SELECTED QUARTERLY FINANCIAL DATA (unaudited)

The following is a summary of our unaudited quarterly financial information for the years ended December 31, 2018 and 2017 (in thousands, except per share data):



	First		Second		Third
	Quarter		Quarter		Quarter		Fourth
	(As restated)		(As restated)		(As restated)		Quarter
2018
Revenues	$	29,785	$	29,473	$	30,704	$	29,901
Net income	$	3,269	$	2,005	$	8,033	$	8,674
Net income attributable to Whitestone REIT	$	3,181	$	1,954	$	7,835	$	8,457
Basic Earnings per share:
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares ⁽¹⁾	$	0.08	$	0.05	$	0.20	$	0.21
Diluted Earnings per share:
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares ⁽¹⁾	$	0.08	$	0.05	$	0.19	$	0.21

	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter
2017
Revenues	$	28,267	$	30,208	$	33,653	$	33,831
Net income	$	1,493	$	2,043	$	3,077	$	1,975
Net income attributable to Whitestone REIT	$	1,440	$	1,983	$	2,993	$	1,921
Basic Earnings per share:
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares ⁽¹⁾	$	0.05	$	0.05	$	0.07	$	0.05
Diluted Earnings per share:
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares ⁽¹⁾	$	0.04	$	0.05	$	0.07	$	0.05


⁽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.

Quarterly Restatement of the 2018 Unaudited Quarterly Financial Statements

As previously disclosed in the Company’s Current Form 8-K filed with the SEC on February 27, 2019, on January 1, 2018, the Company adopted Topic 606, as subsequently amended, using the modified retrospective method and applied Topic 606 to those contracts that were not completed as of January 1, 2018. We applied Topic 606 to account for sales of real estate (that do not meet the definition of a business) to customers. We accounted for sales of real estate (that do not meet the definition of a business) to noncustomers under Accounting Standards Codification 610, “Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets” (“ASC 610”), which requires the application of certain concepts from ASC 606. In August 2018, the Company received a comment letter from the Staff relating to its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2018. The Staff requested that the Company provide them with an analysis of the Company’s determination that the contribution of assets to Pillarstone OP (as described in the Form 8-K) did not meet the requirements for derecognition of the underlying assets under Topic 606, and an explanation of the Company’s consideration of the immaterial accounting errors related to Pillarstone OP in its conclusion that the Company’s disclosure controls and procedures and internal controls over financial reporting were effective as of June 30, 2018 and December 31, 2017. In September 2018, the Company responded to the Staff’s letter with the requested analysis and explanation. In October 2018, the Company received a comment letter from the Staff with certain follow up questions. Subsequently, the Company engaged in verbal discussions with the Staff regarding its responses, and in February 2019, the Staff verbally informed the Company that it objected to the Company’s conclusion regarding the assessment of the transfer of control criteria in Topic 606 with respect to the contribution and objected to the Company’s continued recognition of the underlying assets and liabilities associated with the contribution subsequent to the adoption of Topic 606 on January 1, 2018. Accordingly, the Company concluded that the Company’s 2018 Quarterly Financial Statements should be restated. Because this change from the profit sharing method is only applicable for periods ending after giving effect to the implementation of Topic 606, no periods prior to January 1, 2018 are affected by this error. See Note 5 Investment in Real Estate Partnership for further details.

As a result of Topic 606 and ASC 610 adoptions and as reflected in the Quarterly Restatement, the Company has derecognized the underlying assets and liabilities associated with the Contribution as of January 1, 2018 and has recognized the Company’s investment in Pillarstone OP under the equity method of accounting. As a part of the Quarterly Restatement, the Company has made the following adjustments to the 2018 Quarterly Financial Statements.



CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
	Unaudited March 31, 2018
	Previously Reported ⁽¹⁾			Adjustments			Restated
ASSETS
Real estate assets, at cost
Property	$	1,148,176		$	(96,192	)	$	1,051,984
Accumulated depreciation	(135,599		)	36,811			(98,788		)
Total real estate assets	1,012,577			(59,381		)	953,196
Investment in real estate partnership	—			19,298			19,298
Cash and cash equivalents	9,337			(2,361		)	6,976
Restricted cash	257			—			257
Escrows and acquisition deposits	6,690			(1,133		)	5,557
Accrued rents and accounts receivable, net of allowance for doubtful accounts	24,675			(2,866		)	21,809
Receivable due from related party	—			894			894
Financed receivable due from related party	—			15,473			15,473
Unamortized lease commissions and loan costs	8,260			(1,238		)	7,022
Prepaid expenses and other assets	9,451			(10		)	9,441
Total assets	$	1,071,247		$	(31,324	)	$	1,039,923

LIABILITIES AND EQUITY
Liabilities:
Notes payable	$	668,526		$	(48,540	)	$	619,986
Accounts payable and accrued expenses	30,198			(1,576		)	28,622
Payable due to related party	—			699			699
Tenants’ security deposits	7,028			(1,262		)	5,766
Dividends and distributions payable	11,489			—			11,489
Total liabilities	717,241			(50,679		)	666,562
Commitments and contingencies:	—			—			—
Equity:
Preferred shares, $0.001 par value per share; 50,000,000 shares authorized; none issued and outstanding as of March 31, 2018	—			—			—
Common shares, $0.001 par value per share; 400,000,000 shares authorized; 39,179,540 issued and outstanding as of March 31, 2018	38			—			38
Additional paid-in capital	522,730			—			522,730
Accumulated deficit	(184,853		)	19,272			(165,581		)
Accumulated other comprehensive gain	5,528			—			5,528
Total Whitestone REIT shareholders’ equity	343,443			19,272			362,715
Redeemable operating partnership units	10,642			4			10,646
Noncontrolling interest in subsidiary	(79		)	79			—
Total equity	354,006			19,355			373,361
Total liabilities and equity	$	1,071,247		$	(31,324	)	$	1,039,923

⁽¹⁾ Previously reported balances are from the Quarterly Report on Form 10-Q for the quarter ended March 31, 2018.



CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)

	Unaudited June 30, 2018
	Previously Reported ⁽¹⁾			Adjustments			Restated
ASSETS
Real estate assets, at cost
Property	$	1,149,528		$	(96,757	)	$	1,052,771
Accumulated depreciation	(141,442		)	37,746			(103,696		)
Total real estate assets	1,008,086			(59,011		)	949,075
Investment in real estate partnership	4,419			15,465			19,884
Cash and cash equivalents	3,125			—			3,125
Restricted cash	213			—			213
Escrows and acquisition deposits	6,515			—			6,515
Accrued rents and accounts receivable, net of allowance for doubtful accounts	20,464			—			20,464
Receivable due from related party	—			772			772
Financed receivable due from related party	—			15,473			15,473
Unamortized lease commissions and loan costs	6,911			—			6,911
Prepaid expenses and other assets	10,217			—			10,217
Total assets	$	1,059,950		$	(27,301	)	$	1,032,649

LIABILITIES AND EQUITY
Liabilities:
Notes payable	$	667,595		$	(48,241	)	$	619,354
Accounts payable and accrued expenses	29,157			347			29,504
Payable due to related party	—			1,067			1,067
Tenants’ security deposits	5,769			—			5,769
Dividends and distributions payable	11,628			—			11,628
Total liabilities	714,149			(46,827		)	667,322
Commitments and contingencies:	—			—			—
Equity:
Preferred shares, $0.001 par value per share; 50,000,000 shares authorized; none issued and outstanding as of June 30, 2018	—			—			—
Common shares, $0.001 par value per share; 400,000,000 shares authorized; 39,743,829 issued and outstanding as of June 30, 2018	38			—			38
Additional paid-in capital	524,191			—			524,191
Accumulated deficit	(194,520		)	19,516			(175,004		)
Accumulated other comprehensive gain	6,430			—			6,430
Total Whitestone REIT shareholders’ equity	336,139			19,516			355,655
Noncontrolling interest in subsidiary	9,662			10			9,672
Total equity	345,801			19,526			365,327
Total liabilities and equity	$	1,059,950		$	(27,301	)	$	1,032,649

⁽¹⁾ Previously reported balances are from the Quarterly Report on Form 10-Q for the quarter ended June 30, 2018.



CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
	Unaudited September 30, 2018
	Previously Reported ⁽¹⁾			Adjustments			Restated
ASSETS
Real estate assets, at cost
Property	$	1,146,951		$	(97,636	)	$	1,049,315
Accumulated depreciation	(145,807		)	38,642			(107,165		)
Total real estate assets	1,001,144			(58,994		)	942,150
Investment in real estate partnership	2,770			17,616			20,386
Cash and cash equivalents	9,389			—			9,389
Restricted cash	91			—			91
Escrows and acquisition deposits	7,702			—			7,702
Accrued rents and accounts receivable, net of allowance for doubtful accounts	21,906			(12		)	21,894
Receivable due from related party	—			308			308
Financed receivable due from related party	—			14,473			14,473
Unamortized lease commissions and loan costs	6,847			—			6,847
Prepaid expenses and other assets	10,597			—			10,597
Total assets	$	1,060,446		$	(26,609	)	$	1,033,837

LIABILITIES AND EQUITY
Liabilities:
Notes payable	$	666,624		$	(47,939	)	$	618,685
Accounts payable and accrued expenses	32,846			332			33,178
Payable due to related party	—			1,276			1,276
Tenants’ security deposits	5,920			—			5,920
Dividends and distributions payable	11,600			—			11,600
Total liabilities	716,990			(46,331		)	670,659
Commitments and contingencies:	—			—			—
Equity:
Preferred shares, $0.001 par value per share; 50,000,000 shares authorized; none issued and outstanding as of September 30, 2018	—			—			—
Common shares, $0.001 par value per share; 400,000,000 shares authorized; 39,772,105 issued and outstanding as of September 30, 2018	38			—			38
Additional paid-in capital	525,780			—			525,780
Accumulated deficit	(198,199		)	19,706			(178,493		)
Accumulated other comprehensive gain	7,034			—			7,034
Total Whitestone REIT shareholders’ equity	334,653			19,706			354,359
Noncontrolling interest in subsidiary	8,803			16			8,819
Total equity	343,456			19,722			363,178
Total liabilities and equity	$	1,060,446		$	(26,609	)	$	1,033,837

⁽¹⁾ Previously reported balances are from the Quarterly Report on Form 10-Q for the quarter ended September 30, 2018.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (in thousands, except per share data)

	Unaudited Three Months Ended March 31, 2018
	Previously Reported ⁽¹⁾			Adjustments			Restated

Property revenues
Rental revenues	$	24,946		$	(3,274	)	$	21,672
Other revenues	8,650			(537		)	8,113
Total property revenues	33,596			(3,811		)	29,785

Property expenses
Property operation and maintenance	5,708			(852		)	4,856
Real estate taxes	4,657			(681		)	3,976
Total property expenses	10,365			(1,533		)	8,832

Other expenses (income)
General and administrative	6,314			13			6,327
Depreciation and amortization	7,221			(947		)	6,274
Equity in earnings of real estate partnership	—			(674		)	(674		)
Interest expense	6,501			(528		)	5,973
Interest, dividend and other investment income	(99		)	(158		)	(257		)
Total other expense	19,937			(2,294		)	17,643

Income before gain (loss) on sale or disposal of properties or assets, and income taxes	3,294			16			3,310

Provision for income taxes	(129		)	19			(110		)
Gain on sale of properties	266			(17		)	249
Loss on sale or disposal of assets	(197		)	17			(180		)

Net income	3,234			35			3,269

Redeemable operating partnership units	84			4			88
Non-controlling interests in Consolidated Partnership	122			(122		)	—
Less: Net income attributable to noncontrolling interests	206			(118		)	88

Net income attributable to Whitestone REIT	$	3,028		$	153		$	3,181

⁽¹⁾ Previously reported balances are from the Quarterly Report on Form 10-Q for the quarter ended March 31, 2018.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (in thousands, except per share data)

	Unaudited Three Months Ended March 31, 2018
	Previously Reported ⁽¹⁾		Adjustments			Restated

Basic Earnings Per Share:
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares	$	0.08	$	0.00		$	0.08
Diluted Earnings Per Share:
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares	$	0.07	$	0.01		$	0.08

Weighted average number of common shares outstanding:
Basic	39,066		—			39,066
Diluted	40,088		—			40,088

Distributions declared per common share / OP unit	$	0.2850	$	—		$	0.2850

Consolidated Statements of Comprehensive Income

Net income	$	3,234	$	35		$	3,269

Other comprehensive gain

Unrealized gain on cash flow hedging activities	2,645		—			2,645
Unrealized gain on available-for-sale marketable securities	18		—			18

Comprehensive income	5,897		35			5,932

Less: Net income attributable to noncontrolling interests	206		(118		)	88
Less: Comprehensive gain attributable to noncontrolling interests	71		—			71

Comprehensive income attributable to Whitestone REIT	$	5,620	$	153		$	5,773

⁽¹⁾ Previously reported balances are from the Quarterly Report on Form 10-Q for the quarter ended March 31, 2018.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (in thousands, except per share data)

	Unaudited Three Months Ended June 30, 2018									Unaudited Six Months Ended June 30, 2018
	Previously Reported⁽¹⁾			Adjustments			Restated			Previously Reported ⁽¹⁾			Adjustments			Restated

Property revenues
Rental revenues	$	24,650		$	(3,268	)	$	21,382		$	49,596		$	(6,542	)	$	43,054
Other revenues	8,422			(331		)	8,091			17,072			(868		)	16,204
Total property revenues	33,072			(3,599		)	29,473			66,668			(7,410		)	59,258

Property expenses
Property operation and maintenance	5,838			(821		)	5,017			11,546			(1,673		)	9,873
Real estate taxes	4,485			(580		)	3,905			9,142			(1,261		)	7,881
Total property expenses	10,323			(1,401		)	8,922			20,688			(2,934		)	17,754

Other expenses (income)
General and administrative	6,624			54			6,678			12,938			67			13,005
Depreciation and amortization	7,396			(1,103		)	6,293			14,617			(2,050		)	12,567
Equity in earnings of real estate partnership	—			(586		)	(586		)	—			(1,260		)	(1,260		)
Interest expense	6,854			(541		)	6,313			13,355			(1,069		)	12,286
Interest, dividend and other investment income	(119		)	(165		)	(284		)	(218		)	(323		)	(541		)
Total other expense	20,755			(2,341		)	18,414			40,692			(4,635		)	36,057

Income before gain (loss) on sale or disposal of properties or assets, income taxes, and profit sharing expense	1,994			143			2,137			5,288			159			5,447

Provision for income taxes	(84		)	25			(59		)	(213		)	44			(169		)
Gain on sale of properties	—			—			—			266			(17		)	249
Profit sharing expense	(81		)	81			—			(203		)	203			—
Loss on sale or disposal of assets	(74		)	1			(73		)	(271		)	18			(253		)

Net income	1,755			250			2,005			4,867			407			5,274

Less: Net income attributable to noncontrolling interests	45			6			51			128			10			138

Net income attributable to Whitestone REIT	$	1,710		$	244		$	1,954		$	4,739		$	397		$	5,136

⁽¹⁾ Previously reported balances are from the Quarterly Report on Form 10-Q for the quarter ended June 30, 2018.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (in thousands, except per share data)

	Unaudited Three Months Ended June 30, 2018						Unaudited Six Months Ended June 30, 2018
	Previously Reported ⁽¹⁾		Adjustments		Restated		Previously Reported ⁽¹⁾		Adjustments		Restated

Basic Earnings Per Share:
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares	$	0.04	$	0.01	$	0.05	$	0.12	$	0.01	$	0.13
Diluted Earnings Per Share:
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares	$	0.04	$	0.01	$	0.05	$	0.11	$	0.01	$	0.12

Weighted average number of common shares outstanding:
Basic	39,204		—		39,204		39,136		—		39,136
Diluted	40,679		—		40,679		40,519		—		40,519

Distributions declared per common share / OP unit	$	0.2850	$	—	$	0.2850	$	0.5700	$	—	$	0.5700

Consolidated Statements of Comprehensive Income

Net income	$	1,755	$	250	$	2,005	$	4,867	$	407	$	5,274

Other comprehensive gain

Unrealized gain on cash flow hedging activities	913		—		913		3,558		—		3,558
Unrealized gain on available-for-sale marketable securities	—		—		—		18		—		18

Comprehensive income	2,668		250		2,918		8,443		407		8,850

Less: Net income attributable to noncontrolling interests	45		6		51		128		10		138
Less: Comprehensive gain attributable to noncontrolling interests	23		—		23		94		—		94

Comprehensive income attributable to Whitestone REIT	$	2,600	$	244	$	2,844	$	8,221	$	397	$	8,618

⁽¹⁾ Previously reported balances are from the Quarterly Report on Form 10-Q for the quarter ended June 30, 2018.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (in thousands, except per share data)

	Unaudited Three Months Ended September 30, 2018									Unaudited Nine Months Ended September 30, 2018
	Previously Reported ⁽¹⁾			Adjustments			Restated			Previously Reported ⁽¹⁾			Adjustments			Restated

Property revenues
Rental revenues	$	25,256		$	(3,292	)	$	21,964		$	74,852		$	(9,834	)	$	65,018
Other revenues	9,340			(600		)	8,740			26,412			(1,468		)	24,944
Total property revenues	34,596			(3,892		)	30,704			101,264			(11,302		)	89,962

Property expenses
Property operation and maintenance	6,374			(922		)	5,452			17,920			(2,595		)	15,325
Real estate taxes	5,253			(874		)	4,379			14,395			(2,135		)	12,260
Total property expenses	11,627			(1,796		)	9,831			32,315			(4,730		)	27,585

Other expenses (income)
General and administrative	4,959			23			4,982			17,897			90			17,987
Depreciation and amortization	7,483			(1,006		)	6,477			22,100			(3,056		)	19,044
Equity in earnings of real estate partnership	—			(502		)	(502		)	—			(1,762		)	(1,762		)
Interest expense	6,951			(532		)	6,419			20,306			(1,601		)	18,705
Interest, dividend and other investment income	(84		)	(167		)	(251		)	(302		)	(490		)	(792		)
Total other expense	19,309			(2,184		)	17,125			60,001			(6,819		)	53,182

Income before gain (loss) on sale or disposal of properties or assets, income taxes, and profit sharing expense	3,660			88			3,748			8,948			247			9,195

Provision for income taxes	(115		)	23			(92		)	(328		)	67			(261		)
Gain on sale of properties	4,380			—			4,380			4,646			(17		)	4,629
Profit sharing expense	(73		)	73			—			(276		)	276			—
Loss on sale or disposal of assets	(15		)	12			(3		)	(286		)	30			(256		)

Net income	7,837			196			8,033			12,704			603			13,307

Less: Net income attributable to noncontrolling interests	193			5			198			326			16			342

Net income attributable to Whitestone REIT	$	7,644		$	191		$	7,835		$	12,378		$	587		$	12,965

⁽¹⁾ Previously reported balances are from the Quarterly Report on Form 10-Q for the quarter ended September 30, 2018.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (in thousands, except per share data)

	Unaudited Three Months Ended September 30, 2018						Unaudited Nine Months Ended September 30, 2018
	Previously Reported ⁽¹⁾		Adjustments		Restated		Previously Reported ⁽¹⁾		Adjustments		Restated

Basic Earnings Per Share:
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares	$	0.19	$	0.01	$	0.20	$	0.31	$	0.02	$	0.33
Diluted Earnings Per Share:
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares	$	0.19	$	0.00	$	0.19	$	0.30	$	0.01	$	0.31

Weighted average number of common shares outstanding:
Basic	39,327		—		39,327		39,200		—		39,200
Diluted	40,635		—		40,635		40,541		—		40,541

Distributions declared per common share / OP unit	$	0.2850	$	—	$	0.2850	$	0.8550	$	—	$	0.8550

Consolidated Statements of Comprehensive Income

Net income	$	7,837	$	196	$	8,033	$	12,704	$	603	$	13,307

Other comprehensive gain

Unrealized gain on cash flow hedging activities	605		—		605		4,163		—		4,163
Unrealized gain on available-for-sale marketable securities	—		—		—		18		—		18

Comprehensive income	8,442		196		8,638		16,885		603		17,488

Less: Net income attributable to noncontrolling interests	193		5		198		326		16		342
Less: Comprehensive gain attributable to noncontrolling interests	15		—		15		107		—		107

Comprehensive income attributable to Whitestone REIT	$	8,234	$	191	$	8,425	$	16,452	$	587	$	17,039

⁽¹⁾ Previously reported balances are from the Quarterly Report on Form 10-Q for the quarter ended September 30, 2018.



CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
	Unaudited Three Months Ended March 31, 2018
	Previously Reported⁽¹⁾			Adjustments			Restated
Cash flows from operating activities:
Net income	$	3,234		$	35		$	3,269
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	7,221			(947		)	6,274
Amortization of deferred loan costs	327			(25		)	302
Loss on sale of marketable securities	20			—			20
Loss (gain) on sale or disposal of assets and properties	(69		)	—			(69		)
Bad debt expense	478			(32		)	446
Share-based compensation	1,845			—			1,845
Equity in earnings of real estate partnership	—			(674		)	(674		)
Changes in operating assets and liabilities:
Escrows and acquisition deposits	3,414			(1,055		)	2,359
Accrued rent and accounts receivable	(1,649		)	534			(1,115		)
Receivable due from related party	—			110			110
Distributions from real estate partnership	—			505			505
Unamortized lease commissions	(493		)	90			(403		)
Prepaid expenses and other assets	494			(57		)	437
Accounts payable and accrued expenses	(8,828		)	1,531			(7,297		)
Payable due to related party	—			(980		)	(980		)
Tenants’ security deposits	143			(71		)	72
Net cash provided by operating activities	6,137			(1,036		)	5,101
Cash flows from investing activities:
Additions to real estate	(5,090		)	1,047			(4,043		)
Proceeds from sales of properties	4,433			—			4,433
Investment in real estate partnership	—			—			—
Proceeds from sales of marketable securities	30			—			30
Net cash provided by (used in) investing activities	(627		)	1,047			420
Cash flows from financing activities:
Distributions paid to common shareholders	(11,145		)	—			(11,145		)
Distributions paid to OP unit holders	(309		)	—			(309		)
Distributions paid to noncontrolling interest in Consolidated Partnership	(115		)	115			—
Net proceeds from credit facility	9,000			—			9,000
Repayments of notes payable	(903		)	325			(578		)
Payments of loan origination costs	—			—			—
Repurchase of common shares	(466		)	—			(466		)
Net cash used in financing activities	(3,938		)	440			(3,498		)
Net increase in cash, cash equivalents and restricted cash	1,572			451			2,023
Cash, cash equivalents and restricted cash at beginning of period	8,022			(2,812		)	5,210
Cash, cash equivalents and restricted cash at end of period	$	9,594		$	(2,361	)	$	7,233

⁽¹⁾ Previously reported balances are from the Quarterly Report on Form 10-Q for the quarter ended March 31, 2018.



CONSOLIDATED STATEMENTS OF CASH FLOWS Supplemental Disclosures (in thousands)
	Unaudited Three Months Ended March 31, 2018
	Previously Reported⁽¹⁾		Adjustments			Restated
Supplemental disclosure of cash flow information:
Cash paid for interest	$	6,316	$	(510	)	$	5,806
Non cash investing and financing activities:
Financed insurance premiums	$	1,273	$	—		$	1,273
Value of shares issued under dividend reinvestment plan	$	33	$	—		$	33
Value of common shares exchanged for OP units	$	4	$	—		$	4
Change in fair value of available-for-sale securities	$	18	$	—		$	18
Change in fair value of cash flow hedge	$	2,645	$	—		$	2,645

⁽¹⁾ Previously reported balances are from the Quarterly Report on Form 10-Q for the quarter ended March 31, 2018.



CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
	Unaudited Six Months Ended June 30, 2018
	Previously Reported⁽¹⁾			Adjustments			Restated
Cash flows from operating activities:
Net income	$	4,867		$	407		$	5,274
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	14,617			(2,050		)	12,567
Amortization of deferred loan costs	653			(50		)	603
Loss on sale of marketable securities	20			—			20
Loss (gain) on sale or disposal of assets and properties	5			(1		)	4
Bad debt expense	761			(99		)	662
Share-based compensation	3,246			—			3,246
Equity in earnings of real estate partnership	—			(1,260		)	(1,260		)
Changes in operating assets and liabilities:
Escrows and acquisition deposits	1,401			—			1,401
Accrued rent and accounts receivable	15			(1		)	14
Receivable due from related party	—			232			232
Distributions from real estate partnership	—			505			505
Unamortized lease commissions	(852		)	—			(852		)
Prepaid expenses and other assets	504			2			506
Accounts payable and accrued expenses	(6,370		)	(40		)	(6,410		)
Payable due to related party	—			(612		)	(612		)
Tenants’ security deposits	75			—			75
Net cash provided by operating activities	18,942			(2,967		)	15,975
Cash flows from investing activities:
Additions to real estate	(7,566		)	1,669			(5,897		)
Proceeds from sales of properties	4,433			—			4,433
Investment in real estate partnership	(649		)	649			—
Proceeds from sales of marketable securities	30			—			30
Net cash used in investing activities	(3,752		)	2,318			(1,434		)
Cash flows from financing activities:
Distributions paid to common shareholders	(22,348		)	—			(22,348		)
Distributions paid to OP unit holders	(604		)	—			(604		)
Payments of exchange offer costs	(128		)	—			(128		)
Net proceeds from credit facility	9,000			—			9,000
Repayments of notes payable	(1,923		)	649			(1,274		)
Repurchase of common shares	(1,059		)	—			(1,059		)
Net cash used in financing activities	(17,062		)	649			(16,413		)
Net decrease in cash, cash equivalents and restricted cash	(1,872		)	—			(1,872		)
Cash, cash equivalents and restricted cash at beginning of period	5,210			—			5,210
Cash, cash equivalents and restricted cash at end of period	$	3,338		$	—		$	3,338

⁽¹⁾ Previously reported balances are from the Quarterly Report on Form 10-Q for the quarter ended June 30, 2018.



CONSOLIDATED STATEMENTS OF CASH FLOWS Supplemental Disclosures (in thousands)
	Unaudited Six Months Ended June 30, 2018
	Previously Reported⁽¹⁾		Adjustments			Restated
Supplemental disclosure of cash flow information:
Cash paid for interest	$	12,377	$	(1,022	)	$	11,355
Cash paid for taxes	$	392	$	(88	)	$	304
Non cash investing and financing activities:
Disposal of fully depreciated real estate	$	960	$	(56	)	$	904
Financed insurance premiums	$	1,273	$	—		$	1,273
Value of shares issued under dividend reinvestment plan	$	66	$	—		$	66
Value of common shares exchanged for OP units	$	752	$	—		$	752
Change in fair value of available-for-sale securities	$	18	$	—		$	18
Change in fair value of cash flow hedge	$	3,558	$	—		$	3,558
Reallocation of ownership percentage between parent and subsidiary	$	12	$	—		$	12

⁽¹⁾ Previously reported balances are from the Quarterly Report on Form 10-Q for the quarter ended June 30, 2018.



CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
	Unaudited Nine Months Ended September 30, 2018
	Previously Reported⁽¹⁾			Adjustments			Restated
Cash flows from operating activities:
Net income	$	12,704		$	603		$	13,307
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	22,100			(3,056		)	19,044
Amortization of deferred loan costs	976			(74		)	902
Loss on sale of marketable securities	20			—			20
Loss (gain) on sale or disposal of assets and properties	(4,360		)	(13		)	(4,373		)
Bad debt expense	1,123			(153		)	970
Share-based compensation	4,894			—			4,894
Equity in earnings of real estate partnership	—			(1,762		)	(1,762		)
Changes in operating assets and liabilities:
Escrows and acquisition deposits	214			—			214
Accrued rent and accounts receivable	(1,736		)	12			(1,724		)
Receivable due from related party	—			696			696
Distributions from real estate partnership	—			505			505
Unamortized lease commissions	(1,394		)	(2		)	(1,396		)
Prepaid expenses and other assets	618			1			619
Accounts payable and accrued expenses	(2,924		)	(55		)	(2,979		)
Accounts payable due to related party	—			(403		)	(403		)
Tenants’ security deposits	226			—			226
Net cash provided by operating activities	32,461			(3,701		)	28,760
Cash flows from investing activities:
Acquisitions of real estate	—			—
Additions to real estate	(11,300		)	2,567			(8,733		)
Proceeds from sales of properties	12,574			—			12,574
Proceeds from financed receivable due from related party	—			1,000			1,000
Investment in real estate partnership	843			(843		)	—
Proceeds from sales of marketable securities	30			—			30
Net cash provided by investing activities	2,147			2,724			4,871
Cash flows from financing activities:
Distributions paid to common shareholders	(33,642		)	—			(33,642		)
Distributions paid to OP unit holders	(890		)	—			(890		)
Payments of exchange offer costs	(128		)	—			(128		)
Net proceeds from credit facility	9,000			—			9,000
Repayments of notes payable	(2,949		)	977			(1,972		)
Payments of loan origination costs	(30		)	—			(30		)
Repurchase of common shares	(1,699		)	—			(1,699		)
Net cash used in financing activities	(30,338		)	977			(29,361		)
Net increase in cash, cash equivalents and restricted cash	4,270			—			4,270
Cash, cash equivalents and restricted cash at beginning of period	5,210			—			5,210
Cash, cash equivalents and restricted cash at end of period	$	9,480		$	—		$	9,480

⁽¹⁾ Previously reported balances are from the Quarterly Report on Form 10-Q for the quarter ended September 30, 2018.



CONSOLIDATED STATEMENTS OF CASH FLOWS Supplemental Disclosures (in thousands)
	Unaudited Nine Months Ended September 30, 2018
	Previously Reported⁽¹⁾		Adjustments			Restated
Supplemental disclosure of cash flow information:
Cash paid for interest	$	19,879	$	(1,698	)	$	18,181
Cash paid for taxes	$	392	$	(88	)	$	304
Non cash investing and financing activities:
Disposal of fully depreciated real estate	$	963	$	(59	)	$	904
Financed insurance premiums	$	1,273	$	—		$	1,273
Value of shares issued under dividend reinvestment plan	$	101	$	—		$	101
Value of common shares exchanged for OP units	$	1,545	$	—		$	1,545
Change in fair value of available-for-sale securities	$	18	$	—		$	18
Change in fair value of cash flow hedge	$	4,163	$	—		$	4,163
Reallocation of ownership percentage between parent and subsidiary	$	24	$	—		$	24

⁽¹⁾ Previously reported balances are from the Quarterly Report on Form 10-Q for the quarter ended September 30, 2018.