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| CORPORATE PROFILE |
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| NYSE-Amex: WSR | | Whitestone REIT (NYSE-Amex: WSR) is a fully integrated real estate investment trust that owns, |
| Class B Common Shares | | operates and re-develops Community Centered Properties TM, which are visibly located properties in |
| Listed 8/25/2010 | | established or developing, culturally diverse neighborhoods. As of March 31, 2011, we owned |
| | | 38 Community Centered Properties TM with approximately 3.2 million square feet of leasable space, |
| 38 Community Centers | | located in five of the top markets in the USA in terms of population growth: Houston, Dallas, San |
| 3.2 Million GLA | | Antonio, Phoenix and Chicago. Headquartered in Houston, Texas, we were founded in 1998. |
| 788 Tenants | | |
| | | We focus on value-creation in our properties, as we market, lease and manage our properties. We |
| 5 Top Growth Markets | | invest in properties that are or can become Community Centered Properties TM from which our |
| Houston | | tenants deliver needed services to the surrounding community. We focus on niche properties with |
| Dallas | | smaller rental spaces that present opportunities for attractive returns. |
| San Antonio | | |
| Phoenix | | Our strategic efforts target entrepreneurial tenants at each property who provide services to their |
| Chicago | | respective surrounding community. Operations include an internal management structure, providing |
| | | cost-effective service to locally-oriented smaller space tenants. Multi-cultural community focus sets |
| Fiscal Quarter End | | us apart from traditional commercial real estate operators. We value diversity on our team and maintain |
| 03/31 | | in-house leasing, property management, marketing, construction and maintenance departments with |
| | | culturally diverse and multi-lingual associates who understand the particular needs of our tenants |
| Common Shares & | | and neighborhoods. |
| Units Outstanding: | | |
| Class B Common: 7.5 Million* | | We have a diverse tenant base concentrated on service offerings such as medical, education and |
| Class A Common: 3.5 Million | | casual dining. These tenants tend to occupy smaller spaces (less than 3,000 square feet) and, as of |
| Operating Partnership Units: | | March 31, 2011, provided a 56% premium rental rate compared to our larger space tenants. The |
| 1.8 Million | | largest of our 788 tenants comprises less than 2.0% of our revenues. |
| | | |
| Dividend (per share / unit): | | | | | | |
| Quarter $0.2850 | | Investor Relations: | | | | |
| Annualized $1.14 | | Whitestone REIT | | | | |
| Dividend Yield 9.0%** | | Anne I. Gregory, Vice President, Investor Relations & Marketing |
| | | 2600 South Gessner Suite 500, Houston, Texas 77036 | | |
| Board of Trusteees: | | 713.435.2221 email: ir@whitestonereit.com | | |
| James C. Mastandrea | | | | |
| Daryl J. Carter | | ICR Inc. - Brad Cohen 203.682.8211 | | |
| Daniel G. DeVos | | | | |
| Donald F. Keating | | website: www.whitestonereit.com | | |
| Jack L. Mahaffey | | | | | | |
| | | Analyst Coverage: | | | | |
| * As of May 12, 2011 | | BMO Capital Markets Corp. | | J.J.B. Hilliard, W.L. Lyons, LLC | | Wunderlich Securities, Inc. |
| | | Paul Adornato, CFA | | Carol L. Kemple | | Merril Ross |
| | | 212.885.4170 | | 502.588.1839 | | 703.669.9255 |
| ** Based on share price of | | Paul.Adornato@bmo.com | | ckemple@hilliard.com | | mross@wundernet.com |
| $12.60 as of May 12, 2011 | | | | | | |
| | | Newest Acquisitions: | | | | |
PRESS RELEASE
Contact Whitestone REIT:
Anne Gregory, Vice President Marketing & Investor Relations
(713) 435 2221 ir@whitestonereit.com
WHITESTONE REIT ANNOUNCES
OPERATING RESULTS FOR FIRST QUARTER 2011
2011 Highlights
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• | FFO Year-Over-Year Increased 7.6%; Net Income for 1st Quarter was $246,000 |
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• | Adds Third Arizona Property at Below Replacement Cost |
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• | Company Raises $60 Million For Growth |
Houston, Texas, May 16, 2011 - Whitestone REIT (NYSE-Amex: WSR - "Whitestone"), a fully integrated real estate company that owns, operates and re-develops Community Centered PropertiesTM, which are visibly located in established or developing culturally diverse neighborhoods, announced its financial results for first quarter ended March 31, 2011.
James C. Mastandrea, Whitestone's Chairman and Chief Executive Officer, commented, “Our focus on service-oriented tenants in multi-cultural communities that lease space in our Community Centered Properties, helped drive the 7.6% increase in our Funds From Operations in the first quarter as compared to the same period a year ago. Our small space business model supports the rent premiums we receive on spaces that are less than 3,000 square feet continues to support our internal growth. With our strong leasing efforts and a growing pipeline of acquisitions, we are poised for additional growth during 2011. We recently raised over $60 million and expect to deploy that capital by purchasing community centers that fit our long-term growth objectives while increasing our near term cash flows. Our focus remains on acquiring additional value-add opportunities at or below replacement cost in growth markets as we seek to build shareholder value over the long-term.”
Highlights: First Quarter 2011 Compared to First Quarter 2010:
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• | Funds From Operations (FFO) increased 7.6%, or $149,000 to $2.1 million versus $2.0 million for the same period in 2010. FFO per diluted common share and Operating Partnership unit (“OP unit”) was $0.29, as compared to $0.38 per diluted common share and OP unit for the same period in 2010. The decrease in FFO per diluted common share and OP unit is a result of additional common shares issued in August of 2010. |
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• | Property net operating income (“NOI”) increased 7.5% to $5.1 million versus $4.8 million for the same period in 2010. |
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• | Net income attributable to Whitestone REIT was $185,000, or $0.03 per diluted common share, compared to $217,000 or $0.06 per diluted common share for the same period in 2010. |
During the quarter, the Board of Trustees declared a quarterly cash dividend of $0.285 per common share and OP unit, payable in three equal installments of $0.095 in April, May and June 2011. The Board of Trustees has declared, in a separate release today, the next quarterly cash dividend of $0.285 per common share and OP unit payable in three equal installments of $0.095 in July, August, and September 2011. Based on the closing price on May 12, 2011 of $12.60 per share, the dividend represents an annual yield of approximately 9.0%.
Leasing Highlights: First Quarter 2011 Compared to First Quarter 2010 and Year-end 2010:
The Company's Operating Portfolio Occupancy Rate at March 31, 2011 was 84%, an increase of 2% from March 31, 2010 and a decrease of 2% from December 31, 2010 due to a non renewal of a 42,000 square foot grocery store and the closure of a Blockbuster store, both of which were located in Houston. The Company is currently in negotiations to re-lease spaces to prospective tenants.
The Company defines Operating Portfolio Occupancy Rate as physical occupancy on all properties excluding new acquisitions and properties which are undergoing significant redevelopment or re-tenanting. Total physical property occupancy, which includes properties under re-development, undergoing significant re-tenanting and recent acquisitions, was 82% as of March 31, 2011.
The Company signed 218,000 square feet in new and renewal leases during the quarter ended March 31, 2011, primarily with tenants that required less than 3,000 square feet in multi-cultural neighborhoods, which allows for premium rents.
The Company experienced robust leasing activity during the first quarter of 2011 as represented by:
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• | a 45% increase in the number of new and renewal leases signed: 80 in 2011 versus 55 in 2010; |
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• | 57% growth in the square footage of new and renewal leases signed: 218,000 square feet for 2011 versus 139,000 square feet in 2010; and |
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• | the signing of a 9,910 square foot lease at The Citadel in Scottsdale, Arizona with The BICE Group for a new upscale restaurant. The current transformation of the 28,545 Community Center includes plans to add new office and retail specialty service tenants who cater to the local community needs. Upon occupancy by BICE, which is expected to occur in the second quarter of 2011, the occupancy rate at The Citadel will increase from its current level of 21% to 56%. |
Community Centered PropertiesTM Portfolio Statistics
Whitestone currently owns 39 Community Centered PropertiesTM with approximately 3.2 million square feet of leasable space located in five of the top markets in the USA in terms of population growth: Houston, Dallas, San Antonio, Phoenix and Chicago.
The Company's strategic efforts target entrepreneurial tenants who provide services to their respective surrounding community. These tenants tend to occupy smaller spaces (less than 3,000 square feet), and as of March 31, 2011, provide a 56% premium rental rate compared to Whitestone's larger space tenants. The Company currently services 788 tenants. No single tenant accounted for more than 2% of the Company's annualized revenue as of March 31, 2011.
Balance Sheet
Whitestone maintains liquidity and financial flexibility in cash balances and unmortgaged properties. The Company had 14 unencumbered properties as of March 31, 2011, with an undepreciated cost basis of $62 million. Whitestone's total undepreciated value of real estate assets and indebtedness were $206 million and $104 million, respectively, as of March 31, 2011.
The Company has no real estate debt maturing prior to 2013, and as of March 31, 2011, 76% of the Company's total indebtedness was fixed-rate debt. The blended interest rate for the Company's debt was 5.6% as of March 31, 2011. For the first quarter of 2011, the Company's interest coverage ratio (EBITDA/Interest Expense) was 2.6:1.
Subsequent to First Quarter 2011
In April 2011, the Company purchased Desert Canyon Shopping Center in McDowell Mountain Ranch, located in Scottsdale, Arizona. This was Whitestone's third off-market acquisition in the Phoenix area since September 2010. The Center, which contains 62,533 leasable square feet, inclusive of 12,960 square feet leased to two tenants under ground leases, was purchased out of foreclosure for $3.65 million, or $58 per leasable square foot. The amount paid is significantly below the Center's replacement cost. Occupancy at Desert Canyon Shopping Center at closing was 65%, and in-place annualized base rental revenues were approximately $450,000 at the time of purchase. The Company is also entitled to recover the operating expenses from the majority of the existing tenants. The Company expects to further increase the value of this investment through lease-up and the implementation of our business model.
On May 10, 2011, Whitestone received net proceeds of approximately $60.0 million through a public offering of 5.3 million Class B common shares (including 310,000 shares pursuant to the exercise of the underwriters' over-allotment option) at a price to the public of $12.00 per share. Whitestone intends to use the net proceeds to (1) acquire commercial properties in the Company's target markets directly from owners or by acquiring loans with the intent to acquire the underlying property through foreclosure or deed in lieu of foreclosure within a short time, (2) to redevelop and re-tenant existing properties to create Whitestone-branded Community Centered PropertiesTM and (3) for general corporate purposes.
Supplemental Financial Information
Further details regarding Whitestone REIT's results of operations, communities and tenants can be accessed at the Company's website at www.whitestonereit.com.
Listen via Webcast
Interested parties can listen to the call live on the internet through the Investor Relations section of the Company's website, www.whitestonereit.com, using the News/Events/Press Releases tab. The call is also accessible via telephone by dialing 1-(877) 407-0784 for domestic participants or 1-(201) 689-8560 for international participants and entering the passcode 371712. Listeners should go to the website at least 15 minutes prior to the call to download and install any necessary audio software. Those dialing in should call in at least five to ten minutes prior to the start.
The conference call will be recorded and a telephone replay will be available through May 30, 2011, by dialing 1-(877) 870-5176 for domestic participants or 1-(858) 384-5517 for international participants and entering the passcode 371712. Additionally, a replay of the call will be available on the Company's website until its next earnings release.
The earnings release and supplemental data package will be located in the Investor Relations section of the website on the News/Events/Press Releases tab. For those without internet access, the first quarter 2011 earnings release and supplemental financial package will be available by mail upon request. To receive a copy, please call the Company's Investor Relations line at (713) 435-2221.
About Whitestone REIT
Whitestone REIT (NYSE-Amex: WSR) is a fully integrated real estate company that owns, operates and re-develops Community Centered PropertiesTM, which are visibly located properties in established or developing culturally diverse neighborhoods. Whitestone focuses on value-creation in its Community Centers, as it markets, leases and manages its Centers to match tenants with the shared needs of surrounding neighborhoods. Operations are structured for providing cost-effective service to local service-oriented smaller space tenants (less than 3,000 square feet). Whitestone has a diverse tenant base concentrated on service offerings including medical, education and casual dining. The largest of its 788 tenants comprises less than 2% of its rental revenues. Headquartered in Houston, Texas and founded in 1998, the Company is internally managed with a portfolio of commercial properties in Texas, Arizona and Illinois. For additional information about the Company, please visit www.whitestonereit.com. The Investor Relations section of the Company's website has links to SEC filings, news releases, financial reports and investor newsletters.
Forward-Looking Statements
Certain statements contained in this press release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We intend for all such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable. Such information is subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology, such as "may," "will," "expect," "intend," "anticipate," "believe," "continue" or similar words or phrases that are predictions of future events or trends and which do not relate solely to historical matters. Examples of such statements in this press release include, but are not limited to, the strength of the Company's leasing portfolio and lease renewal activities; the Company's anticipated net income, depreciation and amortization and FFO-Core.
The following are some of the factors that could cause the Company's actual results and its expectations to differ materially from those described in the Company's forward-looking statements: the Company's ability to successfully identify and consummate suitable acquisitions; current adverse market and economic conditions; lease terminations or lease defaults; the impact of competition on the Company's efforts to renew existing leases; changes in the economies and other conditions of the specific markets in which the Company operates; economic and regulatory changes; the success of the Company's real estate strategies and investment objectives; the Company's ability to continue to qualify as a REIT under the Internal Revenue Code; and other factors detailed in our most recent Annual Report on Form 10-K, quarterly reports on Form 10-Q and other documents we file with the Securities and Exchange Commission.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. We cannot guarantee the accuracy of any such forward-looking statements contained in this press release, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Non-GAAP Financial Measures
This release contains the supplemental non-GAAP financial measures of FFO, FFO-Core and NOI. Following are definitions and reconciliations of these metrics to their most comparable GAAP metric.
FFO: Management believes that FFO is a useful measure of the Company's operating performance. The Company computes FFO as defined by the National Association of Real Estate Investment Trusts, or NAREIT, which states FFO should represent net income (loss) before noncontrolling interest (computed in accordance with GAAP) plus real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and joint ventures and excluding gains on the sale of property. Further, 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 Operating Partnership units for the periods presented. 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. In addition, management believes that FFO provides useful information to the investment community about the Company's financial performance when compared to other REITs since FFO is generally recognized as the industry standard for reporting the operations of REITs.
FFO-Core: Management believes that the computation of FFO in accordance with NAREIT's definition includes certain items that are not indicative of the results provided by the Company's operating portfolio and affect the comparability of the Company's period-over-period performance. These items include, but are not limited to, gains and losses on insurance claim settlements and acquisition costs.
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). Other REITs may use different methodologies for calculating NOI, and accordingly, the Company's NOI may not be comparable to other REITs. Because NOI excludes general and administrative expenses, depreciation and amortization, involuntary conversion, interest expense, interest income, provision for income taxes and loss on sale or disposition of assets, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact to operations from trends in occupancy rates, rental rates and operating costs, providing perspective not immediately apparent from net income. The Company uses NOI to evaluate its operating performance since NOI allows the Company to evaluate the impact that 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 and loss on sale or disposition of assets, the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company's properties.
EBITDA: Management believes that EBITDA is an appropriate supplemental measure of operating performance to net income attributable to Whitestone REIT. The Company defines EBITDA as operating revenues (rental and other revenues) less property and related expenses (property operation and maintenance and real estate taxes) and general and administrative expenses. Other REITs may use different methodologies for calculating EBITDA, and accordingly, the Company's EBITDA may not be comparable to other REITs. 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, interest income, provision for income taxes and loss on sale or disposition of assets, the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company's properties.
Whitestone REIT and Subsidiaries
CONSOLIDATED BALANCE SHEETS
( in thousands, except share data)
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| | | | | | | | |
| | | March 31, 2011 | | December 31, 2010 |
| | | (unaudited) | | |
| ASSETS |
| Real estate assets, at cost | | | | |
| Property | | $ | 205,966 | | | $ | 204,954 | |
| Accumulated depreciation | | (41,168 | ) | | (39,556 | ) |
| Total real estate assets | | 164,798 | | | 165,398 | |
| Cash and cash equivalents | | 18,334 | | | 17,591 | |
| Marketable securities | | 995 | | | — | |
| Escrows and acquisition deposits | | 1,456 | | | 4,385 | |
| Accrued rents and accounts receivable, net of allowance for doubtful accounts | | 5,195 | | | 4,726 | |
| Unamortized lease commissions and loan costs | | 3,476 | | | 3,598 | |
| Prepaid expenses and other assets | | 1,140 | | | 747 | |
| Total assets | | $ | 195,394 | | | $ | 196,445 | |
| LIABILITIES AND EQUITY |
| Liabilities: | | | | |
| Notes payable | | $ | 103,760 | | | $ | 100,941 | |
| Accounts payable and accrued expenses | | 5,212 | | | 7,292 | |
| Tenants' security deposits | | 1,815 | | | 1,796 | |
| Dividends and distributions payable | | 2,133 | | | 2,133 | |
| Total liabilities | | 112,920 | | | 112,162 | |
| Commitments and contingencies: | | | | |
| Equity: | | | | |
| Preferred shares, $0.001 par value per share; 50,000,000 shares authorized; none issued and | | | | |
| outstanding at March 31, 2011 and December 31, 2010, respectively | | — | | | — | |
| Class A common shares, $0.001 par value per share; 50,000,000 shares authorized; 3,471,157 | | | | |
| and 3,471,187 issued and outstanding as of March 31, 2011 and December 31, 2010, respectively | | 3 | | | 3 | |
| Class B common shares, $0.001 par value per share; 350,000,000 shares authorized; | | | | |
| 2,200,000 issued and outstanding as of March 31, 2011 and December 31, 2010, respectively | | 2 | | | 2 | |
| Additional paid-in capital | | 93,386 | | | 93,357 | |
| Accumulated deficit | | (32,035 | ) | | (30,654 | ) |
| Total Whitestone REIT shareholders' equity | | 61,356 | | | 62,708 | |
| Noncontrolling interest in subsidiary | | 21,118 | | | 21,575 | |
| Total equity | | 82,474 | | | 84,283 | |
| Total liabilities and equity | | $ | 195,394 | | | $ | 196,445 | |
Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
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| | | | | | | | |
| | | Three Months Ended March 31, |
| | | 2011 | | 2010 |
| Property revenues | | | | |
| Rental revenues | | $ | 6,671 | | | $ | 6,404 | |
| Other revenues | | 1,415 | | | 1,305 | |
| Total property revenues | | 8,086 | | | 7,709 | |
| | | | | |
| Property expenses | | | | |
| Property operation and maintenance | | 1,954 | | | 1,801 | |
| Real estate taxes | | 1,020 | | | 1,152 | |
| Total property expenses | | 2,974 | | | 2,953 | |
| | | | | |
| Other expenses (income) | | | | |
| General and administrative | | 1,464 | | | 1,200 | |
| Depreciation and amortization | | 1,989 | | | 1,734 | |
| Interest expense | | 1,402 | | | 1,407 | |
| Interest, dividend and other investment income | | (60 | ) | | (7 | ) |
| Total other expense | | 4,795 | | | 4,334 | |
| | | | | |
| Income from continuing operations before loss on disposal of assets | | | | |
| and income taxes | | 317 | | | 422 | |
| | | | | |
| Provision for income taxes | | (53 | ) | | (54 | ) |
| Loss on sale or disposal of assets | | (18 | ) | | (33 | ) |
| | | | | |
| Net income | | 246 | | | 335 | |
| | | | | |
| Less: Net income attributable to noncontrolling interests | | 61 | | | 118 | |
| | | | | |
| Net income attributable to Whitestone REIT | | $ | 185 | | | $ | 217 | |
| | | | | |
| Earnings per share - basic | | | | |
| Net income attributable to common shareholders excluding amounts attributable | | | | |
| to unvested restricted shares | | $ | 0.03 | | | $ | 0.06 | |
| | | | | |
| Earnings per share - diluted | | | | |
| Net income attributable to common shareholders excluding amounts attributable | | | | |
| to unvested restricted shares | | $ | 0.03 | | | $ | 0.06 | |
| | | | | |
| Weighted average number of common shares outstanding: | | | | |
| Basic | | 5,479 | | | 3,240 | |
| Diluted | | 5,499 | | | 3,303 | |
| | | | | |
| Dividends declared per common share | | $ | 0.2850 | | | $ | 0.3375 | |
Whitestone REIT and Subsidiary
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) |
| | | | | | | | |
| | | Three Months Ended March 31, |
| | | 2011 | | 2010 |
| | | | | |
| Cash flows from operating activities: | | | | |
| Net income (loss) | | $ | 246 | | | $ | 335 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | |
| Depreciation and amortization | | 1,989 | | | 1,734 | |
| Gain on sale of marketable securities | | (38 | ) | | — | |
| Loss on sale or disposal of assets | | 18 | | | 33 | |
| Bad debt expense | | 69 | | | 29 | |
| Share-based compensation | | 78 | | | 71 | |
| Changes in operating assets and liabilities: | | | | |
| Escrows and acquisition deposits | | 3,021 | | | 2,047 | |
| Accrued rent and accounts receivable | | (535 | ) | | 15 | |
| Unamortized lease commissions and loan costs | | (133 | ) | | (71 | ) |
| Prepaid expenses and other assets | | 266 | | | 114 | |
| Accounts payable and accrued expenses | | (2,220 | ) | | (2,837 | ) |
| Tenants' security deposits | | 19 | | | 4 | |
| Net cash provided by operating activities | | 2,780 | | | 1,474 | |
| | | | | |
| Cash flows from investing activities: | | | | |
| Additions to real estate | | (1,042 | ) | | (499 | ) |
| Investments in marketable securities | | (1,865 | ) | | — | |
| Proceeds from sales of marketable securities | | 908 | | | — | |
| Net cash used in investing activities | | (1,999 | ) | | (499 | ) |
| | | | | |
| Cash flows from financing activities: | | | | |
| Dividends paid | | (1,616 | ) | | (1,163 | ) |
| Distributions paid to OP unit holders | | (515 | ) | | (610 | ) |
| Proceeds from notes payable | | 2,905 | | | — | |
| Repayments of notes payable | | (731 | ) | | (715 | ) |
| Payments of loan origination costs | | (81 | ) | | — | |
| Net cash used in financing activities | | (38 | ) | | (2,488 | ) |
| | | | | |
| Net increase (decrease) in cash and cash equivalents | | 743 | | | (1,513 | ) |
| Cash and cash equivalents at beginning of period | | 17,591 | | | 6,275 | |
| Cash and cash equivalents at end of period | | $ | 18,334 | | | $ | 4,762 | |
| | | | | |
| Supplemental disclosure of cash flow information: | | | | |
| Cash paid for interest | | $ | 1,404 | | | $ | 1,409 | |
| | | | | |
| Non cash Investing and financing activities: | | | | |
| Disposal of fully depreciated real estate | | $ | 1 | | | $ | 20 | |
| Financed insurance premiums | | $ | 550 | | | $ | 502 | |
| Accrued offering costs | | $ | 138 | | | $ | — | |
Whitestone REIT and Subsidiaries
RECONCILIATION OF NON-GAAP MEASURES
(in thousands, except per share and per unit data)
|
| | | | | | | | |
| | | Three Months Ended March 31, |
| | | 2011 | | 2010 |
| FFO AND FFO-CORE | | | | |
| Net income attributable to Whitestone REIT | | $ | 185 | | | $ | 217 | |
| Depreciation and amortization of real estate assets | | 1,850 | | | 1,597 | |
| Loss on disposal of assets | | 18 | | | 33 | |
| Net income attributable to noncontrolling interests | | 61 | | | 118 | |
| FFO | | 2,114 | | | 1,965 | |
| | | | | |
| Acquisition costs | | $ | 1 | | | $ | 1 | |
| FFO-Core | | $ | 2,115 | | | $ | 1,966 | |
| | | | | |
| FFO PER SHARE AND OP UNIT CALCULATION: | | | | |
| Numerator: | | | | |
| FFO | | $ | 2,114 | | | $ | 1,965 | |
| Dividends paid on unvested restricted Class A common shares | | (6 | ) | | (10 | ) |
| FFO excluding amounts attributable to unvested restricted | | | | |
| Class A common shares | | 2,108 | | | 1,955 | |
| FFO-Core excluding amounts attributable to unvested restricted | | | | |
| Class A common shares | | 2,109 | | | 1,956 | |
| | | | | |
| Denominator: | | | | |
| Weighted average number of total common shares - basic | | 5,479 | | | 3,240 | |
| Weighted average number of total noncontrolling | | | | |
| OP units - basic | | 1,815 | | | 1,815 | |
| Weighted average number of total commons shares and | | | | |
| noncontrolling OP units - basic | | 7,294 | | | 5,055 | |
| | | | | |
| Effect of dilutive securities: | | | | |
| Unvested restricted shares | | 20 | | | 63 | |
| Weighted average number of total common shares and | | | | |
| noncontrolling OP units - dilutive | | 7,314 | | | 5,118 | |
| | | | | |
| FFO per share and unit - basic | | $ | 0.29 | | | $ | 0.39 | |
| FFO per share and unit - diluted | | $ | 0.29 | | | $ | 0.38 | |
| | | | | |
| FFO-Core per share and unit - basic | | $ | 0.29 | | | $ | 0.39 | |
| FFO-Core per share and unit - diluted | | $ | 0.29 | | | $ | 0.38 | |
Whitestone REIT and Subsidiaries
RECONCILIATION OF NON-GAAP MEASURES
(in thousands, except per share and per unit data)
|
| | | | | | | | |
| | | Three Months Ended March 31, |
| | | 2011 | | 2010 |
| | | | | |
| PROPERTY NET OPERATING INCOME ("NOI") | | | | |
| | | | | |
| Net income attributable to Whitestone REIT | | $ | 185 | | | $ | 217 | |
| General and administrative expenses | | 1,464 | | | 1,200 | |
| Depreciation and amortization | | 1,989 | | | 1,734 | |
| Involuntary conversion | | — | | | — | |
| Interest expense | | 1,402 | | | 1,407 | |
| Interest, dividend and other investment income | | (60 | ) | | (7 | ) |
| Provision for income taxes | | 53 | | | 54 | |
| Loss on disposal of assets | | 18 | | | 33 | |
| Net income attributable to noncontrolling interests | | 61 | | | 118 | |
| NOI | | $ | 5,112 | | | $ | 4,756 | |
| | | | | |
| EARNINGS BEFORE INTEREST, TAX, DEPRECIATION | | | | |
| AND AMORTIZATION ("EBITDA") | | | | |
| | | | | |
| Net income attributable to Whitestone REIT | | $ | 185 | | | $ | 217 | |
| Depreciation and amortization | | 1,989 | | | 1,734 | |
| Involuntary conversion | | — | | | — | |
| Interest expense | | 1,402 | | | 1,407 | |
| Interest, dividend and other investment income | | (60 | ) | | (7 | ) |
| Provision for income taxes | | 53 | | | 54 | |
| Loss on disposal of assets | | 18 | | | 33 | |
| Net income attributable to noncontrolling interests | | 61 | | | 118 | |
| EBITDA | | $ | 3,648 | | | $ | 3,556 | |
|
| | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| | | March 31, | | December 31, | | September 30, | | June 30, |
| | | 2011 | | 2010 | | 2010 | | 2010 |
| Net income attributable to Whitestone REIT | | $ | 185 | | | $ | 545 | | | $ | 177 | | | $ | 166 | |
| Depreciation and amortization | | 1,989 | | | 1,902 | | | 1,830 | | | 1,759 | |
| Involuntary conversion | | — | | | (558 | ) | | — | | | — | |
| Interest expense | | 1,402 | | | 1,410 | | | 1,401 | | | 1,402 | |
| Interest, dividend and other investment income | | (60 | ) | | (9 | ) | | (7 | ) | | (5 | ) |
| Provision for income taxes | | 53 | | | 51 | | | 57 | | | 102 | |
| Loss on disposal of assets | | 18 | | | 47 | | | 72 | | | 8 | |
| Net income attributable to noncontrolling interests | | 61 | | | 206 | | | 57 | | | 89 | |
| EBITDA | | $ | 3,648 | | | $ | 3,594 | | | $ | 3,587 | | | $ | 3,521 | |
Whitestone REIT and Subsidiaries
OTHER FINANCIAL INFORMATION
(in thousands, except number of properties and employees)
|
| | | | | | | | |
| | | Three Months Ended March 31, |
| | | 2011 | | 2010 |
| | | | | |
| Other Financial Information: | | | | |
| | | | | |
Tenant improvements (1) | | $ | 516 | | | $ | 271 | |
Leasing commissions (1) | | $ | 136 | | | $ | 111 | |
| Scheduled debt principal payments | | $ | 604 | | | $ | 563 | |
| Straight line rent income (loss) | | $ | 226 | | | $ | 7 | |
| Market rent amortization income (loss) from acquired leases | | $ | 9 | | | $ | 7 | |
| Non-cash share-based compensation expense | | $ | 78 | | | $ | 71 | |
| Non-real estate depreciation and amortization | | $ | 29 | | | $ | 35 | |
| Amortization of loan fees | | $ | 110 | | | $ | 102 | |
| Acquisition costs | | $ | 1 | | | $ | 1 | |
| Undepreciated value of unencumbered properties | | $ | 65 | | | $ | 59 | |
| Number of unencumbered properties | | 14 | | | 15 | |
| Full time employees | | 52 | | | 50 | |
(1) Does not include first generation costs for tenant improvements and leasing commission costs needed for new acquisitions or redevelopment of a property to bring the property to operating standards for its intended use.
Whitestone REIT and Subsidiaries
MARKET CAPITALIZATION AND SELECTED RATIOS
(in thousands)
|
| | | | | | | | | | | | |
| | | As of March 31, 2011 | | |
| | | Percent of Total Equity | | Total Market Capitalization | | Percent of Total Market Capitalization | | |
| Equity Capitalization: | | | | | | | | |
| Class A common shares outstanding | | 46.4 | % | | 3,471 | | | | | |
| Class B common shares outstanding | | 29.4 | % | | 2,200 | | | | | |
| Operating partnership units outstanding | | 24.2 | % | | 1,815 | | | | | |
| Total | | 100.0 | % | | 7,486 | | | | | |
| | | | | | | | | |
| Market price of Class B common shares as of | | | | | | | | |
| March 31, 2011 | | | | $ | 14.31 | | | | | |
| | | | | | | | | |
| Total equity capitalization | | | | $ | 107,125 | | | 56 | % | | |
| | | | | | | | | |
| Debt Capitalization: | | | | | | | | |
| Outstanding debt | | | | $ | 103,760 | | | | | |
| Less: cash and cash equivalents | | | | (18,334 | ) | | | | |
| | | | | 85,426 | | | 44 | % | | |
| | | | | | | | | |
| Total Market Capitalization as of | | | | | | | | |
| March 31, 2011 | | | | $ | 192,551 | | | 100 | % | | |
|
| | | | | | | | | | | | | | | | |
| SELECTED RATIOS: | | | | | | | | |
| | | Three Months Ended |
| | | March 31, | | December 31, | | September 30, | | June 30, |
| | | 2011 | | 2010 | | 2010 | | 2010 |
| COVERAGE RATIO | | | | | | | | |
| Interest cover ratio | | | | | | | | |
| EBITDA | | $ | 3,648 | | | $ | 3,594 | | | $ | 3,587 | | | $ | 3,521 | |
| Interest expense | | 1,402 | | | 1,410 | | | 1,401 | | | 1,402 | |
| | | 2.6 | | | 2.5 | | | 2.6 | | | 2.5 | |
| | | | | | | | | |
| LEVERAGE RATIO | | | | | | | | |
| Debt/Undepreciated Book Value | | | | | | | | |
| Undepreciated real estate assets | | $ | 205,966 | | | $ | 204,954 | | | $ | 196,877 | | | $ | 193,283 | |
| | | | | | | | | |
| Outstanding debt | | $ | 103,760 | | | $ | 100,941 | | | $ | 101,667 | | | $ | 100,837 | |
| Less: Cash | | (18,334 | ) | | (17,591 | ) | | (26,617 | ) | | (3,910 | ) |
| | | $ | 85,426 | | | $ | 83,350 | | | $ | 75,050 | | | $ | 96,927 | |
| | | 41 | % | | 41 | % | | 38 | % | | 50 | % |
| | | | | | | | | |
Whitestone REIT and Subsidiaries
SUMMARY OF OUTSTANDING DEBT AND DEBT MATURITIES
As of March 31, 2011
(in thousands)
TOTAL OUTSTANDING DEBT
|
| | | | | | | |
| Description | | Oustanding Amount | | Percentage of Total Debt |
| Fixed rate notes | | | | |
$3.0 million 6.00% Note, due 2021 (1) | | $ | 3,000 | | | 3 | % |
| $10.0 million 6.04% Note, due 2014 | | 9,456 | | | 9 | % |
| $1.5 million 6.50% Note, due 2014 | | 1,490 | | | 2 | % |
| $11.2 million 6.52% Note, due 2015 | | 10,872 | | | 10 | % |
| $21.4 million 6.53% Notes, due 2013 | | 19,991 | | | 19 | % |
| $24.5 million 6.56% Note, due 2013 | | 23,924 | | | 23 | % |
| $9.9 million 6.63% Notes, due 2014 | | 9,431 | | | 9 | % |
| $0.5 million 5.05% Notes, due 2011 and 2010 | | 436 | | | 1 | % |
| Floating rate note | | | | |
| $26.9 million LIBOR + 2.86% Note, due 2013 | | 25,160 | | | 24 | % |
| | | $ | 103,760 | | | 100 | % |
(1) The 6.00% interest rate is fixed through March 30, 2016. On March 31, 2016 the interest rate will be reset to the rate of interest for a five year balloon note with a thirty year amortization as published by the Federal Home Loan Bank.
SCHEDULE OF DEBT MATURITIES
|
| | | | | | | | | | | | | | | |
| Year | | Scheduled Amortization Payments | | Scheduled Maturities | | Total Scheduled Maturities | | Percentage of Debt Maturing |
| | | | | | | | | |
| 2011 | | $ | 2,321 | | | $ | — | | | $ | 2,321 | | | 2 | % |
| 2012 | | 2,638 | | | — | | | 2,638 | | | 3 | % |
| 2013 | | 2,334 | | | 64,152 | | | 66,486 | | | 64 | % |
| 2014 | | 242 | | | 18,949 | | | 19,191 | | | 18 | % |
| 2015 | | 169 | | | 10,146 | | | 10,315 | | | 10 | % |
| 2016 and thereafter | | 288 | | | 2,521 | | | 2,809 | | | 3 | % |
| Total | | $ | 7,992 | | | $ | 95,768 | | | $ | 103,760 | | | 100 | % |
Whitestone REIT and Subsidiaries
SUMMARY OF OCCUPANCY AND TOP TENANTS
|
| | | | | | | | | | | | | | | |
| | | Leasable Square Feet as of | | Occupancy as of |
| Community Center Properties | | March 31, 2011 | | March 31, 2011 | | December 31, 2010 | | September 31, 2010 | | June 30, 2010 |
| Retail | | 1,188,830 | | | 83 | % | | 88 | % | | 80 | % | | 82 | % |
| Office/Flex | | 1,201,672 | | | 86 | % | | 88 | % | | 87 | % | | 85 | % |
| Office | | 631,841 | | | 80 | % | | 79 | % | | 78 | % | | 76 | % |
| Total - Operating Portfolio | | 3,022,343 | | | 84 | % | | 86 | % | | 83 | % | | 82 | % |
Redevelopment, New Acquisitions (1) | | 139,677 | | | 42 | % | | 40 | % | | 16 | % | | N/A | |
| Total | | 3,162,020 | | | 82 | % | | 84 | % | | 82 | % | | 82 | % |
(1) Includes new acquisitions through the earlier of attainment of 90% occupancy or 18 months of ownership, and properties which are undergoing significant redevelopment or re-tenanting.
|
| | | | | | | | | | | | | |
| Tenant Name | | Location | | Annualized Rental Revenue (in thousands) | | Percentage of Total Annualized Base Rental Revenues (2) | | Initial Lease Date | | Year Expiring |
| | | | | | | | | | | |
| Sports Authority | | San Antonio | | $ | 495 | | | 1.9 | % | | 1/1/2004 | | 2015 |
| University of Phoenix | | San Antonio | | 407 | | | 1.6 | % | | 10/18/2010 | | 2018 |
| Air Liquide America, L.P. | | Dallas | | 375 | | | 1.4 | % | | 8/1/2001 | | 2013 |
| Brockett Davis Drake Inc. | | Dallas | | 365 | | | 1.4 | % | | 8/1/2001 | | 2011 |
| X-Ray X-Press Corporation | | Houston | | 272 | | | 1.0 | % | | 7/1/1998 | | 2019 |
| Petsmart, Inc | | San Antonio | | 255 | | | 1.0 | % | | 1/1/2004 | | 2013 |
| Marshall's | | Houston | | 248 | | | 0.9 | % | | 5/12/1983 | | 2013 |
| Rock Solid Images | | Houston | | 243 | | | 0.9 | % | | 4/1/2004 | | 2012 |
| Eligibility Services | | Dallas | | 236 | | | 0.9 | % | | 6/6/2000 | | 2012 |
| Merrill Corporation | | Dallas | | 234 | | | 0.9 | % | | 12/10/2001 | | 2014 |
| Compass Insurance | | Dallas | | 213 | | | 0.8 | % | | 9/1/2005 | | 2013 |
| River Oaks L-M, Inc. | | Houston | | 199 | | | 0.8 | % | | 10/15/1993 | | 2011 |
| New Lifestyles, Inc. | | Dallas | | 192 | | | 0.7 | % | | 5/5/1998 | | 2013 |
| Landworks, Inc. | | Houston | | 178 | | | 0.7 | % | | 6/1/2004 | | 2013 |
| The University of Texas Health Science Center | | Houston | | 177 | | | 0.7 | % | | 7/1/2007 | | 2017 |
| | | | | $ | 4,089 | | | 15.6 | % | | | | |
(2) Annualized Base Rental Revenues represents the monthly base rent as of March 31, 2011 for each applicable tenant multiplied by 12.
Whitestone REIT and Subsidiaries
SUMMARY OF LEASING ACTIVITY
|
| | | | | | | | |
| | | Three Months Ended March 31, |
| | | 2011 | | 2010 |
| RENEWALS | | | | |
| Number of Leases | | 43 | | | 32 | |
Total SF (1) | | 121,099 | | | 59,618 | |
| Average SF | | 2,816 | | | 1,863 | |
| Total Lease Value | | $ | 2,724,000 | | | $ | 2,422,000 | |
| NEW LEASES | | | | |
| Number of Leases | | 37 | | | 23 | |
Total SF (1) | | 96,593 | | | 79,162 | |
| Average SF | | 2,611 | | | 3,442 | |
| Total Lease Value | | $ | 3,273,000 | | | $ | 5,178,000 | |
| TOTAL LEASES | | | | |
| Number of Leases | | 80 | | | 55 | |
Total SF (1) | | 217,692 | | | 138,780 | |
| Average SF | | 2,721 | | | 2,523 | |
| Total Lease Value | | $ | 5,997,000 | | | $ | 7,600,000 | |
(1) Represents the square footage as the result of new, renewal, expansion and contraction leases.
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 | | TI and Incentives per SF | | Contractual Rent Per Sq. Ft. (3) | | Prior Contractual Rent Per Sq. Ft. (4) | | 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) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| New leases | | 16 | | | $ | 794,204 | | | 36,212 | | | 3.0 | | | $ | 54,296 | | | $ | 1.50 | | | $ | 7.93 | | | $ | 9.96 | | | $ | (73,510 | ) | | (20 | )% | | $ | (26,435 | ) | | (8 | )% |
Renewal leases (5) | | 40 | | | 2,637,829 | | | 160,386 | | | 2.4 | | | 70,963 | | | 0.44 | | | 7.23 | | | 7.96 | | | (117,082 | ) | | (9 | )% | | 14,435 | | | 1 | % |
| Total | | 56 | | | $ | 3,432,033 | | | 196,598 | | | 2.5 | | | $ | 125,259 | | | $ | 0.64 | | | $ | 7.36 | | | $ | 8.32 | | | $ | (190,592 | ) | | (12 | )% | | $ | (12,000 | ) | | (1 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-comparable | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| New leases | | 21 | | | $ | 2,478,857 | | | 66,958 | | | 4.5 | | | $ | 439,575 | | | $ | 6.56 | | | $ | 8.60 | | | | | | | | | | | |
| Renewal leases | | 3 | | | 85,888 | | | 10,946 | | | 8.3 | | | 16,219 | | | 1.48 | | | 15.11 | | | | | | | | | | | |
| Total | | 24 | | | $ | 2,564,745 | | | 77,904 | | | 4.5 | | | $ | 455,794 | | | $ | 5.85 | | | $ | 9.52 | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| New leases | | 37 | | | $ | 3,273,061 | | | 103,170 | | | 3.9 | | | $ | 493,871 | | | $ | 4.79 | | | $ | 8.37 | | | | | | | | | | | |
| Renewal leases | | 43 | | | 2,723,717 | | | 171,332 | | | 2.4 | | | 87,182 | | | 0.51 | | | 7.73 | | | | | | | | | | | |
| Total | | 80 | | | $ | 5,996,778 | | | 274,502 | | | 3.1 | | | $ | 581,053 | | | $ | 2.12 | | | $ | 7.97 | | | | | | | | | | | |
(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 is determined on the basis of square footage.
(3) Contractual rent represents contractual minimum rent under the new lease for the first month, excluding concessions.
(4) Prior contractual rent represents contractual minimum rent under the prior lease for the final month.
(5) Includes two renewal leases at our Sunnyslope Village property in connection with the acquisition and redevelopment of this property. Excluding these leases, there were 38 renewed leases with an average contractual rent decrease and straight-lined rent increase of 7% and 4%, respectively. Excluding theses two leases, total contractual based rent decreased 10%, and total straight-lined based rent increased 2%.
Whitestone REIT and Subsidiaries
LEASE EXPIRATIONS
|
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Annualized Base Rent |
| | | | | Gross Leasable Area | | as of March 31, 2011 |
| Year | | Number of Leases (1) | | Approximate Square Feet | | Percent of Total | | Amount (in thousands)(2) | | Percent of Total | | Per Square Foot |
| 2011 | | 203 | | | 475,535 | | | 15.0 | % | | $ | 4,898 | | | 18.7 | % | | $ | 10.30 | |
| 2012 | | 174 | | | 481,106 | | | 15.2 | % | | 5,147 | | | 19.6 | % | | 10.70 | |
| 2013 | | 153 | | | 532,738 | | | 16.8 | % | | 5,694 | | | 21.7 | % | | 10.69 | |
| 2014 | | 101 | | | 362,636 | | | 11.5 | % | | 3,634 | | | 13.8 | % | | 10.02 | |
| 2015 | | 73 | | | 341,349 | | | 10.8 | % | | 3,204 | | | 12.2 | % | | 9.39 | |
| 2016 | | 46 | | | 129,746 | | | 4.1 | % | | 1,302 | | | 5.0 | % | | 10.03 | |
| 2017 | | 8 | | | 40,933 | | | 1.3 | % | | 364 | | | 1.4 | % | | 8.89 | |
| 2018 | | 11 | | | 63,820 | | | 2.0 | % | | 872 | | | 3.3 | % | | 13.66 | |
| 2019 | | 6 | | | 50,333 | | | 1.6 | % | | 583 | | | 2.2 | % | | 11.58 | |
| 2020 and thereafter | | 13 | | | 108,274 | | | 3.5 | % | | 547 | | | 2.1 | % | | 5.05 | |
| Total | | 788 | | | 2,586,470 | | | 81.8 | % | | $ | 26,245 | | | 100.0 | % | | $ | 10.15 | |
(1) Lease expirations table reflects rents in place as of March 31, 2011, and does not include option periods.
(2) Annualized base rent represents the monthly base rent as of March 31, 2011 for each tenant multiplied by 12.
Whitestone REIT and Subsidiaries
COMMUNITY CENTERED PROPERTY DETAILS
As of March 31, 2011
|
| | | | | | | | | | | | | | | | | | | | | | |
Community Name | | Location | | Year Built/ Renovated | | Leasable Square Feet | | Percent Occupied at 3/31/11 | | Annualized Base Rental Revenue (in thousands) (1) | | Average Base Rental Revenue Per Sq. Ft. (2) | | Average Net Effective Annual Base Rent Per Leased Sq. Ft.(3) |
| Retail Communities: | | | | | | | | | | | | | | |
| Bellnott Square | | Houston | | 1982 | | 73,930 | | | 35 | % | | $ | 283 | | | $ | 10.94 | | | $ | 10.86 | |
| Bissonnet/Beltway | | Houston | | 1978 | | 29,205 | | | 95 | % | | 291 | | | 10.49 | | | 11.79 | |
| Centre South | | Houston | | 1974 | | 39,134 | | | 62 | % | | 218 | | | 8.98 | | | 8.90 | |
| Greens Road | | Houston | | 1979 | | 20,507 | | | 80 | % | | 160 | | | 9.75 | | | 11.64 | |
| Holly Knight | | Houston | | 1984 | | 20,015 | | | 100 | % | | 327 | | | 16.34 | | | 17.29 | |
| Kempwood Plaza | | Houston | | 1974 | | 101,008 | | | 96 | % | | 862 | | | 8.89 | | | 8.79 | |
| Lion Square | | Houston | | 1980 | | 119,621 | | | 99 | % | | 814 | | | 6.87 | | | 9.02 | |
| Providence | | Houston | | 1980 | | 90,327 | | | 99 | % | | 722 | | | 8.07 | | | 8.34 | |
| Shaver | | Houston | | 1978 | | 21,926 | | | 98 | % | | 239 | | | 11.12 | | | 11.40 | |
| South Richey | | Houston | | 1980 | | 69,928 | | | 34 | % | | 283 | | | 11.90 | | | 11.27 | |
| Spoerlein Commons | | Chicago | | 1987 | | 41,455 | | | 90 | % | | 751 | | | 20.13 | | | 20.21 | |
| SugarPark Plaza | | Houston | | 1974 | | 95,032 | | | 93 | % | | 869 | | | 9.83 | | | 9.75 | |
| Sunridge | | Houston | | 1979 | | 49,359 | | | 99 | % | | 430 | | | 8.80 | | | 9.43 | |
| Torrey Square | | Houston | | 1983 | | 105,766 | | | 85 | % | | 674 | | | 7.50 | | | 7.27 | |
| Town Park | | Houston | | 1978 | | 43,526 | | | 100 | % | | 778 | | | 17.87 | | | 17.44 | |
| Webster Point | | Houston | | 1984 | | 26,060 | | | 100 | % | | 273 | | | 10.48 | | | 12.32 | |
| Westchase | | Houston | | 1978 | | 49,573 | | | 82 | % | | 392 | | | 9.64 | | | 11.76 | |
| Windsor Park | | San Antonio | | 1992 | | 192,458 | | | 76 | % | | 1,480 | | | 10.12 | | | 9.73 | |
| | | | | | | 1,188,830 | | | 83 | % | | $ | 9,846 | | | $ | 9.98 | | | $ | 10.39 | |
| Office/Flex Communities: | | | | | | | | | | | | | | | | | | |
| Brookhill | | Houston | | 1979 | | 74,757 | | | 89 | % | | $ | 258 | | | $ | 3.88 | | | $ | 3.86 | |
| Corporate Park Northwest | | Houston | | 1981 | | 185,627 | | | 68 | % | | 1,300 | | | 10.30 | | | 10.36 | |
| Corporate Park West | | Houston | | 1999 | | 175,665 | | | 95 | % | | 1,537 | | | 9.21 | | | 8.66 | |
| Corporate Park Woodland | | Houston | | 2000 | | 99,937 | | | 92 | % | | 797 | | | 8.67 | | | 8.54 | |
| Dairy Ashford | | Houston | | 1981 | | 42,902 | | | 92 | % | | 202 | | | 5.12 | | | 5.32 | |
| Holly Hall | | Houston | | 1980 | | 90,000 | | | 100 | % | | 557 | | | 6.19 | | | 5.72 | |
| Interstate 10 | | Houston | | 1980 | | 151,000 | | | 85 | % | | 654 | | | 5.10 | | | 4.53 | |
| Main Park | | Houston | | 1982 | | 113,410 | | | 100 | % | | 702 | | | 6.19 | | | 6.15 | |
| Plaza Park | | Houston | | 1982 | | 105,530 | | | 78 | % | | 688 | | | 8.36 | | | 9.17 | |
| Westbelt Plaza | | Houston | | 1978 | | 65,619 | | | 66 | % | | 343 | | | 7.92 | | | 7.25 | |
| Westgate | | Houston | | 1984 | | 97,225 | | | 88 | % | | 463 | | | 5.41 | | | 5.51 | |
| | | | | | | 1,201,672 | | | 86 | % | | $ | 7,501 | | | $ | 7.26 | | | $ | 7.10 | |
| Office Communities: | | | | | | | | | | | | | | | | | | |
| 9101 LBJ Freeway | | Dallas | | 1985 | | 125,874 | | | 71 | % | | $ | 1,367 | | | $ | 15.30 | | | $ | 14.97 | |
| Featherwood | | Houston | | 1983 | | 49,760 | | | 85 | % | | 768 | | | 18.16 | | | 17.97 | |
| Pima Norte | | Phoenix | | 2007 | | 33,417 | | | 19 | % | | 115 | | | 18.11 | | | 20.32 | |
| Royal Crest | | Houston | | 1984 | | 24,900 | | | 75 | % | | 251 | | | 13.44 | | | 13.92 | |
| Uptown Tower | | Dallas | | 1982 | | 253,981 | | | 88 | % | | 3,864 | | | 17.29 | | | 17.58 | |
| Woodlake Plaza | | Houston | | 1974 | | 106,169 | | | 89 | % | | 1,362 | | | 14.41 | | | 14.14 | |
| Zeta Building | | Houston | | 1982 | | 37,740 | | | 87 | % | | 551 | | | 16.78 | | | 16.26 | |
| | | | | | | 631,841 | | | 81 | % | | $ | 8,278 | | | $ | 16.17 | | | $ | 16.19 | |
| Total - Operating Portfolio | | | | | | 3,022,343 | | | 84 | % | | $ | 25,625 | | | $ | 10.09 | | | $ | 10.19 | |
| | | | | | | | | | | | | | | |
| The Citadel | | Phoenix | | 1985 | | 28,547 | | | 21 | % | | $ | 105 | | | $ | 17.51 | | | $ | 17.35 | |
| Sunnyslope Village | | Phoenix | | 2000 | | 111,130 | | | 48 | % | | 515 | | | 9.65 | | | 10.35 | |
| | | | | | | 139,677 | | | 42 | % | | 620 | | | 10.57 | | | 11.18 | |
| Grand Totals | | | | | | 3,162,020 | | | 82 | % | | $ | 26,245 | | | $ | 10.12 | | | $ | 10.23 | |
(1) Calculated as the tenant's actual March 31, 2011 base rent (defined as cash base rents including abatements) multiplied by 12. Excludes vacant space as of March 31, 2011. 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, 2011 equaled approximately $72,000 for the month ended March 31, 2011.
(2) Calculated as annualized base rent divided by net rentable square feet leased as of March 31, 2011. Excludes vacant space as of March 31, 2011.
(3) Represents (i) the contractual base rent for leases in place as of March 31, 2011, calculated on a straight-line basis to reflect changes in rental rates throughout the lease term and amortize free rent periods and abatements, but without regard to tenant improvement allowances and leasing commissions, divided by (ii) square footage under commenced leases of March 31, 2011.
