EX-99.2 3 exhibit992supplementaloper.htm EXHIBIT 99.2 Exhibit
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CORPORATE PROFILE
 
 
 
 
 
 
 
 
 
NYSE: WSR
 
Whitestone REIT (NYSE: WSR) is a self-managed fully integrated real estate investment trust that primarily
Common Shares
 
owns, manages and redevelops high quality retail properties which we refer to as Community Centered
 
 
Properties®. As of March 31, 2019, we wholly owned 51 Community Centered Properties® with
51 Community Centers
 
approximately 4.8 million square feet of gross leasable area, located in six of the top markets in the United States in
4.8 Million Sq. Ft. of gross
 
terms of population growth: Austin, Chicago, Dallas-Fort Worth, Houston, Phoenix and San Antonio.
leasable area
 
Headquarted in Houston, Texas, we were founded in 1998. We also owned an 81.4% interest in 11 properties with
1,344 tenants
 
approximately 1.3 million square feet of gross leasable area through our equity investment in Pillarstone
 
 
Capital REIT Operating Partnership LP (“Pillarstone OP”).
 
 
 
6 Top Growth Markets
 
We focus on value creation in our properties, as we market, lease and manage our properties. We invest in
Austin
 
properties that are or can become Community Centered Properties® from which our tenants deliver needed services
Chicago
 
to the surrounding community. We focus on properties with smaller rental spaces that present opportunities for
Dallas-Fort Worth
 
attractive returns.
Houston
 
 
Phoenix
 
Our strategic efforts target entrepreneurial, service-oriented tenants at each property who provide services to their
San Antonio
 
respective surrounding communities. Operations include an internal management structure providing cost-effective
 
 
services to locally-oriented, smaller space tenants. Multi-cultural community focus sets us apart from traditional
Fiscal Year End
 
commercial real estate operators. We value diversity on our team and maintain in-house leasing, property
12/31
 
management, marketing, construction and maintenance departments with culturally diverse and multi-lingual
 
 
associates who understand the particular needs of our tenants and neighborhoods.
Common Shares &
 
 
Units Outstanding*:
 
We have a diverse tenant base concentrated on service offerings such as specialty retail, grocery, restaurants,
Common Shares: 39.8 Million
 
medical, educational and financial services and entertainment. These tenants tend to occupy smaller spaces (less
Operating Partnership Units:
 
than 3,000 square feet) and, as of March 31, 2019, provided a 46% premium rental rate compared to our larger
     0.9 Million
 
space tenants. The largest of our 1,344 tenants at our wholly owned properties comprised only 2.9% of our
 
 
annualized base rental revenues for the three months ended March 31, 2019.
Distribution (per share / unit):
 
 
 
 
 
 
 
 
Quarter: $ 0.2850
 
Investor Relations:
 
 
 
 
Annualized: $ 1.1400
 
Whitestone REIT
 
 
 
 
 
ICR Inc.
Dividend Yield: 8.9%**
 
Kevin Reed, Director of Investor Relations
 
 
 
Brad Cohen
 
 
2600 South Gessner, Suite 500, Houston, Texas 77063
 
 
 
203.682.8211
Board of Trustees:
 
713.435.2219 email: ir@whitestonereit.com
 
 
Nandita V. Berry
 
website: www.whitestonereit.com
 
 
Donald F. Keating
 
 
 
 
Najeeb A. Khan
 
Analyst Coverage:
 
 
 
 
 
 
Paul T. Lambert
 
B. Riley FBR
 
Boenning & Scattergood
 
JMP Securities
 
Ladenburg Thalmann
Jack L. Mahaffey
 
Craig Kucera
 
Merrill Ross
 
Mitch Germain
 
John J. Massocca
James C. Mastandrea
 
540.277.3366
 
610.862.5328
 
212.906.3546
 
212.409.2543
David F. Taylor
 
ckucera@brileyfbr.com
 
mross@boenninginc.com
 
mgermain@jmpsecurities.com
 
jmassocca@ladenburg.com
Trustee Emeritus:
 
 
 
 
 
 
 
 
Daniel G. DeVos
 
Maxim Group
 
SunTrust Robinson Humphrey
 
 
 
 
 
 
Michael Diana
 
Ki Bin Kim, CFA
 
 
 
 
* As of April 30, 2019
 
212.895.3641
 
212.303.4124
 
 
 
 
** Based on common share price
 
mdiana@maximgrp.com
 
kibin.kim@suntrust.com
 
 
 
 
of $12.83 as of close of market on
 
 
 
 
 
 
 
 
April 30, 2019.
 
 
 
 
 
 
 
 
 
 
We are followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding our performance made by these analysts are theirs alone and do not represent opinions, forecasts or predictions of our management. We do not by our reference above or distribution imply our endorsement of or concurrence with such information, conclusions or recommendations.

1


Whitestone REIT Reports First Quarter 2019 Results
-Upsized Credit Facility to $515 Million-
-Successful Inaugural Private Placement of $100 Million of Senior Unsecured Notes-
-Reaffirms 2019 Full Year Guidance-

HOUSTON, May 1, 2019 - Whitestone REIT (NYSE: WSR) (“Whitestone” or the “Company”) today announced operating and financial results for the first quarter ended March 31, 2019. Whitestone is a pure-play community-centered retail REIT that acquires, owns, manages, develops and redevelops high quality “E-Commerce Resistant” neighborhood, community and lifestyle retail centers principally located in the largest, fastest-growing and most affluent markets in the Sunbelt. Whitestone’s optimal mix of national, regional and local tenants provides daily necessities, needed services and entertainment to the communities in which they are located.

Highlights*
*All per share amounts presented in this news release are on a diluted per common share and operating partnership (“OP”) unit basis unless stated otherwise.
First Quarter 2019 Compared to First Quarter 2018:
•
Net Income attributable to Whitestone REIT was $2.8 million, or $0.07 per share, compared to $3.2 million, or $0.08 per share
•
Annualized Base Rent (“ABR”) per Leased Squared Foot Grows 5.8% to $19.58
•
2.4% same store NOI growth
•
Funds from Operations (“FFO”) reach $9.9 million or $0.24 per share versus $10.1 million or $0.24 per share
•
8.4% increase in rental rates on new and renewal leases on a GAAP basis (trailing twelve months)

Jim Mastandrea, Chairman and Chief Executive Officer of Whitestone REIT commented, “Our team has delivered a positive start to 2019 producing growth in most of our key financial metrics. Our e-commerce resistant model generated a strong increase in same store NOI as we worked to reinvigorate occupancy growth. We also strengthened our capital structure and financial flexibility with the successful closing and upsizing of our credit facility to $515,000,000 and the placement of our first private bond issuance of $100,000,000.  While our cycle-tested experience and business model, focusing on high growth markets, may hit some road bumps from time to time, it provides stability and predictability to achieve our long-term goals. We have confidence that our high quality properties in strong growth markets, management team, and business model will continue to produce improving financial results as we move forward to create additional value for all Whitestone shareholders.”
 
Financial Results
Reconciliations of Net Income to FFO and FFO Core are included herein.
Net Income attributable to Whitestone REIT was $2.8 million, or $0.07 per share, for the first quarter of 2019, compared to $3.2 million, or $0.08 per share, for the same period in 2018. FFO was $9.9 million, or $0.24 per share, for the first quarter of 2019, compared to $10.1 million, or $0.24 per share, for the same period in 2018. FFO Core was $11.8 million, or $0.28 per share, in the first quarter of 2019, compared to $12.7 million, or $0.31 per share, in the same period of 2018.

Operating Results
For the period ending March 31, 2019, the Company’s operating highlights were as follows:
 
Q1-2019
Occupancy:
 
Wholly Owned Properties
90.1%
Same Store Property Net Operating Income Growth
2.4%
Rental Rate Growth - Total (Comparable Leases, GAAP Basis):
7.2%
New Leases
9.3%
Renewal Leases
7.0%
 
 
Leasing Transactions:
 
Number of New Leases
27
New Leases - Total Term Revenue (millions)
$3.5
Number of Renewal Leases
54
Renewal Leases - Total Term Revenue (millions)
$12.3

2



Real Estate Portfolio Update

Community Centered PropertiesTM Portfolio Statistics:

As of March 31, 2019, Whitestone wholly owned 51 Community Centered PropertiesTM with 4.8 million square feet of gross leasable area (“GLA”). The portfolio is comprised of 29 properties in Texas, 27 in Arizona and one in Illinois. Whitestone’s Retail Community Centered PropertiesTM are located in Austin (4), San Antonio (3), Chicago (1), Dallas-Fort Worth (7), Houston (15) and the greater Phoenix metropolitan area (27). In addition to being business friendly, these are five of the top markets in the country in terms of size, economic strength and population growth. 2017 estimates showed the projected 5-year population growth rates for both Austin and Dallas-Fort Worth to be 9.7%, San Antonio to be 8.6%, Houston to be 8.0%, and Phoenix to be 6.6% (1). The Company’s retail properties in these markets are located on the best retail corners embedded in affluent communities. The Company also owns an equity interest in and manages 11 properties containing 1.3 million square feet of GLA through its investment in Pillarstone OP.

At the end of the first quarter, the Company’s diversified tenant base was comprised of approximately 1,344 tenants, with the largest tenant accounting for only 2.9% of annualized base rental revenues. Lease terms range from less than one year for smaller tenants to over 15 years for larger tenants. The Company’s leases generally include minimum monthly lease payments and tenant reimbursements for payment of taxes, insurance and maintenance, and typically exclude restrictive lease clauses.

Leasing Activity:
During the first quarter of 2019, the leasing team signed 81 leases totaling 199,643 square feet in new, expansion and renewal leases, compared to 93 leases totaling 230,983 square feet in the first quarter of 2018. The total lease value was $15.8 million compared to $24.5 million during the same period last year.

The Company’s total operating portfolio occupancy stood at 90.1% at quarter end compared to 90.9% at the end the first quarter 2018.

Balance Sheet and Liquidity

Balance Sheet:

Reflecting the Company’s acquisition and disposition activity during the year and selective development and redevelopment, undepreciated real estate assets increased $2.9 million to $1.055 billion at March 31, 2019 compared to $1.052 billion at March 31, 2018.

Liquidity, Debt and Credit Facility:

On January 31, 2019, the Company closed through its operating partnership, Whitestone REIT Operating Partnership, L.P. (the “Operating Partnership”), a new unsecured credit facility (the “2019 Facility”). The 2019 Facility increased the credit facility to $515 million from $500 million, improved the capitalization rate for the majority of its properties from 7.5% to 7% and reduced overall pricing at the current corporate leverage level by 28 basis points. The 2019 Facility is comprised of the following three tranches:
•
$250.0 million unsecured revolving credit facility with a maturity date of January 1, 2023;
•
$165.0 million unsecured term loan with a maturity date of January 31, 2024; and
•
$100.0 million unsecured term loan with a maturity date of October 30, 2022.

On March 22, 2019, the Company and its Operating Partnership, entered into a Note Purchase and Guarantee Agreement together with certain subsidiary guarantors and The Prudential Insurance Company of America providing for the issuance and sale of $100 million of senior unsecured notes of the Operating Partnership, of which (i) $50 million are designated as 5.09% Series A Senior Notes due March 22, 2029 and (ii) $50 million are designated as 5.17% Series B Senior Notes due March 22, 2029.

At March 31, 2019, 49 of the Company’s wholly-owned 57 properties were unencumbered by mortgage debt, with an undepreciated cost basis of $759.2 million. At March 31, 2019, the Company had total real estate debt of $623.3 million, of which approximately 86% was subject to fixed interest rates. The Company’s weighted average interest rate on all fixed rate debt as of the end of the first quarter was 4.08% and the weighted average remaining term was 6.0 years.

(1) Source: Claritas, as of April 2017.


3


At quarter end, Whitestone had $4.6 million of cash available on its balance sheet and $164.0 million of available capacity under its credit facility.

Dividend

On March 25, 2019, the Company declared a quarterly cash distribution of $0.285 per common share and OP unit for the second quarter of 2019, to be paid in three equal installments of $0.095 in April, May and June of 2019.

2019 Guidance

The Company reaffirms its previously released guidance for 2019 and expects Net income attributable to Whitestone REIT (per share) to be in the range of $0.21 - $0.25; FFO (per share) as defined by NAREIT to be in the range of $0.90 - $0.94; FFO Core as defined by the Company to be in the range of $1.06 - $1.10; and Same Store NOI growth to be in the range of 0.5% - 2%.

Conference Call Information

In conjunction with the issuance of its financial results, you are invited to listen to the Company’s earnings release conference call to be broadcast live on Thursday, May 2, 2019 at 10:00 A.M. Central Time. The call will be led by James C. Mastandrea, Chairman and Chief Executive Officer, and David K. Holeman, Chief Financial Officer. Conference call access information is as follows:

Dial-in number for domestic participants:         (866) 548-4713
Dial-in number for international participants:     (323) 794-2093

The conference call will be recorded and a telephone replay will be available through Thursday, May 16, 2019. Replay access information is as follows:

Replay number for domestic participants:        (844) 512-2921
Replay number for international participants:    (412) 317-6671
Passcode (for all participants):            2847697

To listen to a live webcast of the conference call, click on the Investor Relations tab of the Company’s website, www.whitestonereit.com, and then click on the webcast link. A replay of the call will be available on Whitestone’s website via the webcast link until the Company’s next earnings release. Additional information about Whitestone can be found on the Company’s website.

The first quarter earnings release and supplemental data package will be located in the Investor Relations section of the Company’s website. For those without internet access, the earnings release and supplemental data package will be available by mail upon request. To receive a copy, please call the Company’s Investor Relations line at (713) 435-2219.

Supplemental Financial Information

Supplemental materials and details regarding Whitestone’s results of operations, communities and tenants are available on the Company’s website at www.whitestonereit.com.

Financial Statement Presentation Change

On January 1, 2019, the Company adopted the accounting framework for leases, ASU No. 2016-02, Leases (“Topic 842”). The following is a summary of the presentation changes within the 2019 Consolidated Statement of Operations required by the modified retrospective adoption of the new standard:

•
All income related to tenant leases is reflected in a single “Rental” line item.
•
The impact of bad debt is now a component of the single Rental income line item and is no longer a component of Operating and Maintenance expenses. This change is reflected in 2019 reporting periods but has not been made to 2018 historical results.
•
Real estate taxes paid by certain major tenants directly to the taxing authority are no longer reflected in Rental Income and Real estate tax expense. This change is reflected in 2019 reporting periods but has not been made to 2018 historical results.
 

4


Supplemental footnote support has been provided herein for comparability purposes. The Company’s Net income, Net operating income and Operating FFO were not impacted by these presentation changes.

About Whitestone REIT

Whitestone is a community-centered retail REIT that acquires, owns, manages, develops and redevelops high quality “e-commerce resistant” neighborhood, community and lifestyle retail centers principally located in the largest, fastest-growing and most affluent markets in the Sunbelt. Whitestone’s optimal mix of national, regional and local tenants provides daily necessities, needed services and entertainment to the communities in which they are located. Whitestone’s properties are primarily located in business-friendly Phoenix, Austin, Dallas-Fort Worth, Houston and San Antonio, which are among the fastest growing U.S. population centers with highly educated workforces, high household incomes and strong job growth. Whitestone’s forward-thinking business model has produced industry leading compound annual growth rates in excess of 15% in revenues, property net operating income, funds from operations and net income since its IPO in 2010. For additional information, visit www.whitestonereit.com.

Forward-Looking Statements

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

The following are some of the factors that could cause the Company’s actual results and its expectations to differ materially from those described in the Company’s forward-looking statements: the Company’s ability to meet its long-term goals, its assumptions regarding its earnings guidance, including its ability to execute effectively its acquisition and disposition strategy, to continue to execute its development pipeline on schedule and at the expected costs, and its ability to grow its NOI as expected, which could be impacted by a number of factors, including, among other things, its ability to continue to renew leases or re-let space on attractive terms and to otherwise address its leasing rollover; its ability to successfully identify, finance and consummate suitable acquisitions, and the impact of such acquisitions, including financing developments, capitalization rates and internal rates of return; the Company’s ability to reduce or otherwise effectively manage its general and administrative expenses; the Company’s ability to fund from cash flows or otherwise distributions to its shareholders at current rates or at all; current adverse market and economic conditions; lease terminations or lease defaults; the impact of competition on the Company’s efforts to renew existing leases; changes in the economies and other conditions of the specific markets in which the Company operates; economic, legislative and regulatory changes, the success of the Company’s real estate strategies and investment objectives; the Company’s ability to continue to qualify as a REIT under the Internal Revenue Code of 1986, as amended; risks relating to the restatement of our consolidated financial statements for the first three quarterly periods of 2018 and related legal proceedings; and other factors detailed in the Company’s most recent Annual Report on Form 10-K, and other documents the Company files with the Securities and Exchange Commission from time to time.

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

Non-GAAP Financial Measures

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


5


FFO: Management believes that FFO is a useful measure of the Company’s operating performance. The Company computes FFO as defined by NAREIT, which states that FFO should represent net income available to common shareholders (computed in accordance with GAAP) excluding depreciation and amortization related to real estate, gains or losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held be the entity. FFO does not represent cash flows from operating activities determined in accordance with GAAP and should not be considered an alternative to net income as an indication of the Company’s performance or to cash flow from operations as a measure of liquidity or ability to make distributions and service debt.

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

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

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

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

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

Whitestone REIT Contacts:
Investors Contact:

6


Kevin Reed, Director of Investor Relations
Whitestone REIT
(713) 435-2219
ir@whitestonereit.com


7



Whitestone REIT and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
 
 
 
 
 
March 31, 2019
 
December 31, 2018
 
 
(unaudited)
 
 
ASSETS
Real estate assets, at cost
 
 
 
 
Property
 
$
1,054,889

 
$
1,052,238

Accumulated depreciation
 
(119,288
)
 
(113,300
)
Total real estate assets
 
935,601

 
938,938

Investment in real estate partnership
 
26,138

 
26,236

Cash and cash equivalents
 
4,580

 
13,658

Restricted cash
 
100

 
128

Escrows and acquisition deposits
 
6,386

 
8,211

Accrued rents and accounts receivable, net of allowance for doubtful accounts
 
22,746

 
21,642

Receivable due from related party
 
965

 
394

Financed receivable due from related party
 
5,661

 
5,661

Unamortized lease commissions and loan costs
 
9,228

 
6,698

Prepaid expenses and other assets(1)
 
7,250

 
7,306

Total assets
 
$
1,018,655

 
$
1,028,872

LIABILITIES AND EQUITY
Liabilities:
 
 
 
 
Notes payable
 
$
622,918

 
$
618,205

Accounts payable and accrued expenses(2)
 
29,650

 
33,729

Payable due to related party
 
204

 
58

Tenants' security deposits
 
6,213

 
6,130

Dividends and distributions payable
 
11,617

 
11,600

Total liabilities
 
670,602

 
669,722

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, 2019 and December 31, 2018, respectively
 
—

 
—

Common shares, $0.001 par value per share; 400,000,000 shares authorized; 39,828,745 and 39,778,029 issued and outstanding as of March 31, 2019 and December 31, 2018, respectively
 
40

 
39

Additional paid-in capital
 
528,815

 
527,662

Accumulated deficit
 
(189,938
)
 
(181,361
)
Accumulated other comprehensive gain
 
726

 
4,116

Total Whitestone REIT shareholders' equity
 
339,643

 
350,456

Noncontrolling interest in subsidiary
 
8,410

 
8,694

Total equity
 
348,053

 
359,150

Total liabilities and equity
 
$
1,018,655

 
$
1,028,872





8


Whitestone REIT and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(in thousands)


 
 
March 31, 2019
 
December 31, 2018
 
 
(unaudited)
 
 
(1) Operating lease right of use assets (net) (related to adoption of Topic 842)
 
$
914

 
N/A

(2) Operating lease liabilities (related to adoption of Topic 842)
 
$
916

 
N/A


9

Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
(in thousands)

 
 
 
 
 
 
 
Three Months Ended March 31,
 
 
2019
 
2018
Revenues
 
 
 
 
Rental(1)
 
$
29,033

 
$
29,299

Management, transaction, and other fees
 
661

 
486

Total revenues
 
29,694

 
29,785

 
 
 
 
 
Property expenses
 
 
 
 
Depreciation and amortization
 
6,464

 
6,274

Operating and maintenance
 
4,428

 
4,856

Real estate taxes
 
4,045

 
3,976

General and administrative(2)
 
6,002

 
6,327

Total operating expenses
 
20,939

 
21,433

 
 
 
 
 
Other expenses (income)
 
 
 
 
Interest expense
 
6,533

 
5,973

Gain on sale of properties
 
—

 
(249
)
Loss on sale or disposal of assets
 
2

 
180

Interest, dividend and other investment income
 
(245
)
 
(257
)
Total other expense
 
6,290

 
5,647

 
 
 
 
 
Income from operations before equity investments in real estate partnerships and income tax
 
2,465

 
2,705

 
 
 
 
 
Equity in earnings of real estate partnership
 
492

 
674

Provision for income tax
 
(118
)
 
(110
)
 
 
 
 
 
Net income
 
2,839

 
3,269

 
 
 
 
 
Less: Net income attributable to noncontrolling interests
 
65

 
88

 
 
 
 
 
Net income attributable to Whitestone REIT
 
$
2,774

 
$
3,181




10

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

 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
 
2019
 
2018
Basic Earnings Per Share:
 
 
 
 
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares
 
$
0.07

 
$
0.08

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

 
$
0.08

 
 
 
 
 
Weighted average number of common shares outstanding:
 
 
 
 
Basic
 
39,649

 
39,066

Diluted
 
40,626

 
40,088

 
 
 
 
 
Consolidated Statements of Comprehensive Income
 
 
 
 
 
 
 
 
 
Net income
 
$
2,839

 
$
3,269

 
 
 
 
 
Other comprehensive gain
 
 
 
 
 
 
 
 
 
Unrealized gain (loss) on cash flow hedging activities
 
(3,470
)
 
2,645

Unrealized gain on available-for-sale marketable securities
 
—

 
18

 
 
 
 
 
Comprehensive income (loss)
 
(631
)
 
5,932

 
 
 
 
 
Less: Net income attributable to noncontrolling interests
 
65

 
88

Less: Comprehensive gain (loss) attributable to noncontrolling interests
 
(80
)
 
71

 
 
 
 
 
Comprehensive income (loss) attributable to Whitestone REIT
 
$
(616
)
 
$
5,773


11

Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
(in thousands)


 
 
Three Months Ended March 31,
 
 
2019
 
2018
    (1) Rental
 
 
 
 
        Rental revenues
 
$
21,751

 
$
21,672

        Recoveries
 
7,554

 
7,627

        Bad debt
 
(272
)
 
N/A

        Total rental
 
$
29,033

 
$
29,299


(2) Bad debt (prior to adoption of Topic 842)
 
N/A
 
$
446





12

Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
 
 
Three Months Ended
 
 
March 31,
 
 
2019
 
2018
Cash flows from operating activities:
 
 
 
 
Net income
 
$
2,839

 
$
3,269

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
6,464

 
6,274

Amortization of deferred loan costs
 
237

 
302

Loss on sale of marketable securities
 
—

 
20

Loss (gain) on sale or disposal of assets and properties
 
2

 
(69
)
Bad debt expense
 
272

 
446

Share-based compensation
 
1,883

 
1,845

Equity in earnings of real estate partnership
 
(492
)
 
(674
)
Changes in operating assets and liabilities:
 
 
 
 
Escrows and acquisition deposits
 
1,825

 
2,359

Accrued rents and accounts receivable
 
(1,376
)
 
(1,115
)
Receivable due from related party
 
(571
)
 
110

Distributions from real estate partnership
 
301

 
505

Unamortized lease commissions and loan costs
 
775

 
(403
)
Prepaid expenses and other assets
 
(2,245
)
 
437

Accounts payable and accrued expenses
 
(4,078
)
 
(7,297
)
Payable due to related party
 
146

 
(980
)
Tenants' security deposits
 
83

 
72

Net cash provided by operating activities
 
6,065

 
5,101

Cash flows from investing activities:
 
 
 
 
Additions to real estate
 
(2,455
)
 
(4,043
)
Proceeds from sales of properties
 
—

 
4,433

Proceeds from sales of marketable securities
 
—

 
30

Net cash provided by (used in) investing activities
 
(2,455
)
 
420

Cash flows from financing activities:
 
 
 
 
Distributions paid to common shareholders
 
(11,301
)
 
(11,145
)
Distributions paid to OP unit holders
 
(264
)
 
(309
)
Payments of exchange offer costs
 
(6
)
 
—

Proceeds from bonds payable
 
100,000

 
—

Net proceeds from (payments to) credit facility
 
(90,200
)
 
9,000

Repayments of notes payable
 
(6,202
)
 
(578
)
Payments of loan origination costs
 
(3,981
)
 
—

Repurchase of common shares
 
(762
)
 
(466
)
Net cash used in financing activities
 
(12,716
)
 
(3,498
)
 
 
 
 
 
Net increase (decrease) in cash, cash equivalents and restricted cash
 
(9,106
)
 
2,023

Cash, cash equivalents and restricted cash at beginning of period
 
13,786

 
5,210

Cash, cash equivalents and restricted cash at end of period
 
$
4,680

 
$
7,233


13

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

 
 
Three Months Ended
 
 
March 31,
 
 
2019
 
2018
Supplemental disclosure of cash flow information:
 
 
 
 
Cash paid for interest
 
$
6,268

 
$
5,806

Non cash investing and financing activities:
 
 
 
 
Disposal of fully depreciated real estate
 
$
89

 
$
—

Financed insurance premiums
 
$
1,238

 
$
1,273

Value of shares issued under dividend reinvestment plan
 
$
34

 
$
33

Value of common shares exchanged for OP units
 
$
5

 
$
4

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

 
$
18

Change in fair value of cash flow hedge
 
$
(3,470
)
 
$
2,645



14


Whitestone REIT and Subsidiaries
RECONCILIATION OF NON-GAAP MEASURES
(in thousands, except per share and per unit data)
 
 
Three Months Ended
 
 
March 31,
FFO (NAREIT) AND FFO CORE
 
2019
 
2018
Net income attributable to Whitestone REIT
 
$
2,774

 
$
3,181

  Adjustments to reconcile to FFO:
 
 
 
 
Depreciation and amortization of real estate
 
6,395

 
6,207

Depreciation and amortization of real estate assets of real estate partnership (pro rata)
 
621

 
695

(Gain) loss on sale or disposal of assets and properties
 
2

 
(69
)
Gain on sale or disposal of properties or assets of real estate partnership (pro rata)
 
3

 
—

Net income attributable to noncontrolling interests
 
65

 
88

FFO (NAREIT)
 
9,860

 
10,102

  Adjustments to reconcile to FFO Core:
 
 
 
 
Share-based compensation expense
 
1,951

 
1,908

Proxy contest professional fees
 
—

 
680

FFO Core
 
$
11,811

 
$
12,690

 
 
 
 
 
FFO PER SHARE AND OP UNIT CALCULATION
 
 
 
 
Numerator:
 
 
 
 
FFO
 
$
9,860

 
$
10,102

Distributions paid on unvested restricted common shares
 
(41
)
 
(41
)
FFO excluding amounts attributable to unvested restricted common shares
 
$
9,819

 
$
10,061

FFO Core excluding amounts attributable to unvested restricted common shares
 
$
11,770

 
$
12,649

Denominator:
 
 
 
 
Weighted average number of total common shares - basic
 
39,649

 
39,066

Weighted average number of total noncontrolling OP units - basic
 
928

 
1,083

Weighted average number of total common shares and noncontrolling OP units - basic
 
40,577

 
40,149

 
 
 
 
 
Effect of dilutive securities:
 
 
 
 
Unvested restricted shares
 
977

 
1,022

Weighted average number of total common shares and noncontrolling OP units - diluted
 
41,554

 
41,171

 
 
 
 
 
FFO per common share and OP unit - basic
 
$
0.24

 
$
0.25

FFO per common share and OP unit - diluted
 
$
0.24

 
$
0.24

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

 
$
0.32

FFO Core per common share and OP unit - diluted
 
$
0.28

 
$
0.31


Whitestone REIT and Subsidiaries
RECONCILIATION OF NON-GAAP MEASURES
(continued)
(in thousands)


 
 
Three Months Ended
 
 
March 31,
PROPERTY NET OPERATING INCOME
 
2019
 
2018
Net income attributable to Whitestone REIT
 
$
2,774

 
$
3,181

General and administrative expenses
 
6,002

 
6,327

Depreciation and amortization
 
6,464

 
6,274

Equity in earnings of real estate partnership
 
(492
)
 
(674
)
Interest expense
 
6,533

 
5,973

Interest, dividend and other investment income
 
(245
)
 
(257
)
Provision for income taxes
 
118

 
110

Gain on sale of properties
 
—

 
(249
)
Management fee, net of related expenses
 
(8
)
 
(53
)
Loss on disposal of assets
 
2

 
180

NOI of real estate partnership (pro rata)
 
1,759

 
2,032

Net income attributable to noncontrolling interests
 
65

 
88

NOI
 
$
22,972

 
$
22,932



 
 
Three Months Ended
 
 
March 31,
EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION
 
2019
 
2018
 
 
 
 
 
Net income attributable to Whitestone REIT
 
$
2,774

 
$
3,181

Depreciation and amortization
 
6,464

 
6,274

Equity in earnings of real estate partnership
 
(492
)
 
(674
)
Interest expense
 
6,533

 
5,973

Provision for income taxes
 
118

 
110

Gain on sale of properties
 
—

 
(249
)
Loss on disposal of assets
 
2

 
180

Management fee, net of related expenses
 
(8
)
 
(53
)
EBITDA adjustments for real estate partnership
 
1,671

 
1,956

Net income attributable to noncontrolling interests
 
65

 
88

EBITDA
 
$
17,127

 
$
16,786




15


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

 
 
Three Months Ended
 
 
 
 
 
 
March 31,
 
Increase
 
% Increase
 
 
2019
 
2018
 
(Decrease)
 
(Decrease)
Same Store(1) (49 properties excluding development land)
 
 
 
 
 
 
 
 
Property revenues
 
 
 
 
 
 
 
 
Rental
 
$
29,033

 
$
29,010

 
$
23

 
—
 %
Management, transaction and other fees
 
428

 
229

 
199

 
87
 %
Total property revenues
 
29,461

 
29,239

 
222

 
1
 %
 
 
 
 
 
 
 
 
 
Property expenses
 
 
 
 
 
 
 
 
Property operation and maintenance
 
4,178

 
4,565

 
(387
)
 
(8
)%
Real estate taxes
 
4,045

 
3,939

 
106

 
3
 %
Total property expenses
 
8,223

 
8,504

 
(281
)
 
(3
)%
 
 
 
 
 
 
 
 
 
Total same store net operating income
 
21,238

 
20,735

 
503

 
2
 %
 
 
 
 
 
 
 
 
 
Non-Same Store(2) (4 Properties excluding development land)
 
 
 
 
 
 
 
 
Property revenues
 
 
 
 
 
 
 
 
Lease revenues
 
—

 
289

 
(289
)
 
Not meaningful

Management, transaction and other fees
 
—

 
2

 
(2
)
 
Not meaningful

Total property revenues
 
—

 
291

 
(291
)
 
Not meaningful

 
 
 
 
 
 
 
 
 
Property expenses
 
 
 
 
 
 
 
 
Property operation and maintenance
 
25

 
89

 
(64
)
 
Not meaningful

Real estate taxes
 
—

 
37

 
(37
)
 
Not meaningful

Total property expenses
 
25

 
126

 
(101
)
 
Not meaningful

 
 
 
 
 
 
 
 
 
Total Non-Same Store net operating income
 
(25
)
 
165

 
(190
)
 
Not meaningful

 
 
 
 
 
 
 
 
 
Pro rata share of real estate partnership
 
1,759

 
2,032

 
(273
)
 
(13
)%
 
 
 
 
 
 
 
 
 
Total property net operating income
 
22,972

 
22,932

 
40

 
—
 %
 
 
 
 
 
 
 
 
 
Less total other expenses, excluding pro rata share of real estate partnership net operating income, provision for income taxes, gain on sale of properties and gain (loss) on disposal of assets
 
20,133

 
19,663

 
470

 
2
 %
 
 
 
 
 
 
 
 
 
Net income
 
$
2,839

 
$
3,269

 
$
(430
)
 
(13
)%




16


(1) 
We define “Same Stores” as properties that have been owned during the entire period being compared. For purposes of comparing the three months ended March 31, 2019 to the three months ended March 31, 2018, Same Stores include properties owned before January 1, 2018 and not sold before March 31, 2019.

(2) 
We define “Non-Same Stores” as properties that have been acquired since the beginning of the period being compared and properties that have been sold, but not classified as discontinued operations. For purposes of comparing the three months ended March 31, 2019 to the three months ended March 31, 2018, Non-Same Stores include properties acquired between January 1, 2018 and March 31, 2019 and properties sold between January 1, 2018 and March 31, 2019, but not included in discontinued operations.


17


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

 
 
Three Months Ended
 
 
March 31,
 
 
2019
 
2018
Other Financial Information:(1)
 
 
 
 
 
 
 
 
 
Tenant improvements (2)
 
$
562

 
$
832

Leasing commissions (2)
 
$
458

 
$
468

Maintenance capital
 
$
969

 
$
1,037

Scheduled debt principal payments
 
$
521

 
$
589

Straight line rent income
 
$
538

 
$
434

Market rent amortization income from acquired leases
 
$
261

 
$
246

Non-cash share-based compensation expense
 
$
1,951

 
$
1,908

Non-real estate depreciation and amortization
 
$
69

 
$
67

Amortization of loan fees
 
$
257

 
$
322

Acquisition costs
 
$
—

 
$
—

Undepreciated value of unencumbered properties
 
$
778,762

 
$
753,683

Number of unencumbered properties
 
49

 
48

Full time employees
 
97

 
101


(1)
Includes pro-rata share attributable to real estate partnership.

(2) 
Does not include first generation costs needed for new acquisitions, development or redevelopment of a property to bring the property to operating standards for its intended use.



18


Whitestone REIT and Subsidiaries
MARKET CAPITALIZATION AND SELECTED RATIOS
(in thousands, except per share amounts and percentages)
 
 
As of March 31, 2019
MARKET CAPITALIZATION:
 
Percent of Total Equity
 
Total Market Capitalization
 
Percent of Total Market Capitalization
Equity Capitalization:
 
 
 
 
 
 
Common shares outstanding
 
97.7
%
 
39,829

 
 
Operating partnership units outstanding
 
2.3
%
 
928

 
 
Total
 
100.0
%
 
40,757

 
 
 
 
 
 
 
 
 
Market price of common shares as of
 
 
 
 
 
 
March 29, 2019
 
 
 
$
12.02

 
 
 
 
 
 
 
 
 
Total equity capitalization
 
 
 
489,899

 
44
%
 
 
 
 
 
 
 
Debt Capitalization:
 
 
 
 
 
 
Outstanding debt
 
 
 
$
624,290

 
 
Less: Cash and cash equivalents
 
 
 
(4,580
)
 
 
Total debt capitalization
 
 
 
619,710

 
56
%
 
 
 
 
 
 
 
Total Market Capitalization as of
 
 
 
 
 
 
March 31, 2019
 
 
 
$
1,109,609

 
100
%


SELECTED RATIOS:
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
March 31,
INTEREST COVERAGE RATIO
 
2019
 
2018
EBITDA/Interest Expense
 
 
 
 
EBITDA
 
$
17,127

 
$
16,786

 
 
 
 
 
Interest expense
 
6,533

 
5,973

Pro rata share of interest expense from real estate partnership
 
424

 
543

Less: amortization of loan fees
 
(257
)
 
(322
)
Interest expense, excluding amortization of loan fees
 
6,700

 
6,194

 
 
 
 
 
Ratio of EBITDA to interest expense
 
2.6

 
2.7

 
 
 
 
 


19


Whitestone REIT and Subsidiaries
MARKET CAPITALIZATION AND SELECTED RATIOS
(continued)
(in thousands, except per share amounts and percentages)
 
 
 
LEVERAGE RATIO
 
March 31,
 
 
2019
 
2018
Debt/Undepreciated Book Value
 
 
 
 
Outstanding debt
 
$
624,290

 
$
621,419

Less: Cash
 
(4,580
)
 
(6,976
)
Add: Proportional share of net debt of real estate partnership
 
33,705

 
39,812

Outstanding debt after cash
 
$
653,415

 
$
654,255

 
 
 
 
 
Undepreciated real estate assets
 
$
1,054,889

 
$
1,051,984

Add: Proportional share of real estate from unconsolidated partnership
 
63,876

 
68,723

Undepreciated real estate assets
 
$
1,118,765

 
$
1,120,707

Ratio of debt to real estate assets
 
58
%
 
58
%

 
 
Three Months Ended
 
 
March 31,
 
 
2019
 
2018
Debt/EBITDA Ratio
 
 
 
 
Outstanding debt
 
$
624,290

 
$
621,419

Less: Cash
 
(4,580
)
 
(6,976
)
Add: Proportional share of net debt of unconsolidated real estate partnership
 
33,705

 
39,812

Total Net Debt
 
$
653,415

 
$
654,255

 
 
 
 
 
EBITDA
 
$
17,127

 
$
16,786

Share based compensation
 
1,951

 
1,908

Proxy contest costs
 
—

 
680

EBITDA, adjusted
 
$
19,078

 
$
19,374

 
 
 
 
 
Pro forma annualized EBITDA, adjusted (1)
 
$
76,312

 
$
77,496

 
 
 
 
 
Ratio of debt to pro forma EBITDA, adjusted
 
8.6
 
8.4

(1) 
Pro forma annualized EBITDA, adjusted represents pro forma quarterly EBITDA, adjusted multiplied by four.


20


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

Description
 
March 31, 2019
 
December 31, 2018
Fixed rate notes
 
 
 
 
$10.5 million, LIBOR plus 2.00% Note, due September 24, 2020 (1)
 
$
9,440

 
$
9,500

$50.0 million, 1.75% plus 1.35% to 1.90% Note, due October 30, 2020 (2)
 
—

 
50,000

$50.0 million, 1.50% plus 1.35% to 1.90% Note, due January 29, 2021 (3)
 
—

 
50,000

$100.0 million, 3.33% Note, due October 30, 2022 (4)
 
100,000

 
100,000

$165.0 million, 2.24% plus 1.35% to 1.90% Note, due January 31, 2024 (5)
 
165,000

 
—

$80.0 million, 3.72% Note, due June 1, 2027
 
80,000

 
80,000

$6.5 million 3.80% Note, due January 1, 2019
 
—

 
5,657

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

 
19,000

$20.2 million 4.28% Note, due June 6, 2023
 
18,900

 
18,996

$14.0 million 4.34% Note, due September 11, 2024
 
13,658

 
13,718

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

 
14,300

$15.1 million 4.99% Note, due January 6, 2024
 
14,583

 
14,643

$2.6 million 5.46% Note, due October 1, 2023
 
2,419

 
2,430

$50.0 million, 5.09% Note, due March 22, 2029
 
50,000

 
—

$50.0 million, 5.17% Note, due March 22, 2029
 
50,000

 
—

$1.2 million 4.35% Note, due November 28, 2019
 
990

 
—

Floating rate notes
 
 
 
 
Unsecured line of credit, LIBOR plus 1.40% to 1.90%, due January 1, 2023(6)
 
86,000

 
241,200

Total notes payable principal
 
624,290

 
619,444

Less deferred financing costs, net of accumulated amortization
 
(1,372
)
 
(1,239
)
Total notes payable
 
$
622,918

 
$
618,205



(1)
Promissory note includes an interest rate swap that fixed the interest rate at 3.55% for the duration of the term through September 24, 2018 and 4.85% beginning September 24, 2018 through September 24, 2020.

(2)
Promissory note includes an interest rate swap that fixed the LIBOR portion 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 at 1.50%.

(4) 
Promissory note includes an interest rate swap that fixed the interest rate at 1.73% for the duration of the term through January 31, 2019 and 3.33% beginning January 31, 2019 through October 30, 2022.

(5)
Promissory note includes an interest rate swap that fixed the LIBOR portion of the interest rate at an average rate of 2.24% for the duration of the term through January 31, 2024.

(6) 
Unsecured line of credit includes certain Pillarstone Properties as of December 31, 2018.


21


SCHEDULE OF DEBT MATURITIES AS OF MARCH 31, 2019
(in thousands)

Year
 
Amount Due
 
 
 
2019
 
$
2,044

2020
 
10,801

2021
 
1,611

2022
 
101,683

2023
 
113,863

Thereafter
 
394,288

Total
 
$
624,290



22


Whitestone REIT and Subsidiaries
SUMMARY OF OCCUPANCY AND TOP TENANTS

 
 
Gross Leasable Area as of
 
Occupancy % as of
 
 
March 31,
 
March 31,
 
December 31,
 
September 30,
 
June 30,
Community Centered Properties®
 
2019
 
2019
 
2018
 
2018
 
2018
Whitestone
 
4,841,660

 
90
%
 
90
%
 
92
%
 
91
%
 
 
 
 
 
 
 
 
 
 
 
Unconsolidated real estate partnership
 
1,307,930

 
79
%
 
80
%
 
80
%
 
77
%
 


23



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

Tenant Name(1)
 
Location
 
Annualized Rental Revenue (in thousands)
 
Percentage of Total Annualized Base Rental Revenues (2)
 
Initial Lease Date
 
Year Expiring
 
 
 
 
 
 
 
 
 
 
 
Safeway Stores Incorporated (3)
 
Austin, Houston and Phoenix
 
$
2,447

 
2.9
%
 
11/14/1982, 5/8/1991, 7/1/2000, 4/1/2014, 4/1/2014 and 10/19/16
 
2020, 2020, 2021, 2022, 2024 and 2034
Whole Foods Market
 
Houston
 
2,042

 
2.4
%
 
9/3/2014
 
2035
Frost Bank
 
Houston
 
1,872

 
2.2
%
 
7/1/2014
 
2024
Newmark Real Estate of Houston LLC
 
Houston
 
1,188

 
1.4
%
 
10/1/2015
 
2026
Walgreens & Co. (4)
 
Houston and Phoenix
 
946

 
1.1
%
 
11/14/1982, 11/2/1987, 8/24/1996 and 11/3/1996
 
2022, 2027, 2049 and 2056
Verizon Wireless (5)
 
Houston and Phoenix
 
883

 
1.1
%
 
8/16/1994, 2/1/2004, 5/10/2004, 1/27/2006 and 5/1/2014
 
2019, 2019, 2022, 2023 and 2024
Bashas’ Inc. (6)
 
Phoenix
 
823

 
1.0
%
 
10/9/2004 and 4/1/2009
 
2024 and 2029
Alamo Drafthouse Cinema
 
Austin
 
690

 
0.8
%
 
2/1/2012
 
2027
Dollar Tree (7)
 
Houston and Phoenix
 
604

 
0.7
%
 
8/10/1999, 6/29/2001, 11/8/2009, 12/17/2009, and 5/21/2013
 
2020, 2021, 2023, 2025 and 2027
Wells Fargo & Company (8)
 
Phoenix
 
553

 
0.7
%
 
10/24/1996 and 4/16/1999
 
2022 and 2023
Kroger Co.
 
Dallas
 
483

 
0.6
%
 
12/15/2000
 
2022
Ruth’s Chris Steak House Inc.
 
Phoenix
 
466

 
0.6
%
 
1/1/1991
 
2030
Regus Corporation
 
Houston
 
434

 
0.5
%
 
5/23/2014
 
2025
Paul’s Ace Hardware
 
Phoenix
 
427

 
0.5
%
 
3/1/2008
 
2023
Original Ninfas LP
 
Houston
 
395

 
0.5
%
 
8/29/2018
 
2029
 
 
 
 
$
14,253

 
17.0
%
 
 
 
 

(1) 
Excludes Pillarstone OP owned properties.

(2) 
Annualized Base Rental Revenues represents the monthly base rent as of March 31, 2019 for each applicable tenant multiplied by 12.



24


(3) 
As of March 31, 2019, we had six 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 approximately 1.2% 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 approximately 0.4% 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 approximately 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 2022, was $318,000, which represents approximately 0.4% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on October 19, 2016, and is scheduled to expire in 2020, was $425,000, which represents approximately 0.5% of our total annualized base rental revenue.

(4) 
As of March 31, 2019, we had four leases with the same tenant occupying space at properties located in Phoenix and Houston. The annualized rental revenue for the lease that commenced on November 3, 1996, and is scheduled to expire in 2049, was $279,000, which represents approximately 0.3% 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 $189,000, which represents approximately 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 2022, was $181,000, which represents approximately 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on August 24, 1996, and is scheduled to expire in 2056, was $298,000, which represents approximately 0.4% of our total annualized rental revenue.

(5) 
As of March 31, 2019, we had five leases with the same tenant occupying space at properties located in Phoenix and Houston. The annualized rental revenue for the lease that commenced on August 16, 1994, and is scheduled to expire in 2019, was $21,000, which represents less than 0.1% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on January 27, 2006, and is scheduled to expire in 2023, was $132,000, which represents approximately 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on February 1, 2004, and is scheduled to expire in 2019, was $43,000, which represents less than 0.1% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on May 1, 2014, and is scheduled to expire in 2024, was $681,000, which represents approximately 0.8% of our total annualized rental revenue. The annualized rental revenue for the lease that commenced on May 10, 2004, and is scheduled to expire in 2022, was $6,000, which represents less than 0.1% of our total annualized base rental revenue.

(6) 
As of March 31, 2019, 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 approximately 0.1% 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 approximately 0.8% of our total annualized base rental revenue.

(7) 
As of March 31, 2019, 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 August 10, 1999, and is scheduled to expire in 2025, was $88,000, which represents approximately 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 approximately 0.1% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on June 29, 2001, and is scheduled to expire in 2021, was $145,000, which represents approximately 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on May 21, 2013, and is scheduled to expire in 2023, was $110,000, which represents approximately 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 2027, was $151,000, which represents approximately 0.2% of our total annualized base rental revenue.

(8) 
As of March 31, 2019, 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 2022, was $131,000, which represents approximately 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 2023, was $421,000, which represents approximately 0.5% of our total annualized base rental revenue.



25


Whitestone REIT and Subsidiaries
SUMMARY OF LEASING ACTIVITY

 
 
Three Months Ended
 
 
March 31,
 
 
2019
 
2018
RENEWALS
 
 
 
 
Number of Leases
 
54

 
59

Total Square Feet (1)
 
145,924

 
145,989

Average Square Feet
 
2,702

 
2,474

Total Lease Value
 
$
12,314,000

 
$
15,374,000

NEW LEASES
 
 
 
 
Number of Leases
 
27

 
34

Total Square Feet (1)
 
53,719

 
84,994

Average Square Feet
 
1,990

 
2,500

Total Lease Value
 
$
3,512,000

 
$
9,168,000

TOTAL LEASES
 
 
 
 
Number of Leases
 
81

 
93

Total Square Feet (1)
 
199,643

 
230,983

Average Square Feet
 
2,465

 
2,484

Total Lease Value
 
$
15,826,000

 
$
24,542,000


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


26


Whitestone REIT and Subsidiaries
SUMMARY OF LEASING ACTIVITY

Type
 
Number of Leases Signed
 
Lease Value Signed
 
GLA Signed
 
Weighted Average Lease Term (2)
 
TI and Incentives (3)
 
TI and Incentives per Sq. Ft.
 
Contractual Rent Per Sq. Ft. (4)
 
Prior Contractual Rent Per Sq. Ft. (5)
 
Annual Increase (Decrease) in Contractual Rent
 
Cash Basis Increase (Decrease) Over Prior Rent
 
Annual Increase (Decrease) in Straight-lined Rent
 
Straight-lined Basis Increase (Decrease) Over Prior Rent
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Comparable: (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Comparable Total Leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2019
 
63

 
$
13,356,942

 
159,291

 
3.9

 
$
249,511

 
$
1.57

 
$
19.74

 
$
19.95

 
$
(32,649
)
 
(1.0
)%
 
$
217,369

 
7.2
%
4th Quarter 2018
 
61

 
15,206,873

 
121,337

 
4.3

 
627,521

 
5.17

 
24.51

 
25.10

 
(70,929
)
 
(2.4
)%
 
136,272

 
4.5
%
3rd Quarter 2018
 
48

 
12,293,596

 
106,582

 
4.8

 
730,548

 
6.85

 
22.48

 
21.86

 
66,514

 
2.8
 %
 
337,129

 
15.5
%
2nd Quarter 2018
 
44

 
6,742,884

 
101,947

 
3.5

 
160,900

 
1.58

 
16.18

 
15.86

 
32,477

 
2.0
 %
 
130,890

 
8.3
%
Total - 12 months
 
216

 
$
47,600,295

 
489,157

 
4.1

 
$
1,768,480

 
$
3.62

 
$
20.78

 
$
20.79

 
$
(4,587
)
 
—
 %
 
$
821,660

 
8.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Comparable New Leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2019
 
10

 
$
1,075,361

 
18,798

 
2.7

 
$
69,722

 
$
3.71

 
$
16.48

 
$
16.24

 
$
4,567

 
1.5
 %
 
$
25,723

 
9.3
%
4th Quarter 2018
 
14

 
2,925,718

 
26,354

 
4.5

 
297,589

 
11.29

 
23.06

 
23.11

 
(221
)
 
(0.2
)%
 
40,334

 
6.9
%
3rd Quarter 2018
 
12

 
2,915,358

 
21,239

 
5.1

 
218,481

 
10.29

 
24.81

 
29.56

 
(100,996
)
 
(16.1
)%
 
1,686

 
0.3
%
2nd Quarter 2018
 
9

 
2,276,805

 
19,045

 
5.3

 
80,156

 
4.21

 
18.95

 
18.15

 
15,162

 
4.4
 %
 
40,356

 
12.2
%
Total - 12 months
 
45

 
$
9,193,242

 
85,436

 
4.4

 
$
665,948

 
$
7.79

 
$
21.13

 
$
22.10

 
$
(81,488
)
 
(4.4
)%
 
$
108,099

 
6.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
 
 
 
 
 
 
 
Comparable Renewal Leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2019
 
53

 
$
12,281,581

 
140,493

 
4.1

 
$
179,789

 
$
1.28

 
$
20.18

 
$
20.44

 
$
(37,217
)
 
(1.3
)%
 
$
191,646

 
7.0
%
4th Quarter 2018
 
47

 
12,281,155

 
94,983

 
4.2

 
329,932

 
3.47

 
24.91

 
25.66

 
(70,708
)
 
(2.9
)%
 
95,938

 
4.0
%
3rd Quarter 2018
 
36

 
9,378,238

 
85,343

 
4.7

 
512,067

 
6.00

 
21.91

 
19.94

 
167,510

 
9.9
 %
 
335,443

 
20.3
%
2nd Quarter 2018
 
35

 
4,466,079

 
82,902

 
3.1

 
80,744

 
0.97

 
15.54

 
15.33

 
17,315

 
1.4
 %
 
90,534

 
7.3
%
Total - 12 months
 
171

 
$
38,407,053

 
403,721

 
4.0

 
$
1,102,532

 
$
2.73

 
$
20.70

 
$
20.51


$
76,900

 
0.9
 %
 
$
713,561

 
8.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

27


Whitestone REIT and Subsidiaries
SUMMARY OF LEASING ACTIVITY
(continued)
Type
 
Number of Leases Signed
 
Lease Value Signed
 
GLA Signed
 
Weighted Average Lease Term (2)
 
TI and Incentives (3)
 
TI and Incentives per Sq. Ft.
 
Contractual Rent Per Sq. Ft. (4)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New & Renewal
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2019
 
81

 
$
15,825,899

 
199,643

 
3.9

 
$
688,431

 
$
3.45

 
$
19.11

 
 
 
 
 
 
 
 
 
 
4th Quarter 2018
 
75

 
17,683,294

 
146,239

 
4.4

 
819,513

 
5.60

 
23.89

 
 
 
 
 
 
 
 
 
 
3rd Quarter 2018
 
75

 
23,780,866

 
170,944

 
5.2

 
2,520,155

 
14.74

 
22.66

 
 
 
 
 
 
 
 
 
 
2nd Quarter 2018
 
65

 
16,679,049

 
179,274

 
4.7

 
625,455

 
3.49

 
16.51

 
 
 
 
 
 
 
 
 
 
Total - 12 months
 
296

 
$
73,969,108

 
696,100

 
4.6

 
$
4,653,554

 
$
6.69

 
$
20.26

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2019
 
27

 
$
3,511,673

 
53,719

 
3.8

 
$
508,249

 
$
9.46

 
$
17.65

 
 
 
 
 
 
 
 
 
 
4th Quarter 2018
 
28

 
5,402,139

 
51,256

 
4.8

 
489,581

 
9.55

 
21.99

 
 
 
 
 
 
 
 
 
 
3rd Quarter 2018
 
39

 
14,402,628

 
85,601

 
5.7

 
2,008,088

 
23.46

 
23.41

 
 
 
 
 
 
 
 
 
 
2nd Quarter 2018
 
30

 
12,212,970

 
96,372

 
6.2

 
544,711

 
5.65

 
17.35

 
 
 
 
 
 
 
 
 
 
Total - 12 months
 
124

 
$
35,529,410

 
286,948

 
5.3

 
$
3,550,629

 
$
12.37

 
$
20.04

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Renewal
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2019
 
54

 
$
12,314,226

 
145,924

 
4.0

 
$
180,182

 
$
1.23

 
19.64

 
 
 
 
 
 
 
 
 
 
4th Quarter 2018
 
47

 
12,281,155

 
94,983

 
4.2

 
329,932

 
3.47

 
24.91

 
 
 
 
 
 
 
 
 
 
3rd Quarter 2018
 
36

 
9,378,238

 
85,343

 
4.7

 
512,067

 
6.00

 
21.91

 
 
 
 
 
 
 
 
 
 
2nd Quarter 2018
 
35

 
4,466,079

 
82,902

 
3.1

 
80,744

 
0.97

 
15.54

 
 
 
 
 
 
 
 
 
 
Total - 12 months
 
172

 
$
38,439,698

 
409,152

 
4.0

 
$
1,102,925

 
$
2.70

 
$
20.42

 
 
 
 
 
 
 
 
 
 

(1) 
Comparable leases represent leases signed on spaces for which there was a former tenant within the last twelve months and the new or renewal square footage was within 25% of the expired square footage.
(2) 
Weighted average lease term is determined on the basis of square footage.
(3) 
Estimated amount per signed lease. Actual cost of construction may vary.
(4) 
Contractual rent represents contractual minimum rent under the new lease for the first month, excluding concessions.
(5) 
Prior contractual rent represents contractual minimum rent under the prior lease for the final month.


28


Whitestone REIT and Subsidiaries
LEASE EXPIRATIONS(1) 

 
 
 
 
 
 
 
 
Annualized Base Rent(2)
 
 
 
 
Gross Leasable Area
 
as of March 31, 2019
Year
 
Number of
Leases
 
Square Feet
 
Percent
of Gross Leasable Area
 
Amount
(in thousands)
 
Percent of
Total
 
Per Square Foot
2019
 
301

 
452,793

 
9.4
%
 
$
9,576

 
11.4
%
 
$
21.15

2020
 
237

 
802,312

 
16.6
%
 
13,263

 
15.8
%
 
16.53

2021
 
202

 
518,918

 
10.7
%
 
10,148

 
12.1
%
 
19.56

2022
 
180

 
649,895

 
13.4
%
 
11,764

 
14.0
%
 
18.10

2023
 
156

 
478,345

 
9.9
%
 
9,775

 
11.7
%
 
20.44

2024
 
114

 
555,523

 
11.5
%
 
9,672

 
11.5
%
 
17.41

2025
 
44

 
167,796

 
3.5
%
 
3,746

 
4.5
%
 
22.32

2026
 
26

 
181,004

 
3.7
%
 
3,628

 
4.3
%
 
20.04

2027
 
26

 
173,391

 
3.6
%
 
3,467

 
4.1
%
 
20.00

2028
 
20

 
94,951

 
2.0
%
 
2,288

 
2.7
%
 
24.10

Total
 
1,306

 
4,074,928

 
84.3
%
 
$
77,327

 
92.1
%
 
$
18.98


(1) 
Lease expirations table reflects rents in place as of March 31, 2019, and does not include option periods.

(2) 
Annualized Base Rent represents the monthly base rent as of March 31, 2019 for each tenant multiplied by 12.


29


Whitestone REIT and Subsidiaries
2019 FINANCIAL GUIDANCE
 
 
Projected Range
 
 
Full Year 2019
 
 
Low
 
High
Net income attributable to Whitestone REIT
 
$
0.21

 
$
0.25

 
 
 
 
 
Adjustments to reconcile net income to FFO(1):
 
 
 
 
Depreciation expense, amortization, gain on disposal of assets
 
0.69

 
0.69

(Gain) loss on sale or disposal of assets or properties
 
—

 
—

Net income attributable to redeemable operating partnership
 
—

 
—

    FFO
 
$
0.90

 
$
0.94

 
 
 
 
 
Adjustments to reconcile FFO to FFO Core:
 
 
 
 
Share based compensation expense
 
0.16

 
0.16

     FFO Core
 
$
1.06

 
$
1.10

 
 
 
 
 
Same Store NOI Growth
 
0.50
%
 
2.00
%
Occupancy
 
90.0
%
 
92.0
%
Average interest rate on all debt
 
4.3
%
 
4.3
%
Weighted average shares and OP units
 
42,357

 
42,327


(1) Includes pro-rata share attributable to real estate in unconsolidated partnership.

Note: Guidance reflects management’s view of current and future market conditions, as well as the earnings impact of events referenced in our earnings release and supplemental data package. This guidance does not include the operational or capital impact of any future unannounced acquisition or disposition activity. Estimates involve numerous assumptions such as rental income, interest rates, tenant default, occupancy rates, expenses, the consolidation of the Company’s non-wholly owned portfolio of non-retail assets and numerous other factors, and excludes potential future acquisitions and dispositions, acquisition and disposition transaction income and expenses and professional service fees. Not all of the factors are determinable at this time and actual results may vary from the projected results, and may be above or below the range indicated. We will update our guidance, on a quarterly basis, or more often as needed, reflecting the impact of acquisition volume and other factors.

30


 
Whitestone REIT and Subsidiaries
Property Details
As of March 31, 2019
 
 
Community Name
 
 
 
Location
 
 
Year Built/
Renovated
 
Gross Leasable
Square Feet
 
Percent
Occupied at
3/31/2019
 
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)
Whitestone Properties:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ahwatukee Plaza
 
Phoenix
 
1979
 
72,650

 
86
%
 
$
802

 
$
12.84

 
$
12.76

Anthem Marketplace
 
Phoenix
 
2000
 
113,293

 
96
%
 
1,750

 
16.09

 
15.62

Bissonnet Beltway
 
Houston
 
1978
 
29,205

 
85
%
 
347

 
13.98

 
13.65

BLVD Place
 
Houston
 
2014
 
216,944

 
98
%
 
8,575

 
40.33

 
43.26

The Citadel
 
Phoenix
 
2013
 
28,547

 
93
%
 
479

 
18.04

 
15.88

City View Village
 
San Antonio
 
2005
 
17,870

 
100
%
 
507

 
28.37

 
28.82

Davenport Village
 
Austin
 
1999
 
128,934

 
100
%
 
3,341

 
25.91

 
25.76

Desert Canyon
 
Phoenix
 
2000
 
62,533

 
93
%
 
823

 
14.15

 
14.60

Eldorado Plaza
 
Dallas
 
2004
 
221,577

 
98
%
 
3,204

 
14.76

 
15.43

Fountain Hills
 
Phoenix
 
2009
 
111,289

 
83
%
 
1,563

 
16.92

 
17.04

Fountain Square
 
Phoenix
 
1986
 
118,209

 
88
%
 
1,868

 
17.96

 
17.38

Fulton Ranch Towne Center
 
Phoenix
 
2005
 
120,575

 
86
%
 
1,846

 
17.80

 
17.94

Gilbert Tuscany Village
 
Phoenix
 
2009
 
49,415

 
100
%
 
967

 
19.57

 
18.81

Gilbert Tuscany Village Hard Corner
 
Phoenix
 
2009
 
14,603

 
100
%
 
124

 
8.49

 
8.91

Heritage Trace Plaza
 
Dallas
 
2006
 
70,431

 
93
%
 
1,451

 
22.15

 
22.23

Headquarters Village
 
Dallas
 
2009
 
89,134

 
86
%
 
2,221

 
28.97

 
29.53

Keller Place
 
Dallas
 
2001
 
93,541

 
95
%
 
895

 
10.07

 
11.10

Kempwood Plaza
 
Houston
 
1974
 
91,302

 
95
%
 
1,039

 
11.98

 
12.37

La Mirada
 
Phoenix
 
1997
 
147,209

 
85
%
 
2,643

 
21.12

 
22.31

Lion Square
 
Houston
 
2014
 
117,592

 
90
%
 
1,442

 
13.63

 
13.25

The Marketplace at Central
 
Phoenix
 
2012
 
111,130

 
99
%
 
1,012

 
9.20

 
8.86

Market Street at DC Ranch
 
Phoenix
 
2003
 
242,459

 
92
%
 
4,381

 
19.64

 
19.73

Mercado at Scottsdale Ranch
 
Phoenix
 
1987
 
118,730

 
86
%
 
1,622

 
15.89

 
16.18

Paradise Plaza
 
Phoenix
 
1983
 
125,898

 
92
%
 
1,499

 
12.94

 
13.41

Parkside Village North
 
Austin
 
2005
 
27,045

 
100
%
 
816

 
30.17

 
30.46

Parkside Village South
 
Austin
 
2012
 
90,101

 
100
%
 
2,407

 
26.71

 
26.83

Pima Norte
 
Phoenix
 
2007
 
35,110

 
68
%
 
428

 
17.93

 
18.62

Pinnacle of Scottsdale
 
Phoenix
 
1991
 
113,108

 
100
%
 
2,435

 
21.53

 
21.84

Pinnacle Phase II
 
Phoenix
 
2017
 
27,063

 
100
%
 
668

 
24.68

 
26.51

The Promenade at Fulton Ranch
 
Phoenix
 
2007
 
98,792

 
83
%
 
1,310

 
15.98

 
17.34

Providence
 
Houston
 
1980
 
90,327

 
77
%
 
806

 
11.59

 
11.62

Quinlan Crossing
 
Austin
 
2012
 
109,892

 
95
%
 
2,353

 
22.54

 
23.80

Seville
 
Phoenix
 
1990
 
90,042

 
73
%
 
2,211

 
33.64

 
34.37

Shaver
 
Houston
 
1978
 
21,926

 
94
%
 
294

 
14.26

 
14.17

Shops at Pecos Ranch
 
Phoenix
 
2009
 
78,767

 
80
%
 
1,688

 
26.79

 
26.17

Shops at Starwood
 
Dallas
 
2006
 
55,385

 
92
%
 
1,528

 
29.99

 
29.69

The Shops at Williams Trace
 
Houston
 
1985
 
132,991

 
98
%
 
2,010

 
15.42

 
15.98

South Richey
 
Houston
 
1980
 
69,928

 
97
%
 
729

 
10.75

 
11.07

Spoerlein Commons
 
Chicago
 
1987
 
41,455

 
83
%
 
649

 
18.86

 
20.74

Starwood Phase II
 
Dallas
 
2016
 
35,351

 
78
%
 
969

 
35.14

 
38.40

The Strand at Huebner Oaks
 
San Antonio
 
2000
 
73,920

 
98
%
 
1,596

 
22.03

 
22.78

SugarPark Plaza
 
Houston
 
1974
 
95,032

 
100
%
 
1,186

 
12.48

 
16.70

Sunridge
 
Houston
 
1979
 
49,359

 
79
%
 
424

 
10.87

 
10.59

Sunset at Pinnacle Peak
 
Phoenix
 
2000
 
41,530

 
82
%
 
634

 
18.62

 
18.26

Terravita Marketplace
 
Phoenix
 
1997
 
102,733

 
50
%
 
1,190

 
23.17

 
22.34

Town Park
 
Houston
 
1978
 
43,526

 
97
%
 
958

 
22.69

 
21.22

Village Square at Dana Park
 
Phoenix
 
2009
 
323,026

 
87
%
 
6,226

 
22.15

 
21.81

Westchase
 
Houston
 
1978
 
50,332

 
86
%
 
652

 
15.06

 
14.74

Williams Trace Plaza
 
Houston
 
1983
 
129,222

 
94
%
 
1,854

 
15.26

 
15.68

Windsor Park
 
San Antonio
 
2012
 
196,458

 
97
%
 
1,906

 
10.00

 
9.78

Woodlake Plaza
 
Houston
 
1974
 
106,169

 
71
%
 
1,229

 
16.30

 
16.09

Total/Weighted Average - Whitestone Properties
 
 
 
 
 
4,841,660

 
90
%
 
83,557

 
19.18

 
19.58

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Land Held for Development:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Anthem Marketplace
 
Phoenix
 
N/A
 
—

 
—

 
$
—

 
$
—

 
$
—

BLVD Phase II-B
 
Houston
 
N/A
 
—

 
—

 
—

 
—

 
—

Dana Park Development
 
Phoenix
 
N/A
 
—

 
—

 
—

 
—

 
—

Eldorado Plaza Development
 
Dallas
 
N/A
 
—

 
—

 
—

 
—

 
—

Fountain Hills
 
Phoenix
 
N/A
 
—

 
—

 
—

 
—

 
—

Market Street at DC Ranch
 
Phoenix
 
N/A
 
—

 
—

 
—

 
—

 
—

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

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Grand Total/Weighted Average - Whitestone Properties
 
 
 
 
 
4,841,660

 
90
%
 
$
83,557

 
$
19.18

 
$
19.58

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Properties owned in Unconsolidated Real Estate Partnership (81.4% ownership):
 
 
 
  
 
 
 
  
 
  
 
 
9101 LBJ Freeway
 
Dallas
 
1985
 
125,874

 
62
%
 
$
1,197

 
$
15.34

 
$
15.39

Corporate Park Northwest
 
Houston
 
1981
 
174,359

 
80
%
 
1,771

 
12.70

 
13.26

Corporate Park West
 
Houston
 
1999
 
175,665

 
77
%
 
1,578

 
11.67

 
11.86

Corporate Park Woodland
 
Houston
 
2000
 
99,937

 
89
%
 
1,024

 
11.51

 
11.76

Corporate Park Woodland II
 
Houston
 
2000
 
14,344

 
100
%
 
238

 
16.59

 
16.68

Holly Hall Industrial Park
 
Houston
 
1980
 
90,000

 
67
%
 
561

 
9.30

 
9.70

Holly Knight
 
Houston
 
1984
 
20,015

 
95
%
 
388

 
20.41

 
21.34

Interstate 10 Warehouse
 
Houston
 
1980
 
151,000

 
80
%
 
677

 
5.60

 
5.53

Plaza Park
 
Houston
 
1982
 
105,530

 
71
%
 
616

 
8.22

 
8.18

Uptown Tower
 
Dallas
 
1982
 
253,981

 
78
%
 
3,815

 
19.26

 
20.16

Westgate Service Center
 
Houston
 
1984
 
97,225

 
100
%
 
738

 
7.59

 
8.06

Total/Weighted Average - Unconsolidated Properties
 
 
 
 
 
1,307,930

 
79
%
 
$
12,603

 
$
12.20

 
$
12.57



(1)   
Calculated as the tenant’s actual March 31, 2019 base rent (defined as cash base rents including abatements) multiplied by 12. Excludes vacant space as of March 31, 2019. 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 March 31, 2019 equaled approximately $115,000 for the month ended March 31, 2019.
 
(2)   
Calculated as annualized base rent divided by leased square feet as of March 31, 2019.  

(3) 
Represents (i) the contractual base rent for leases in place as of March 31, 2019, 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 March 31, 2019.

(4) 
As of March 31, 2019, these parcels of land were held for development and, therefore, had no gross leasable area.


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