity instruments granted (in shares) | shares	2,049,116
2008 Long-Term Equity Incentive Ownership Plan [Member] | Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period		39 months
Unrecognized compensation cost		$ 9,900
2008 Long-Term Equity Incentive Ownership Plan [Member] | Non-Vested Time Based Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost		$ 3,400
Period from recognition		15 years

XML

Incentive Share Plan (Schedule of Share-Based Incentive Plan Activity) (Details) - 2008 Long-Term Equity Incentive Ownership Plan [Member] - $ / shares	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Shares, Non-vested (in shares)	2,411,068
Shares, Granted (in shares)	327,122	2,058,930	328,005
Modified to new agreements (in shares)	0
Modified from existing agreements (in shares)	0
Shares, Vested (in shares)	(348,786)	(133,774)	(15,270)
Shares, Forfeited (in shares)	(101,144)
Shares, Non-vested (in shares)	2,288,260	2,411,068
Shares, Available for grant (in shares)	957,084
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Weighted-Average Grant Date Fair Value, Non-vested (in dollars per share)	$ 14.45
Weighted-Average Grant Date Fair Value, Granted (in dollars per share)	13.49	$ 14.40	$ 15.43
Modified to new agreements (in dollars per share)	0.00
Modified from existing agreements (in dollars per share)	0.00
Weighted-Average Grant Date Fair Value, Vested (in dollars per share)	14.25
Weighted-Average Grant Date Fair Value, Forfeited (in dollars per share)	14.45
Weighted-Average Grant Date Fair Value, Non-vested (in dollars per share)	$ 14.34	$ 14.45

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Incentive Share Plan (Schedule of Nonvested and Vested Shares Activity) (Details) - 2008 Long-Term Equity Incentive Ownership Plan [Member] - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Shares, Granted, Non-Vested Shares Isused (in shares)	327,122	2,058,930	328,005
Shares, Vested (in shares)	348,786	133,774	15,270
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Shares Granted, Weighted-Average Grant Date Fair Value, Granted (in dollars per share)	$ 13.49	$ 14.40	$ 15.43
Shares Vested, Total Vest-Date Fair Value	$ 4,969	$ 1,721	$ 224

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Grants to Trustees (Details)	Dec. 21, 2015 trustee $ / shares shares	Dec. 09, 2014 trustee $ / shares shares	Oct. 24, 2014 trustee $ / shares shares
Individual Trustee Grant Agreements [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of independent trustees | trustee		2	4
Number of trustee emeritus | trustee			1
Individual Trustee Grant Agreements [Member] | Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock granted to trustees (in shares) | shares		2,314	7,500
Stock granted to trustees, vested in period (in shares) | shares			1,500
Stock granted to trustees, weighted-average grant date fair value (in dollars per share) | $ / shares		$ 14.69	$ 14.53
Individual Trustee Grant Agreements 1 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of independent trustees | trustee	4
Number of trustee emeritus | trustee	1
Individual Trustee Grant Agreements 1 [Member] | Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock granted to trustees (in shares) | shares	7,500
Stock granted to trustees, vested in period (in shares) | shares	1,500
Stock granted to trustees, weighted-average grant date fair value (in dollars per share) | $ / shares	$ 12.10
Individual Trustee Grant Agreements 2 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of independent trustees | trustee	1
Individual Trustee Grant Agreements 2 [Member] | Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock granted to trustees (in shares) | shares	992
Stock granted to trustees, weighted-average grant date fair value (in dollars per share) | $ / shares	$ 12.10

XML

Select Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Quarterly Financial Information Disclosure [Abstract]
Revenues from continuing operations	$ 25,595	$ 24,599	$ 21,970	$ 21,252	$ 19,205	$ 18,540	$ 17,261	$ 17,376	$ 93,416	$ 72,382	$ 60,492
Income from continuing operations	2,081	1,551	1,593	1,629	890	1,012	1,135	2,312	6,854	5,349	3,621
Income from discontinued operations	8	44	(33)	(8)	2,023	109	145	120	11	2,397	298
Net income (loss) attributable to Whitestone REIT	$ 2,051	$ 1,570	$ 1,534	$ 1,594	$ 2,862	$ 1,100	$ 1,252	$ 2,372	$ 6,749	$ 7,586	$ 3,794
Basic Earnings Per Share:
Income (loss) from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares (in dollars per share)	$ 0.07	$ 0.05	$ 0.06	$ 0.07	$ 0.04	$ 0.04	$ 0.05	$ 0.10	$ 0.25	$ 0.23	$ 0.19
Income from discontinued operations attributable to Whitestone REIT (in dollars per share)	0.00	0.00	0.00	0.00	0.08	0.01	0.00	0.01	0.00	0.10	0.02
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares (in dollars per share)	0.07	0.05	0.06	0.07	0.12	0.05	0.05	0.11	0.25	0.33	0.21
Diluted Earnings Per Share:
Income (loss) from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares (in dollars per share)	0.07	0.05	0.06	0.06	0.03	0.04	0.05	0.10	0.24	0.22	0.19
Income from discontinued operations attributable to Whitestone REIT (in dollars per share)	0.00	0.00	0.00	0.00	0.09	0.01	0.00	0.01	0.00	0.10	0.01
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares (in dollars per share)	$ 0.07	$ 0.05	$ 0.06	$ 0.06	$ 0.12	$ 0.05	$ 0.05	$ 0.11	$ 0.24	$ 0.32	$ 0.20

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Subsequent Events f (Details) - Pinnacle Phase II [Member] - Subsequent Event [Member] $ in Millions	Feb. 17, 2016 USD ($) a
Subsequent Event [Line Items]
Area of land sold (in acres)	0.5
Area of land (in acres)	4.45
Proceeds from sale of real estate | $	$ 1.1

XML

Schedule II - Valuation and Qualifying Accounts Schedule II - Valuation and Qualifying Accounts (Details) - Allowance for Doubtful Accounts [Member] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at Beginning of Year	$ 4,964	$ 3,613	$ 2,226
Charged to Costs and Expense	1,974	1,602	1,638
Deductions from Reserves	(291)	(251)	(251)
Balance at End of Year	$ 6,647	$ 4,964	$ 3,613

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Schedule III - Real Estate and Accumulated Depreciation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2015
Initial Cost
Land				$ 213,978
Building and Improvements				561,856
Costs Capitalized Subsequent to Acquisition
Improvements (net)				58,393
Carrying Costs				1,311
Gross Amount at which Carried at End of Period
Land				213,978
Building and Improvements				621,560
Total	$ 673,655	$ 537,872	$ 401,325	835,538
Accumulated Depreciation				89,580
Reconciliation of Carrying Amount of Real Estate Investments [Roll Forward]
Balance at beginning of period	673,655	537,872	401,325
Additions during the period:
Acquisitions	150,331	132,734	130,731
Improvements	12,653	9,330	6,164
Real estate, total additions	162,984	142,064	136,895
Deductions - cost of real estate sold or retired	(1,101)	(6,281)	(348)
Balance at close of period	$ 835,538	$ 673,655	$ 537,872
Aggregate cost of real estate for federal income tax purposes				$ 807,349
New Acquisitions Through Earlier Attainment, Percent Occupancy				90.00%
New Acquisitions Through Earlier Attainment, Term of Ownership	18 months
Anthem Marketplace [Member]
Additions during the period:
Amount of encumbrances				$ 15,100
Headquarters Village [Member]
Additions during the period:
Amount of encumbrances				19,000
Mercado at Scottsdale Ranch [Member]
Additions during the period:
Amount of encumbrances				11,100
Paradise Plaza [Member]
Additions during the period:
Amount of encumbrances				9,200
Pinnacle of Scottsdale [Member]
Additions during the period:
Amount of encumbrances				14,100
Shops at Pecos Ranch [Member]
Additions during the period:
Amount of encumbrances				14,000
Shops at Starwood [Member]
Additions during the period:
Amount of encumbrances				14,300
Terravita Marketplace [Member]
Additions during the period:
Amount of encumbrances				10,500
Village Square at Dana Park [Member]
Additions during the period:
Amount of encumbrances				2,600
Uptown Tower [Member]
Additions during the period:
Amount of encumbrances				16,500
Woodlake Plaza [Member]
Additions during the period:
Amount of encumbrances				6,500
All Office/Flex Communities Except Corporate Park Northwest and Brookhill [Member]
Additions during the period:
Amount of encumbrances				37,000
Total Operating Portfolio [Member]
Initial Cost
Land				188,554
Building and Improvements				513,594
Costs Capitalized Subsequent to Acquisition
Improvements (net)				54,870
Carrying Costs				517
Gross Amount at which Carried at End of Period
Land				188,554
Building and Improvements				568,981
Total	$ 757,535			757,535
Accumulated Depreciation				88,658
Additions during the period:
Balance at close of period	757,535
Retail Communities [Member]
Initial Cost
Land				173,704
Building and Improvements				439,303
Costs Capitalized Subsequent to Acquisition
Improvements (net)				38,075
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				173,704
Building and Improvements				477,378
Total	651,082			651,082
Accumulated Depreciation				54,883
Additions during the period:
Balance at close of period	651,082
Retail Communities [Member] | Ahwatukee Plaza [Member]
Initial Cost
Land				5,126
Building and Improvements				4,086
Costs Capitalized Subsequent to Acquisition
Improvements (net)				322
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				5,126
Building and Improvements				4,408
Total	$ 9,534			9,534
Accumulated Depreciation				549
Date Acquired	Aug. 16, 2011
Additions during the period:
Balance at close of period	$ 9,534
Retail Communities [Member] | Anthem Marketplace [Member]
Initial Cost
Land				4,790
Building and Improvements				17,973
Costs Capitalized Subsequent to Acquisition
Improvements (net)				160
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				4,790
Building and Improvements				18,133
Total	$ 22,923			22,923
Accumulated Depreciation				1,192
Date Acquired	Jun. 28, 2013
Additions during the period:
Balance at close of period	$ 22,923
Retail Communities [Member] | Bellnot Square [Member]
Initial Cost
Land				1,154
Building and Improvements				4,638
Costs Capitalized Subsequent to Acquisition
Improvements (net)				411
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				1,154
Building and Improvements				5,049
Total	$ 6,203			6,203
Accumulated Depreciation				1,817
Date Acquired	Jan. 01, 2002
Additions during the period:
Balance at close of period	$ 6,203
Retail Communities [Member] | Bissonnet Beltway [Member]
Initial Cost
Land				415
Building and Improvements				1,947
Costs Capitalized Subsequent to Acquisition
Improvements (net)				428
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				415
Building and Improvements				2,375
Total	$ 2,790			2,790
Accumulated Depreciation				1,572
Date Acquired	Jan. 01, 1999
Additions during the period:
Balance at close of period	$ 2,790
Retail Communities [Member] | Centre South [Member]
Initial Cost
Land				481
Building and Improvements				1,596
Costs Capitalized Subsequent to Acquisition
Improvements (net)				590
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				481
Building and Improvements				2,186
Total	$ 2,667			2,667
Accumulated Depreciation				1,071
Date Acquired	Jan. 01, 2000
Additions during the period:
Balance at close of period	$ 2,667
Retail Communities [Member] | The Citadel [Member]
Initial Cost
Land				472
Building and Improvements				1,777
Costs Capitalized Subsequent to Acquisition
Improvements (net)				2,595
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				472
Building and Improvements				4,372
Total	4,844			4,844
Additions during the period:
Balance at close of period	4,844
Retail Communities [Member] | City View Village [Member]
Initial Cost
Land				2,044
Building and Improvements				4,149
Costs Capitalized Subsequent to Acquisition
Improvements (net)				(12)
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				2,044
Building and Improvements				4,137
Total	$ 6,181			6,181
Accumulated Depreciation				80
Date Acquired	Mar. 31, 2015
Additions during the period:
Balance at close of period	$ 6,181
Retail Communities [Member] | Corporate Park Woodland II [Member]
Initial Cost
Land				2,758
Building and Improvements				0
Costs Capitalized Subsequent to Acquisition
Improvements (net)				5
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				2,758
Building and Improvements				5
Total	2,763			2,763
Additions during the period:
Balance at close of period	2,763
Retail Communities [Member] | Desert Canyon [Member]
Initial Cost
Land				1,976
Building and Improvements				1,704
Costs Capitalized Subsequent to Acquisition
Improvements (net)				629
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				1,976
Building and Improvements				2,333
Total	4,309			4,309
Additions during the period:
Balance at close of period	4,309
Retail Communities [Member] | Fountain Hills Plaza [Member]
Initial Cost
Land				5,113
Building and Improvements				15,340
Costs Capitalized Subsequent to Acquisition
Improvements (net)				64
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				5,113
Building and Improvements				15,404
Total	20,517			20,517
Additions during the period:
Balance at close of period	20,517
Retail Communities [Member] | Fountain Square [Member]
Initial Cost
Land				5,573
Building and Improvements				9,828
Costs Capitalized Subsequent to Acquisition
Improvements (net)				1,630
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				5,573
Building and Improvements				11,458
Total	17,031			17,031
Additions during the period:
Balance at close of period	17,031
Retail Communities [Member] | Fulton Ranch Towne Center [Member]
Initial Cost
Land				7,604
Building and Improvements				22,612
Costs Capitalized Subsequent to Acquisition
Improvements (net)				93
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				7,604
Building and Improvements				22,705
Total	30,309			30,309
Additions during the period:
Balance at close of period	30,309
Retail Communities [Member] | Gilbert Tuscany Village [Member]
Initial Cost
Land				1,767
Building and Improvements				3,233
Costs Capitalized Subsequent to Acquisition
Improvements (net)				1,441
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				1,767
Building and Improvements				4,674
Total	6,441			6,441
Additions during the period:
Balance at close of period	6,441
Retail Communities [Member] | Heritage Trace Plaza [Member]
Initial Cost
Land				6,209
Building and Improvements				13,821
Costs Capitalized Subsequent to Acquisition
Improvements (net)				30
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				6,209
Building and Improvements				13,851
Total	20,060			20,060
Additions during the period:
Balance at close of period	20,060
Retail Communities [Member] | Holly Knight [Member]
Initial Cost
Land				320
Building and Improvements				1,293
Costs Capitalized Subsequent to Acquisition
Improvements (net)				165
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				320
Building and Improvements				1,458
Total	$ 1,778			1,778
Accumulated Depreciation				974
Date Acquired	Aug. 01, 2000
Additions during the period:
Balance at close of period	$ 1,778
Retail Communities [Member] | Headquarters Village [Member]
Initial Cost
Land				7,171
Building and Improvements				18,439
Costs Capitalized Subsequent to Acquisition
Improvements (net)				230
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				7,171
Building and Improvements				18,669
Total	$ 25,840			25,840
Accumulated Depreciation				1,353
Date Acquired	Mar. 28, 2013
Additions during the period:
Balance at close of period	$ 25,840
Retail Communities [Member] | Keller Place [Member]
Initial Cost
Land				5,977
Building and Improvements				7,577
Costs Capitalized Subsequent to Acquisition
Improvements (net)				(79)
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				5,977
Building and Improvements				7,498
Total	$ 13,475			13,475
Accumulated Depreciation				66
Date Acquired	Aug. 26, 2015
Additions during the period:
Balance at close of period	$ 13,475
Retail Communities [Member] | Kempwood Plaza [Member]
Initial Cost
Land				733
Building and Improvements				1,798
Costs Capitalized Subsequent to Acquisition
Improvements (net)				764
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				733
Building and Improvements				2,562
Total	$ 3,295			3,295
Accumulated Depreciation				1,201
Date Acquired	Feb. 02, 1999
Additions during the period:
Balance at close of period	$ 3,295
Retail Communities [Member] | Lion Square [Member]
Initial Cost
Land				1,546
Building and Improvements				4,289
Costs Capitalized Subsequent to Acquisition
Improvements (net)				3,202
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				1,546
Building and Improvements				7,491
Total	$ 9,037			9,037
Accumulated Depreciation				3,186
Date Acquired	Jan. 01, 2000
Additions during the period:
Balance at close of period	$ 9,037
Retail Communities [Member] | MarketPlace at Central [Member]
Initial Cost
Land				1,305
Building and Improvements				5,324
Costs Capitalized Subsequent to Acquisition
Improvements (net)				1,067
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				1,305
Building and Improvements				6,391
Total	7,696			7,696
Additions during the period:
Balance at close of period	7,696
Retail Communities [Member] | Market Street at DC Ranch [Member]
Initial Cost
Land				9,710
Building and Improvements				26,779
Costs Capitalized Subsequent to Acquisition
Improvements (net)				1,687
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				9,710
Building and Improvements				28,466
Total	38,176			38,176
Additions during the period:
Balance at close of period	38,176
Retail Communities [Member] | Mercado at Scottsdale Ranch [Member]
Initial Cost
Land				8,728
Building and Improvements				12,560
Costs Capitalized Subsequent to Acquisition
Improvements (net)				495
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				8,728
Building and Improvements				13,055
Total	$ 21,783			21,783
Accumulated Depreciation				871
Date Acquired	Jun. 19, 2013
Additions during the period:
Balance at close of period	$ 21,783
Retail Communities [Member] | Paradise Plaza [Member]
Initial Cost
Land				6,155
Building and Improvements				10,221
Costs Capitalized Subsequent to Acquisition
Improvements (net)				859
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				6,155
Building and Improvements				11,080
Total	17,235			17,235
Additions during the period:
Balance at close of period	17,235
Retail Communities [Member] | Parkside Village North [Member]
Initial Cost
Land				3,877
Building and Improvements				8,629
Costs Capitalized Subsequent to Acquisition
Improvements (net)				62
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				3,877
Building and Improvements				8,691
Total	$ 12,568			12,568
Accumulated Depreciation				111
Date Acquired	Jul. 02, 2015
Additions during the period:
Balance at close of period	$ 12,568
Retail Communities [Member] | Parkside Village South [Member]
Initial Cost
Land				5,562
Building and Improvements				27,154
Costs Capitalized Subsequent to Acquisition
Improvements (net)				19
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				5,562
Building and Improvements				27,173
Total	32,735			32,735
Additions during the period:
Balance at close of period	32,735
Retail Communities [Member] | Pinnacle of Scottsdale [Member]
Initial Cost
Land				6,648
Building and Improvements				22,466
Costs Capitalized Subsequent to Acquisition
Improvements (net)				1,267
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				6,648
Building and Improvements				23,733
Total	$ 30,381			30,381
Accumulated Depreciation				2,559
Date Acquired	Dec. 22, 2011
Additions during the period:
Balance at close of period	$ 30,381
Retail Communities [Member] | Providence [Member]
Initial Cost
Land				918
Building and Improvements				3,675
Costs Capitalized Subsequent to Acquisition
Improvements (net)				669
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				918
Building and Improvements				4,344
Total	$ 5,262			5,262
Accumulated Depreciation				1,839
Date Acquired	Mar. 30, 2001
Additions during the period:
Balance at close of period	$ 5,262
Retail Communities [Member] | Quinlan Crossing [Member]
Initial Cost
Land				9,561
Building and Improvements				28,683
Costs Capitalized Subsequent to Acquisition
Improvements (net)				1
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				9,561
Building and Improvements				28,684
Total	$ 38,245			38,245
Accumulated Depreciation				245
Date Acquired	Aug. 26, 2015
Additions during the period:
Balance at close of period	$ 38,245
Retail Communities [Member] | Shaver [Member]
Initial Cost
Land				184
Building and Improvements				633
Costs Capitalized Subsequent to Acquisition
Improvements (net)				(41)
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				184
Building and Improvements				592
Total	$ 776			776
Accumulated Depreciation				295
Date Acquired	Dec. 17, 1999
Additions during the period:
Balance at close of period	$ 776
Retail Communities [Member] | Shops at Pecos Ranch [Member]
Initial Cost
Land				3,781
Building and Improvements				15,123
Costs Capitalized Subsequent to Acquisition
Improvements (net)				560
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				3,781
Building and Improvements				15,683
Total	$ 19,464			19,464
Accumulated Depreciation				1,256
Date Acquired	Dec. 28, 2012
Additions during the period:
Balance at close of period	$ 19,464
Retail Communities [Member] | Shops at Starwood [Member]
Initial Cost
Land				4,093
Building and Improvements				11,487
Costs Capitalized Subsequent to Acquisition
Improvements (net)				154
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				4,093
Building and Improvements				11,641
Total	$ 15,734			15,734
Accumulated Depreciation				1,237
Date Acquired	Dec. 28, 2011
Additions during the period:
Balance at close of period	$ 15,734
Retail Communities [Member] | The Shops at Williams Trace [Member]
Initial Cost
Land				5,920
Building and Improvements				14,297
Costs Capitalized Subsequent to Acquisition
Improvements (net)				66
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				5,920
Building and Improvements				14,363
Total	$ 20,283			20,283
Accumulated Depreciation				367
Date Acquired	Dec. 24, 2014
Additions during the period:
Balance at close of period	$ 20,283
Retail Communities [Member] | South Richey [Member]
Initial Cost
Land				778
Building and Improvements				2,584
Costs Capitalized Subsequent to Acquisition
Improvements (net)				1,929
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				778
Building and Improvements				4,513
Total	$ 5,291			5,291
Accumulated Depreciation				1,803
Date Acquired	Aug. 25, 1999
Additions during the period:
Balance at close of period	$ 5,291
Retail Communities [Member] | Spoerlein Commons [Member]
Initial Cost
Land				2,340
Building and Improvements				7,296
Costs Capitalized Subsequent to Acquisition
Improvements (net)				530
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				2,340
Building and Improvements				7,826
Total	$ 10,166			10,166
Accumulated Depreciation				1,503
Date Acquired	Jan. 16, 2009
Additions during the period:
Balance at close of period	$ 10,166
Retail Communities [Member] | The Strand at Huebner Oaks [Member]
Initial Cost
Land				5,805
Building and Improvements				12,335
Costs Capitalized Subsequent to Acquisition
Improvements (net)				82
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				5,805
Building and Improvements				12,417
Total	$ 18,222			18,222
Accumulated Depreciation				397
Date Acquired	Sep. 19, 2014
Additions during the period:
Balance at close of period	$ 18,222
Retail Communities [Member] | SugarPark Plaza [Member]
Initial Cost
Land				1,781
Building and Improvements				7,125
Costs Capitalized Subsequent to Acquisition
Improvements (net)				512
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				1,781
Building and Improvements				7,637
Total	$ 9,418			9,418
Accumulated Depreciation				2,284
Date Acquired	Sep. 08, 2004
Additions during the period:
Balance at close of period	$ 9,418
Retail Communities [Member] | Sunridge [Member]
Initial Cost
Land				276
Building and Improvements				1,186
Costs Capitalized Subsequent to Acquisition
Improvements (net)				331
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				276
Building and Improvements				1,517
Total	$ 1,793			1,793
Accumulated Depreciation				622
Date Acquired	Jan. 01, 2002
Additions during the period:
Balance at close of period	$ 1,793
Retail Communities [Member] | Sunset at Pinnacle Peak [Member]
Initial Cost
Land				3,610
Building and Improvements				2,734
Costs Capitalized Subsequent to Acquisition
Improvements (net)				432
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				3,610
Building and Improvements				3,166
Total	$ 6,776			6,776
Accumulated Depreciation				312
Date Acquired	May 29, 2012
Additions during the period:
Balance at close of period	$ 6,776
Retail Communities [Member] | Terravita Marketplace [Member]
Initial Cost
Land				7,171
Building and Improvements				9,392
Costs Capitalized Subsequent to Acquisition
Improvements (net)				573
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				7,171
Building and Improvements				9,965
Total	$ 17,136			17,136
Accumulated Depreciation				1,212
Date Acquired	Aug. 08, 2011
Additions during the period:
Balance at close of period	$ 17,136
Retail Communities [Member] | Torrey Square [Member]
Initial Cost
Land				1,981
Building and Improvements				2,971
Costs Capitalized Subsequent to Acquisition
Improvements (net)				1,208
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				1,981
Building and Improvements				4,179
Total	$ 6,160			6,160
Accumulated Depreciation				2,048
Date Acquired	Jan. 01, 2000
Additions during the period:
Balance at close of period	$ 6,160
Retail Communities [Member] | Town Park [Member]
Initial Cost
Land				850
Building and Improvements				2,911
Costs Capitalized Subsequent to Acquisition
Improvements (net)				176
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				850
Building and Improvements				3,087
Total	$ 3,937			3,937
Accumulated Depreciation				1,704
Date Acquired	Jan. 01, 1999
Additions during the period:
Balance at close of period	$ 3,937
Retail Communities [Member] | Village Square at Dana Park [Member]
Initial Cost
Land				10,877
Building and Improvements				40,252
Costs Capitalized Subsequent to Acquisition
Improvements (net)				2,306
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				10,877
Building and Improvements				42,558
Total	$ 53,435			53,435
Accumulated Depreciation				3,535
Date Acquired	Sep. 21, 2012
Additions during the period:
Balance at close of period	$ 53,435
Retail Communities [Member] | Webster Pointe [Member]
Initial Cost
Land				720
Building and Improvements				1,150
Costs Capitalized Subsequent to Acquisition
Improvements (net)				197
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				720
Building and Improvements				1,347
Total	$ 2,067			2,067
Accumulated Depreciation				686
Date Acquired	Jan. 01, 2000
Additions during the period:
Balance at close of period	$ 2,067
Retail Communities [Member] | Westchase [Member]
Initial Cost
Land				423
Building and Improvements				1,751
Costs Capitalized Subsequent to Acquisition
Improvements (net)				2,763
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				423
Building and Improvements				4,514
Total	$ 4,937			4,937
Accumulated Depreciation				1,529
Date Acquired	Jan. 01, 2002
Additions during the period:
Balance at close of period	$ 4,937
Retail Communities [Member] | Williams Trace Plaza [Member]
Initial Cost
Land				6,800
Building and Improvements				14,003
Costs Capitalized Subsequent to Acquisition
Improvements (net)				30
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				6,800
Building and Improvements				14,033
Total	$ 20,833			20,833
Accumulated Depreciation				359
Date Acquired	Dec. 24, 2014
Additions during the period:
Balance at close of period	$ 20,833
Retail Communities [Member] | Windsor Park [Member]
Initial Cost
Land				2,621
Building and Improvements				10,482
Costs Capitalized Subsequent to Acquisition
Improvements (net)				7,473
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				2,621
Building and Improvements				17,955
Total	$ 20,576			20,576
Accumulated Depreciation				5,789
Date Acquired	Dec. 16, 2003
Additions during the period:
Balance at close of period	$ 20,576
Office Flex Communities [Member]
Initial Cost
Land				9,439
Building and Improvements				41,074
Costs Capitalized Subsequent to Acquisition
Improvements (net)				7,957
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				9,439
Building and Improvements				49,031
Total	58,470			58,470
Accumulated Depreciation				21,945
Additions during the period:
Balance at close of period	58,470
Office Flex Communities [Member] | Brookhill [Member]
Initial Cost
Land				186
Building and Improvements				788
Costs Capitalized Subsequent to Acquisition
Improvements (net)				375
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				186
Building and Improvements				1,163
Total	$ 1,349			1,349
Accumulated Depreciation				454
Date Acquired	Jan. 01, 2002
Additions during the period:
Balance at close of period	$ 1,349
Office Flex Communities [Member] | Corporate Park Northwest [Member]
Initial Cost
Land				1,534
Building and Improvements				6,306
Costs Capitalized Subsequent to Acquisition
Improvements (net)				2,032
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				1,534
Building and Improvements				8,338
Total	$ 9,872			9,872
Accumulated Depreciation				2,907
Date Acquired	Jan. 01, 2002
Additions during the period:
Balance at close of period	$ 9,872
Office Flex Communities [Member] | Corporate Park West [Member]
Initial Cost
Land				2,555
Building and Improvements				10,267
Costs Capitalized Subsequent to Acquisition
Improvements (net)				980
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				2,555
Building and Improvements				11,247
Total	$ 13,802			13,802
Accumulated Depreciation				4,358
Date Acquired	Jan. 01, 2002
Additions during the period:
Balance at close of period	$ 13,802
Office Flex Communities [Member] | Corporate Park Woodland [Member]
Initial Cost
Land				652
Building and Improvements				5,330
Costs Capitalized Subsequent to Acquisition
Improvements (net)				653
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				652
Building and Improvements				5,983
Total	$ 6,635			6,635
Accumulated Depreciation				3,008
Date of Construction	Nov. 01, 2000
Additions during the period:
Balance at close of period	$ 6,635
Office Flex Communities [Member] | Dairy Ashford [Member]
Initial Cost
Land				226
Building and Improvements				1,211
Costs Capitalized Subsequent to Acquisition
Improvements (net)				80
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				226
Building and Improvements				1,291
Total	$ 1,517			1,517
Accumulated Depreciation				647
Date Acquired	Jan. 01, 1999
Additions during the period:
Balance at close of period	$ 1,517
Office Flex Communities [Member] | Holly Hall Industrial Park [Member]
Initial Cost
Land				608
Building and Improvements				2,516
Costs Capitalized Subsequent to Acquisition
Improvements (net)				396
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				608
Building and Improvements				2,912
Total	$ 3,520			3,520
Accumulated Depreciation				1,151
Date Acquired	Jan. 01, 2002
Additions during the period:
Balance at close of period	$ 3,520
Office Flex Communities [Member] | Interstate 10 Warehouse [Member]
Initial Cost
Land				208
Building and Improvements				3,700
Costs Capitalized Subsequent to Acquisition
Improvements (net)				374
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				208
Building and Improvements				4,074
Total	$ 4,282			4,282
Accumulated Depreciation				2,581
Date Acquired	Jan. 01, 1999
Additions during the period:
Balance at close of period	$ 4,282
Office Flex Communities [Member] | Main Park [Member]
Initial Cost
Land				1,328
Building and Improvements				2,721
Costs Capitalized Subsequent to Acquisition
Improvements (net)				580
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				1,328
Building and Improvements				3,301
Total	$ 4,629			4,629
Accumulated Depreciation				1,583
Date Acquired	Jan. 01, 1999
Additions during the period:
Balance at close of period	$ 4,629
Office Flex Communities [Member] | Plaza Park [Member]
Initial Cost
Land				902
Building and Improvements				3,294
Costs Capitalized Subsequent to Acquisition
Improvements (net)				1,059
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				902
Building and Improvements				4,353
Total	$ 5,255			5,255
Accumulated Depreciation				2,192
Date Acquired	Jan. 01, 2000
Additions during the period:
Balance at close of period	$ 5,255
Office Flex Communities [Member] | Westbelt Plaza [Member]
Initial Cost
Land				568
Building and Improvements				2,165
Costs Capitalized Subsequent to Acquisition
Improvements (net)				735
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				568
Building and Improvements				2,900
Total	$ 3,468			3,468
Accumulated Depreciation				1,678
Date Acquired	Jan. 01, 1999
Additions during the period:
Balance at close of period	$ 3,468
Office Flex Communities [Member] | Westgate Service Center [Member]
Initial Cost
Land				672
Building and Improvements				2,776
Costs Capitalized Subsequent to Acquisition
Improvements (net)				693
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				672
Building and Improvements				3,469
Total	$ 4,141			4,141
Accumulated Depreciation				1,386
Date Acquired	Jan. 01, 2002
Additions during the period:
Balance at close of period	$ 4,141
Office Communities [Member]
Initial Cost
Land				5,411
Building and Improvements				33,217
Costs Capitalized Subsequent to Acquisition
Improvements (net)				8,838
Carrying Costs				517
Gross Amount at which Carried at End of Period
Land				5,411
Building and Improvements				42,572
Total	47,983			47,983
Accumulated Depreciation				11,830
Additions during the period:
Balance at close of period	47,983
Office Communities [Member] | 9101 LBJ Freeway [Member]
Initial Cost
Land				1,597
Building and Improvements				6,078
Costs Capitalized Subsequent to Acquisition
Improvements (net)				1,300
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				1,597
Building and Improvements				7,378
Total	$ 8,975			8,975
Accumulated Depreciation				2,205
Date Acquired	Aug. 10, 2005
Additions during the period:
Balance at close of period	$ 8,975
Office Communities [Member] | Pima Norte [Member]
Initial Cost
Land				1,086
Building and Improvements				7,162
Costs Capitalized Subsequent to Acquisition
Improvements (net)				2,067
Carrying Costs				517
Gross Amount at which Carried at End of Period
Land				1,086
Building and Improvements				9,746
Total	$ 10,832			10,832
Accumulated Depreciation				1,842
Date Acquired	Oct. 04, 2007
Additions during the period:
Balance at close of period	$ 10,832
Office Communities [Member] | Uptown Tower [Member]
Initial Cost
Land				1,621
Building and Improvements				15,551
Costs Capitalized Subsequent to Acquisition
Improvements (net)				3,928
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				1,621
Building and Improvements				19,479
Total	$ 21,100			21,100
Accumulated Depreciation				6,007
Date Acquired	Nov. 22, 2005
Additions during the period:
Balance at close of period	$ 21,100
Office Communities [Member] | Woodlake Plaza [Member]
Initial Cost
Land				1,107
Building and Improvements				4,426
Costs Capitalized Subsequent to Acquisition
Improvements (net)				1,543
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				1,107
Building and Improvements				5,969
Total	$ 7,076			7,076
Accumulated Depreciation				1,776
Date Acquired	Mar. 14, 2005
Additions during the period:
Balance at close of period	$ 7,076
Development Portfolio [Member]
Initial Cost
Land				17,421
Building and Improvements				48,262
Costs Capitalized Subsequent to Acquisition
Improvements (net)				144
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				17,421
Building and Improvements				48,406
Total	65,827			65,827
Accumulated Depreciation				922
Additions during the period:
Balance at close of period	$ 65,827
Development Portfolio [Member] | The Citadel [Member]
Gross Amount at which Carried at End of Period
Accumulated Depreciation				948
Date Acquired	Sep. 28, 2010
Development Portfolio [Member] | Corporate Park Woodland II [Member]
Gross Amount at which Carried at End of Period
Accumulated Depreciation				5
Date Acquired	Oct. 17, 2013
Development Portfolio [Member] | Desert Canyon [Member]
Gross Amount at which Carried at End of Period
Accumulated Depreciation				385
Date Acquired	Apr. 13, 2011
Development Portfolio [Member] | Fountain Hills Plaza [Member]
Gross Amount at which Carried at End of Period
Accumulated Depreciation				889
Date Acquired	Oct. 07, 2013
Development Portfolio [Member] | Fountain Square [Member]
Gross Amount at which Carried at End of Period
Accumulated Depreciation				1,001
Date Acquired	Sep. 21, 2012
Development Portfolio [Member] | Fulton Ranch Towne Center [Member]
Gross Amount at which Carried at End of Period
Accumulated Depreciation				676
Date Acquired	Nov. 05, 2014
Development Portfolio [Member] | Gilbert Tuscany Village [Member]
Gross Amount at which Carried at End of Period
Accumulated Depreciation				892
Date Acquired	Jun. 28, 2011
Development Portfolio [Member] | Heritage Trace Plaza [Member]
Gross Amount at which Carried at End of Period
Accumulated Depreciation				539
Date Acquired	Jul. 01, 2014
Development Portfolio [Member] | MarketPlace at Central [Member]
Gross Amount at which Carried at End of Period
Accumulated Depreciation				911
Date Acquired	Nov. 01, 2010
Development Portfolio [Member] | Market Street at DC Ranch [Member]
Gross Amount at which Carried at End of Period
Accumulated Depreciation				1,670
Date Acquired	Dec. 05, 2013
Development Portfolio [Member] | Paradise Plaza [Member]
Gross Amount at which Carried at End of Period
Accumulated Depreciation				995
Date Acquired	Aug. 08, 2012
Development Portfolio [Member] | Parkside Village South [Member]
Gross Amount at which Carried at End of Period
Accumulated Depreciation				348
Date Acquired	Jul. 02, 2015
Development Portfolio [Member] | Davenport Village [Member]
Initial Cost
Land				11,367
Building and Improvements				34,101
Costs Capitalized Subsequent to Acquisition
Improvements (net)				20
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				11,367
Building and Improvements				34,121
Total	$ 45,488			45,488
Accumulated Depreciation				510
Date Acquired	May 27, 2015
Additions during the period:
Balance at close of period	$ 45,488
Development Portfolio [Member] | Gilbert Tuscany Village Hard Corner [Member]
Initial Cost
Land				856
Building and Improvements				794
Costs Capitalized Subsequent to Acquisition
Improvements (net)				0
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				856
Building and Improvements				794
Total	$ 1,650			1,650
Accumulated Depreciation				10
Date Acquired	Aug. 28, 2015
Additions during the period:
Balance at close of period	$ 1,650
Development Portfolio [Member] | The Promenade at Fulton Ranch [Member]
Initial Cost
Land				5,198
Building and Improvements				13,367
Costs Capitalized Subsequent to Acquisition
Improvements (net)				124
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				5,198
Building and Improvements				13,491
Total	$ 18,689			18,689
Accumulated Depreciation				402
Date Acquired	Nov. 05, 2014
Additions during the period:
Balance at close of period	$ 18,689
Property Held for Development [Member]
Initial Cost
Land				8,003
Building and Improvements				0
Costs Capitalized Subsequent to Acquisition
Improvements (net)				3,379
Carrying Costs				794
Gross Amount at which Carried at End of Period
Land				8,003
Building and Improvements				4,173
Total	12,176			12,176
Accumulated Depreciation				0
Additions during the period:
Balance at close of period	12,176
Property Held for Development [Member] | Anthem Marketplace [Member]
Initial Cost
Land				204
Building and Improvements				0
Costs Capitalized Subsequent to Acquisition
Improvements (net)				0
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				204
Building and Improvements				0
Total	$ 204			204
Accumulated Depreciation				0
Date Acquired	Jun. 28, 2013
Additions during the period:
Balance at close of period	$ 204
Property Held for Development [Member] | Market Street at DC Ranch [Member]
Initial Cost
Land				704
Building and Improvements				0
Costs Capitalized Subsequent to Acquisition
Improvements (net)				0
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				704
Building and Improvements				0
Total	$ 704			704
Accumulated Depreciation				0
Date Acquired	Dec. 05, 2013
Additions during the period:
Balance at close of period	$ 704
Property Held for Development [Member] | Dana Park Development [Member]
Initial Cost
Land				4,000
Building and Improvements				0
Costs Capitalized Subsequent to Acquisition
Improvements (net)				7
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				4,000
Building and Improvements				7
Total	$ 4,007			4,007
Accumulated Depreciation				0
Date Acquired	Sep. 21, 2012
Additions during the period:
Balance at close of period	$ 4,007
Property Held for Development [Member] | Fountain Hills [Member]
Initial Cost
Land				277
Building and Improvements				0
Costs Capitalized Subsequent to Acquisition
Improvements (net)				0
Carrying Costs				0
Gross Amount at which Carried at End of Period
Land				277
Building and Improvements				0
Total	$ 277			277
Accumulated Depreciation				0
Date Acquired	Oct. 07, 2013
Additions during the period:
Balance at close of period	$ 277
Property Held for Development [Member] | Pinnacle Phase II [Member]
Initial Cost
Land				1,000
Building and Improvements				0
Costs Capitalized Subsequent to Acquisition
Improvements (net)				338
Carrying Costs				399
Gross Amount at which Carried at End of Period
Land				1,000
Building and Improvements				737
Total	$ 1,737			1,737
Accumulated Depreciation				0
Date Acquired	Dec. 28, 2011
Additions during the period:
Balance at close of period	$ 1,737
Property Held for Development [Member] | Shops at Starwood Phase III [Member]
Initial Cost
Land				1,818
Building and Improvements				0
Costs Capitalized Subsequent to Acquisition
Improvements (net)				3,034
Carrying Costs				395
Gross Amount at which Carried at End of Period
Land				1,818
Building and Improvements				3,429
Total	$ 5,247			5,247
Accumulated Depreciation				$ 0
Date Acquired	Dec. 28, 2011
Additions during the period:
Balance at close of period	$ 5,247
Minimum [Member] | Retail Communities [Member] | Ahwatukee Plaza [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Anthem Marketplace [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Bellnot Square [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Bissonnet Beltway [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Centre South [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | The Citadel [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | City View Village [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Corporate Park Woodland II [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Desert Canyon [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Fountain Hills Plaza [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Fountain Square [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Fulton Ranch Towne Center [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Gilbert Tuscany Village [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Heritage Trace Plaza [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Holly Knight [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Headquarters Village [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Keller Place [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Kempwood Plaza [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Lion Square [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | MarketPlace at Central [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Market Street at DC Ranch [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Mercado at Scottsdale Ranch [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Paradise Plaza [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Parkside Village North [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Parkside Village South [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Pinnacle of Scottsdale [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Providence [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Quinlan Crossing [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Shaver [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Shops at Pecos Ranch [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Shops at Starwood [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | The Shops at Williams Trace [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | South Richey [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Spoerlein Commons [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | The Strand at Huebner Oaks [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | SugarPark Plaza [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Sunridge [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Sunset at Pinnacle Peak [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Terravita Marketplace [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Torrey Square [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Town Park [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Village Square at Dana Park [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Webster Pointe [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Westchase [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Williams Trace Plaza [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Retail Communities [Member] | Windsor Park [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Office Flex Communities [Member] | Brookhill [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Office Flex Communities [Member] | Corporate Park Northwest [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Office Flex Communities [Member] | Corporate Park West [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Office Flex Communities [Member] | Corporate Park Woodland [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Office Flex Communities [Member] | Dairy Ashford [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Office Flex Communities [Member] | Holly Hall Industrial Park [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Office Flex Communities [Member] | Interstate 10 Warehouse [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Office Flex Communities [Member] | Main Park [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Office Flex Communities [Member] | Plaza Park [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Office Flex Communities [Member] | Westbelt Plaza [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Office Flex Communities [Member] | Westgate Service Center [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Office Communities [Member] | 9101 LBJ Freeway [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Office Communities [Member] | Pima Norte [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Office Communities [Member] | Uptown Tower [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Office Communities [Member] | Woodlake Plaza [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Development Portfolio [Member] | Davenport Village [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Development Portfolio [Member] | Gilbert Tuscany Village Hard Corner [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Minimum [Member] | Development Portfolio [Member] | The Promenade at Fulton Ranch [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	5 years
Maximum [Member] | Retail Communities [Member] | Ahwatukee Plaza [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Anthem Marketplace [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Bellnot Square [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Bissonnet Beltway [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Centre South [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | The Citadel [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | City View Village [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Corporate Park Woodland II [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Desert Canyon [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Fountain Hills Plaza [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Fountain Square [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Fulton Ranch Towne Center [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Gilbert Tuscany Village [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Heritage Trace Plaza [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Holly Knight [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Headquarters Village [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Keller Place [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Kempwood Plaza [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Lion Square [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | MarketPlace at Central [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Market Street at DC Ranch [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Mercado at Scottsdale Ranch [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Paradise Plaza [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Parkside Village North [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Parkside Village South [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Pinnacle of Scottsdale [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Providence [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Quinlan Crossing [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Shaver [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Shops at Pecos Ranch [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Shops at Starwood [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | The Shops at Williams Trace [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | South Richey [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Spoerlein Commons [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | The Strand at Huebner Oaks [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | SugarPark Plaza [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Sunridge [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Sunset at Pinnacle Peak [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Terravita Marketplace [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Torrey Square [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Town Park [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Village Square at Dana Park [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Webster Pointe [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Westchase [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Williams Trace Plaza [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Retail Communities [Member] | Windsor Park [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Office Flex Communities [Member] | Brookhill [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Office Flex Communities [Member] | Corporate Park Northwest [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Office Flex Communities [Member] | Corporate Park West [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Office Flex Communities [Member] | Corporate Park Woodland [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Office Flex Communities [Member] | Dairy Ashford [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Office Flex Communities [Member] | Holly Hall Industrial Park [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Office Flex Communities [Member] | Interstate 10 Warehouse [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Office Flex Communities [Member] | Main Park [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Office Flex Communities [Member] | Plaza Park [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Office Flex Communities [Member] | Westbelt Plaza [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Office Flex Communities [Member] | Westgate Service Center [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Office Communities [Member] | 9101 LBJ Freeway [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Office Communities [Member] | Pima Norte [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Office Communities [Member] | Uptown Tower [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Office Communities [Member] | Woodlake Plaza [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Development Portfolio [Member] | Davenport Village [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Development Portfolio [Member] | Gilbert Tuscany Village Hard Corner [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years
Maximum [Member] | Development Portfolio [Member] | The Promenade at Fulton Ranch [Member]
Gross Amount at which Carried at End of Period
Depreciation Life	39 years