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| CORPORATE PROFILE |
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| NYSE: WSR | | Whitestone REIT (NYSE: WSR) is a fully integrated real estate investment trust that owns, |
| Common Shares | | operates and redevelops Community Centered Properties TM, which are visibly located properties in |
| | | established or developing, culturally diverse neighborhoods. As of December 31, 2012, we owned |
| | | 51 Community Centered Properties TM with approximately 4.3 million square feet of gross leasable |
| 51 Community Centers | | area, located in five of the top markets in the United States in terms of population growth: Houston, |
| 4.3 Million Sq. Ft. of gross | | Dallas, San Antonio, Phoenix and Chicago. Headquartered in Houston, Texas, we were founded |
| leasable area | | in 1998. |
| 1,066 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, service-oriented tenants at each property who provide |
| Chicago | | services to their respective surrounding communities. Operations include an internal management |
| | | structure providing cost-effective services to locally-oriented, smaller space tenants. Multi-cultural |
| Fiscal Year End | | community focus sets us apart from traditional commercial real estate operators. We value diversity |
| 12/31 | | on our team and maintain in-house leasing, property management, marketing, construction and |
| | | maintenance departments with culturally diverse and multi-lingual associates who understand the |
| Common Shares & | | particular needs of our tenants and neighborhoods. |
| Units Outstanding: | | |
| Common Shares: 17.0 Million* | | We have a diverse tenant base concentrated on service offerings such as medical, educational, casual |
| Operating Partnership Units: | | dining and convenience services. These tenants tend to occupy smaller spaces (less than 3,000 square |
| 0.6 Million | | feet) and, as of December 31, 2012, provided a 55% premium rental rate compared to our larger |
| | | space tenants. The largest of our 1,066 tenants comprises less than 2.0% of our revenues. |
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| | | | | | | | | |
| Distribution (per share / unit): | | Investor Relations: | | | | | | |
| Quarter: $0.2850 | | Whitestone REIT | | | | | | |
| Annualized: $1.14 | | Dave Holeman, Chief Financial Officer |
| Dividend Yield: 7.6%** | | 2600 South Gessner Suite 500, Houston, Texas 77036 | | |
| | | 713.435.2227 email: ir@whitestonereit.com | | website: www.whitestonereit.com |
| Board of Trustees: | | | | | | |
| James C. Mastandrea | | ICR Inc. - Brad Cohen 203.682.8211 | | |
| Daryl J. Carter | | | | | | |
| Daniel G. DeVos | | Analyst Coverage: | | | | | | |
| Donald F. Keating | | BMO Capital Markets Corp. | | J.J.B. Hilliard, W.L. Lyons, LLC | | JMP Securities | | Wunderlich Securities, Inc. |
| Jack L. Mahaffey | | Paul Adornato, CFA | | Carol L. Kemple | | Mitch Germain | | Merril Ross |
| | | 212.885.4170 | | 502.588.1839 | | 212.906.3546 | | 703.669.9255 |
| * As of March 8, 2013 | | Paul.Adornato@bmo.com | | ckemple@hilliard.com | | mgermain@jmpsecurities.com | | mross@wundernet.com |
| | | | | | | | | |
| | | Baird | | | | | | |
| ** Based on common share price | | Paula J. Poskon | | | | | | |
| of $15.06 as of close of market on | | 571.203.1677 | | | | | | |
| March 8, 2012 | | pposkon@rwbaird.com | | | | | | |
PRESS RELEASE
Contact Whitestone REIT:
David K. Holeman, Chief Financial Officer
(713) 435 2227 ir@whitestonereit.com
WHITESTONE REIT ANNOUNCES OPERATING RESULTS FOR FOURTH QUARTER AND FULL YEAR 2012
2012 Highlights
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| • | 33% Year-Over-Year Increase in Annual Revenues. |
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| • | 34% Year-Over-Year Increase in Annual Property Net Operating Income. |
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| • | 35% Year-Over Year Increase in Annual FFO-Core. FFO-Core Per Share of $0.90 up from $0.89 in 2011. |
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| • | Acquired Five Community Centers and One Land Parcel for Aggregate Purchase Price of $107.6 Million |
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| • | Gross real estate assets increased 40% from prior year end |
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| • | Net income of $50,000 for 2012, or $2.2 million excluding one-time expense of $2.2 million. |
Houston, Texas, March 12, 2013 - Whitestone REIT (NYSE: WSR - “Whitestone” or the “Company”), 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 the fourth quarter and year ended December 31, 2012.
James C. Mastandrea, Whitestone's Chairman and Chief Executive Officer stated, “For the third consecutive year, the pace of growth for Whitestone accelerated as we acquired five additional Community Centered Property properties for an aggregate purchase price of $107.6 million in 2012. Furthermore, we again delivered on our internal growth initiatives of adding tenants to increase occupancy rates while executing on select redevelopments to increase the value our assets. We continue to benefit from our commitment to our small space business model, which is helping drive improvement in our leasing efforts and margins. As we look to 2013 with a strengthened balance sheet and additional financial flexibility, we expect to add additional accretive acquisitions from our deep and growing pipeline of off-market opportunities in high growth markets.”
Highlights: Fourth Quarter 2012 Compared to Fourth Quarter 2011
During the year ended December 31, 2012, the Company deployed approximately $107.6 million towards acquisitions of value-add Community Centered PropertiesTM in its target markets, including $84.9 million in acquisitions that were completed between September and year-end, which contributed only partially to 2012 results.
The Company's fourth quarter results, except Funds From Operations (“FFO”)-Core, include a previously disclosed contingency that resulted in an expense of $2.2 million, or ($0.12) per fully diluted share and operating partnership ("OP") unit, related to the disposition of the Chief Executive Officer 's former residence in Cleveland, Ohio, which had been on the market for more than five years.
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| • | Total revenues for the fourth quarter of 2012 were $13.5 million, an increase of $3.5 million, or 35% from the fourth quarter of 2011. |
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| • | FFO-Core for the fourth quarter 2012 increased 26%, or approximately $0.8 million, to $3.9 million as compared to $3.1 million in the fourth quarter of 2011. FFO-Core per diluted common share and OP unit was $0.22, as compared to $0.25 per diluted common share and OP unit for the same period in 2011. FFO-Core in the fourth quarter 2012 included non-cash share based compensation related to the vesting of 2009 restricted share grants of $0.3 million or $0.02 per diluted common share and OP unit. FFO-Core excludes acquisition expenses of $698,000 and $339,000 in 2012 and 2011, respectively, and executive relocation expense of $2.2 million in 2012. |
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| • | FFO for the fourth quarter 2012 was $1.5 million, or $0.09 per diluted common share and OP unit, as compared to $2.8 million or $0.22 per diluted common share and OP unit for the fourth quarter 2011. The expense recognized related to the relocation agreement with the Company's Chief Executive Officer included in FFO for the fourth quarter 2012 was $2.2 million, or ($0.12) per diluted common share and OP unit. |
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| • | Property net operating income (“NOI”) increased 31% to $8.4 million for the fourth quarter 2012 as compared to $6.4 million for the same period in 2011. The increase of $2.0 million is primarily attributable to new acquisitions. |
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| • | Net loss attributable to Whitestone REIT was $1.3 million, or ($0.08) per diluted common share for the fourth quarter 2012, compared to $556,000 or $0.05 per diluted common share for the same period in 2011. Excluding the $2.2 million one-time executive relocation charge discussed above, net income attributable to Whitestone REIT would have been $800,000 or $0.05 per diluted common share for the fourth quarter of 2012. |
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| • | The Company declared a quarterly cash distribution of $0.285 per common share and OP unit for the first quarter of 2013, to be paid in three equal installments of $0.095 in January, February and March 2013. The distribution rate has remained the same since the distribution paid on July 8, 2010. In March 2013, the Company also declared its second quarter cash distribution of $0.285 per common share and OP unit, to be paid in three equal installments of $0.095 in April, May and June 2013. |
Highlights: 2012 Compared to 2011
The Company's annual results, except Funds From Operations (“FFO”)-Core, include a previously disclosed contingency that resulted in an expense of $2.2 million, or ($0.15) per fully diluted share and operating partnership ("OP") unit, respectively, related to the disposition of the Chief Executive Officer 's former residence in Cleveland, Ohio, which had been on the market for more than five years.
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| • | Total revenues for 2012 were $46.6 million, an increase of $11.7 million, or 34% from 2011. |
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| • | FFO-Core increased 35%, or approximately $3.4 million, to $13.0 million for 2012 as compared to $9.6 million in 2011. FFO-Core per diluted common share and OP unit was $0.90 for 2012, as compared to $0.89 per diluted common share and OP unit for 2011. FFO-Core excludes acquisition expenses of $698,000 and $666,000 in 2012 and 2011, respectively, legal recoveries and expenses of $131,000 and $254,000 in 2012 and 2011, respectively, and executive relocation expense of $2.2 million in 2012. |
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| • | Whitestone's FFO was $10.3 million, or $0.71 per diluted common share and OP unit for 2012, as compared to $8.7 million, or $0.81 per diluted common share and OP unit, for 2011. FFO includes the $2.2 million executive relocation expense. |
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| • | Property NOI increased 34% to $28.9 million in 2012, as compared to $21.6 million for 2011. The increase of $7.3 million is primarily attributable to new acquisitions. |
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| • | Net income attributable to Whitestone was $50,000, or $0.00 per diluted common share for 2012, as compared to $1.1 million, or $0.12 per diluted common share, for 2011. Excluding the $2.2 million charge for the disposition of our Chief Executive Officer's former residence, net income attributable to Whitestone REIT would have been $2.2 million or $0.15 per diluted common share for 2012. |
2012 Leasing Highlights
The Company's Operating Portfolio Occupancy Rate was 87% as of December 31, 2012 and December 31, 2011. The Company defines Operating Portfolio Occupancy Rate as physical occupancy in all properties, excluding new acquisitions through the earlier of attainment of 90% occupancy or 18 months of ownership and properties that are undergoing significant redevelopment or re-tenanting. Total physical property occupancy, which includes properties under redevelopment, undergoing significant retenanting and recent acquisitions, increased to 85% as of December 31, 2012 from 84% as of December 31, 2011.
The Company signed new and renewal leases representing 685,000 square feet during 2012 primarily with tenants that required less than 3,000 square feet in multi-cultural neighborhoods, which drives premium rents. Leasing activity increased from the prior year as represented by:
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| • | An increase of 9% in total lease value of new and renewal leases signed: $35.2 million in 2012 versus $32.3 million in 2011; and |
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| • | An increase of 4% in the number of new and renewal leases signed: 323 in 2012 versus 312 in 2011. |
Community Centered PropertiesTM Portfolio Statistics
As of December 31, 2012, Whitestone owned 51 Community Centered PropertiesTM with approximately 4.3 million square feet of gross leasable area, including three development land parcels, located in five of the top markets in the United States in terms of population growth: Houston, Dallas, San Antonio, Phoenix and Chicago.
The Company's strategic efforts target entrepreneurial tenants that provide services to the surrounding neighborhood at each Community Centered PropertyTM. These tenants tend to occupy smaller spaces (less than 3,000 square feet) and, as of December 31, 2012, provided a 55% premium rental rate compared to Whitestone's larger space tenants. As of December 31, 2012 the Company serviced 1,066 tenants throughout its portfolio. No single tenant accounted for more than 1.2% of the Company's annualized base rental revenues as of December 31, 2012.
Balance Sheet
Undepreciated real estate assets increased 40% to $409.7 million as of December 31, 2012 as compared to the prior year end.
Real estate debt as a percentage of total market capitalization was 43% as of December 31, 2012 as compared to 45% as of December 31, 2011.
Whitestone had 24 properties unencumbered by mortgage debt as of December 31, 2012, with an undepreciated cost basis of $206.8 million. The total undepreciated value of the Company's real estate assets and real estate indebtedness was $409.6 million and $292.4 million, respectively as of December 31, 2012 and 2011. As of December 31, 2012, $97.9 million, or approximately 51%, of the Company's debt was subject to fixed interest rates. The Company's weighted average interest rate on all debt as of the end of the fourth quarter was 4.7%.
Subsequent Events
On February 4, 2013, Whitestone, through its operating partnership, closed on an amended and restated credit facility that amended its existing $125 million unsecured revolving credit facility. The amended and restated credit facility increases the borrowing capacity by $50 million to $175 million, adds an accordion feature that will allow borrowing capacity under the facility to further increase to a total of $225 million, reduces the interest rate by approximately 1% (LIBOR plus a margin of 1.75% - 2.50% based on overall corporate leverage), and extends the term by two years to February 3, 2017.
On March 8, 2013 we entered into an interest rate swap, with a January 7, 2014 start date, that fixes the LIBOR portion of our $50 million term loan under the credit facility at $0.84%.
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.
Webcast and Conference Call
The Company will host a conference call for investors and other interested parties on Tuesday, March 12, 2013 at 5:00 p.m. (Eastern Time). 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 1-877-741-4239 for domestic participants or 1-719-325-4744 for international participants. Listeners should go to the website at least 15 minutes prior to the call to download and install any necessary audio software. Those dialing in should call in at least five to ten minutes prior to the start.
The conference call will be recorded and a telephone replay will be available through March 26, 2013, by dialing 1-877-870-5176 for domestic participants or 1-858-384-5517 for international participants and entering the pass code 4423137. 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 fourth quarter earnings release and supplemental data package will be available by mail upon request. To receive a copy, please call the Company’s Investor Relations line at (713) 435-2219.
About Whitestone REIT
Whitestone REIT (NYSE: WSR) is a fully integrated real estate investment trust ("REIT") that owns, operates and redevelops 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 diversified tenant base concentrated on service offerings including medical, education, casual dining, and convenience services. The largest of its approximately 1,100 tenants comprised less than 1.2% of its annualized base rental revenues as of December 31, 2012. 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 contains filings with the Securities and Exchange Commission, 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 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 financial measures that are not calculated pursuant to U.S. generally accepted accounting principles ("GAAP") including FFO, FFO-Core, and NOI. Following are explantions 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 that FFO should represent net income (loss) available to common shareholders (computed in accordance with GAAP) excluding gains or losses from sales of operating assets, impairment charges and extraordinary items, plus depreciation and amortization of operating properties, including the Company's share of unconsolidated real estate joint ventures and partnerships. FFO does not represent cash flows from operating activities determined in accordance with GAAP and should not be considered an alternative to net income as an indication of the Company's performance or to cash flow from operations as a measure of liquidity or ability to make distributions.
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 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, extraordinary non-recurring expenses, such as those incurred in connection with the relocation agreement entered into with the Company's Chief Executive Officer, legal settlements, legal and professional fees, gains and losses on insurance claim settlements and acquisition costs. Therefore, in addition to FFO, management uses FFO-Core, which the Company defines to exclude such items. Management believes that these adjustments are appropriate in determining FFO-Core as they are not indicative of the operating performance of the Company's assets. 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.
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 and gain or loss on sale or disposition of assets, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact to operations from trends in occupancy rates, rental rates and operating costs, providing perspective not immediately apparent from net income. 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, 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 other REITs.
Whitestone REIT and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
|
| | | | | | | | |
| | | December 31, |
| | | 2012 | | 2011 |
| ASSETS |
| Real estate assets, at cost | | | | |
| Property | | $ | 409,669 |
| | $ | 292,360 |
|
| Accumulated depreciation | | (53,920 | ) | | (45,472 | ) |
| Total real estate assets | | 355,749 |
| | 246,888 |
|
| Cash and cash equivalents | | 6,544 |
| | 5,695 |
|
| Marketable securities | | 1,403 |
| | 5,131 |
|
| Escrows and acquisition deposits | | 6,672 |
| | 4,996 |
|
| Accrued rents and accounts receivable, net of allowance for doubtful accounts | | 7,947 |
| | 6,053 |
|
| Related party receivable | | 652 |
| | — |
|
| Unamortized lease commissions and loan costs | | 4,160 |
| | 3,755 |
|
| Prepaid expenses and other assets | | 2,244 |
| | 975 |
|
| Total assets | | $ | 385,371 |
| | $ | 273,493 |
|
| LIABILITIES AND EQUITY |
| Liabilities: | | | | |
| Notes payable | | $ | 190,608 |
| | $ | 127,890 |
|
| Accounts payable and accrued expenses | | 13,824 |
| | 9,017 |
|
| Tenants' security deposits | | 3,024 |
| | 2,232 |
|
| Dividends and distributions payable | | 5,028 |
| | 3,647 |
|
| Total liabilities | | 212,484 |
| | 142,786 |
|
| Commitments and contingencies: | | — |
| | — |
|
| Equity: | | | | |
| Preferred shares, $0.001 par value per share; 50,000,000 shares authorized; none issued and outstanding as of December 31, 2012 and December 31, 2011 | | — |
| | — |
|
| Common shares, $0.001 par value per share; 400,000,000 shares authorized; 16,943,098 and 11,437,855 issued and outstanding as of December 31, 2012 and December 31, 2011, respectively | | 16 |
| | 10 |
|
| Additional paid-in capital | | 224,237 |
| | 158,127 |
|
| Accumulated other comprehensive loss | | (392 | ) | | (1,119 | ) |
| Accumulated deficit | | (57,830 | ) | | (41,060 | ) |
| Total Whitestone REIT shareholders' equity | | 166,031 |
| | 115,958 |
|
| Noncontrolling interest in subsidiary | | 6,856 |
| | 14,749 |
|
| Total equity | | 172,887 |
| | 130,707 |
|
| Total liabilities and equity | | $ | 385,371 |
| | $ | 273,493 |
|
Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(in thousands, except per share data)
|
| | | | | | | | | | | | |
| | | Year Ended December 31, |
| | | 2012 | | 2011 | | 2010 |
| Property revenues | | | | | | |
| Rental revenues | | $ | 36,131 |
| | $ | 27,814 |
| | $ | 25,901 |
|
| Other revenues | | 10,423 |
| | 7,101 |
| | 5,632 |
|
| Total property revenues | | 46,554 |
| | 34,915 |
| | 31,533 |
|
| | | | | | | |
| Property expenses | | | | | | |
| Property operation and maintenance | | 11,255 |
| | 8,659 |
| | 8,358 |
|
| Real estate taxes | | 6,384 |
| | 4,668 |
| | 3,925 |
|
| Total property expenses | | 17,639 |
| | 13,327 |
| | 12,283 |
|
| | | | | | | |
| Other expenses (income) | | | | | | |
| General and administrative | | 7,616 |
| | 6,648 |
| | 4,992 |
|
| Depreciation and amortization | | 10,229 |
| | 7,749 |
| | 6,805 |
|
| Executive relocation expense | | 2,177 |
| | — |
| | — |
|
| Involuntary conversion | | — |
| | — |
| | (558 | ) |
| Interest expense | | 8,732 |
| | 6,344 |
| | 6,040 |
|
| Interest, dividend and other investment income | | (290 | ) | | (460 | ) | | (28 | ) |
| Total other expense | | 28,464 |
| | 20,281 |
| | 17,251 |
|
| | | | | | | |
| Income before loss on sale or disposal of assets and income taxes | | 451 |
| | 1,307 |
| | 1,999 |
|
| | | | | | | |
| Provision for income taxes | | (286 | ) | | (225 | ) | | (264 | ) |
| Loss on sale or disposal of assets | | (112 | ) | | (146 | ) | | (160 | ) |
| Income before gain on sale of property | | 53 |
| | 936 |
| | 1,575 |
|
| | | | | | | |
| Gain on sale of property | | — |
| | 397 |
| | — |
|
| | | | | | | |
| Net income | | 53 |
| | 1,333 |
| | 1,575 |
|
| | | | | | | |
| Less: Net income attributable to noncontrolling interests | | 3 |
| | 210 |
| | 470 |
|
| | | | | | | |
| Net income attributable to Whitestone REIT | | $ | 50 |
| | $ | 1,123 |
| | $ | 1,105 |
|
Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(in thousands, except per share data)
|
| | | | | | | | | | | | |
| | | Year Ended December 31, |
| | | 2012 | | 2011 | | 2010 |
| Basic and Diluted Earnings Per Share: | | | | | | |
| Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares | | $ | 0.00 |
| | $ | 0.12 |
| | $ | 0.27 |
|
| | | | | | | |
| Weighted average number of common shares outstanding: | | | | | | |
| Basic | | 13,496 |
| | 9,028 |
| | 4,012 |
|
| Diluted | | 13,613 |
| | 9,042 |
| | 4,041 |
|
| | | | | | | |
| Distributions declared per common share / OP unit | | $ | 1.1400 |
| | $ | 1.1400 |
| | $ | 0.8550 |
|
| | | | | | | |
| Consolidated Statements of Comprehensive Income | | | | | | |
| | | | | | | |
| Net income | | $ | 53 |
| | $ | 1,333 |
| | $ | 1,575 |
|
| | | | | | | |
| Other comprehensive gain (loss) | | | | | | |
| | | | | | | |
| Unrealized loss on cash flow hedging activities | | 1 |
| | — |
| | — |
|
| Unrealized gain (loss) on available-for-sale marketable securities | | 920 |
| | (1,329 | ) | | — |
|
| | | | | | | |
| Comprehensive income | | 974 |
| | 4 |
| | 1,575 |
|
| | | | | | | |
| Less: Comprehensive income attributable to noncontrolling interests | | 57 |
| | 1 |
| | 470 |
|
| | | | | | | |
| Comprehensive income attributable to Whitestone REIT | | $ | 917 |
| | $ | 3 |
| | $ | 1,105 |
|
Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(in thousands, except per share data)
|
| | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31, | | Twelve Months Ended December 31, |
| | | 2012 | | 2011 | | 2012 | | 2011 |
| | | (unaudited) | | (unaudited) | | | | |
| Property revenues | | | | | | | | |
| Rental revenues | | $ | 10,488 |
| | $ | 7,352 |
| | $ | 36,131 |
| | $ | 27,814 |
|
| Other revenues | | 3,035 |
| | 2,616 |
| | 10,423 |
| | 7,101 |
|
| Total property revenues | | 13,523 |
| | 9,968 |
| | 46,554 |
| | 34,915 |
|
| | | | | | | | | |
| Property expenses | | | | | | | | |
| Property operation and maintenance | | 3,175 |
| | 2,331 |
| | 11,255 |
| | 8,659 |
|
| Real estate taxes | | 1,942 |
| | 1,278 |
| | 6,384 |
| | 4,668 |
|
| Total property expenses | | 5,117 |
| | 3,609 |
| | 17,639 |
| | 13,327 |
|
| | | | | | | | | |
| Other expenses (income) | | | | | | | | |
| General and administrative | | 2,224 |
| | 1,911 |
| | 7,616 |
| | 6,648 |
|
| Depreciation and amortization | | 2,973 |
| | 2,048 |
| | 10,229 |
| | 7,749 |
|
| Executive relocation expense | | 2,177 |
| | — |
| | 2,177 |
| | — |
|
| Interest expense | | 2,408 |
| | 1,642 |
| | 8,732 |
| | 6,344 |
|
| Interest, dividend and other investment income | | (16 | ) | | (81 | ) | | (290 | ) | | (460 | ) |
| Total other expense | | 9,766 |
| | 5,520 |
| | 28,464 |
| | 20,281 |
|
| | | | | | | | | |
| Income (loss) before gain (loss) on sale or disposal of assets and income taxes | | (1,360 | ) | | 839 |
| | 451 |
| | 1,307 |
|
| | | | | | | | | |
| Provision for income taxes | | (74 | ) | | (60 | ) | | (286 | ) | | (225 | ) |
| Loss on sale or disposal of assets | | (7 | ) | | (129 | ) | | (112 | ) | | (146 | ) |
| Income (loss) before gain on sale of property | | (1,441 | ) | | 650 |
| | 53 |
| | 936 |
|
| | | | | | | | | |
| Gain on sale of property | | — |
| | — |
| | — |
| | 397 |
|
| | | | | | | | | |
| Net income (loss) | | (1,441 | ) | | 650 |
| | 53 |
| | 1,333 |
|
| | | | | | | | | |
| Less: Net income (loss) attributable to noncontrolling interests | | (61 | ) | | 94 |
| | 3 |
| | 210 |
|
| | | | | | | | | |
| Net income (loss) attributable to Whitestone REIT | | $ | (1,380 | ) | | $ | 556 |
| | $ | 50 |
| | $ | 1,123 |
|
Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(in thousands, except per share data)
|
| | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31, | | Twelve Months Ended December 31, |
| | | 2012 | | 2011 | | 2012 | | 2011 |
| | | (unaudited) | | (unaudited) | | | | |
| Basic and Diluted Earnings Per Share: | | | | | | | | |
| Net income (loss) attributable to common shareholders excluding amounts attributable to unvested restricted shares | | $ | (0.08 | ) | | $ | 0.05 |
| | $ | 0.00 |
| | $ | 0.12 |
|
| | | | | | | | | |
| Weighted average number of common shares outstanding: | | | | | | | | |
| Basic | | 16,733 |
| | 11,232 |
| | 13,496 |
| | 9,028 |
|
| Diluted | | 16,733 |
| | 11,244 |
| | 13,613 |
| | 9,042 |
|
| | | | | | | | | |
| Distributions declared per common share / OP unit | | $ | 0.2850 |
| | $ | 0.2850 |
| | $ | 1.1400 |
| | $ | 1.1400 |
|
| | | | | | | | | |
| Consolidated Statements of Comprehensive Income (loss) | | | | | | | | |
| | | | | | | | | |
| Net income (loss) | | $ | (1,441 | ) | | $ | 650 |
| | $ | 53 |
| | $ | 1,333 |
|
| | | | | | | | | |
| Other comprehensive gain (loss) | | | | | | | | |
| | | | | | | | | |
| Unrealized gain on cash flow hedging activities | | 10 |
| | — |
| | 1 |
| | — |
|
| Unrealized gain (loss) on available-for-sale marketable securities | | 29 |
| | 552 |
| | 920 |
| | (1,329 | ) |
| | | | | | | | | |
| Comprehensive income (loss) | | (1,402 | ) | | 1,202 |
| | 974 |
| | 4 |
|
| | | | | | | | | |
| Less: Comprehensive income (loss) attributable to noncontrolling interests | | (59 | ) | | 131 |
| | 57 |
| | 1 |
|
| | | | | | | | | |
| Comprehensive income (loss) attributable to Whitestone REIT | | $ | (1,343 | ) | | $ | 1,071 |
| | $ | 917 |
| | $ | 3 |
|
|
| | | | | | | | | | | | |
Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) |
| | | | | | | |
| | | Year Ended December 31, |
| | | 2012 | | 2011 | | 2010 |
| Cash flows from operating activities: | | | | | | |
| Net income | | $ | 53 |
| | $ | 1,333 |
| | $ | 1,575 |
|
| Adjustments to reconcile net income to net cash provided by operating activities: | | |
| | |
| | |
|
| Depreciation and amortization | | 10,229 |
| | 7,749 |
| | 6,805 |
|
| Amortization of deferred loan costs | | 1,426 |
| | 616 |
| | 420 |
|
| Amortization of notes payable discount | | 317 |
| | — |
| | — |
|
| Gain on sale of marketable securities | | (110 | ) | | (192 | ) | | — |
|
| Loss (gain) on sale or disposal of assets and properties | | 112 |
| | (251 | ) | | 160 |
|
| Bad debt expense | | 1,004 |
| | 615 |
| | 536 |
|
| Share-based compensation | | 725 |
| | 310 |
| | 297 |
|
| Changes in operating assets and liabilities: | | | | | | |
| Escrows and acquisition deposits | | (1,104 | ) | | (519 | ) | | 3,840 |
|
| Accrued rent and accounts receivable | | (2,930 | ) | | (1,939 | ) | | (748 | ) |
| Related party receivable | | (652 | ) | | — |
| | — |
|
| Unamortized lease commissions | | (994 | ) | | (995 | ) | | (783 | ) |
| Prepaid expenses and other assets | | (525 | ) | | 296 |
| | 446 |
|
| Accounts payable and accrued expenses | | 2,875 |
| | 993 |
| | (2,319 | ) |
| Tenants' security deposits | | 792 |
| | 436 |
| | 166 |
|
| Net cash provided by operating activities | | 11,218 |
| | 8,452 |
| | 10,395 |
|
| Cash flows from investing activities: | | |
| | |
| | |
|
| Acquisitions of real estate | | (98,350 | ) | | (65,910 | ) | | (8,625 | ) |
| Additions to real estate | | (10,815 | ) | | (7,568 | ) | | (4,143 | ) |
| Proceeds from sale of property | | — |
| | 1,567 |
| | — |
|
| Investments in marketable securities | | (750 | ) | | (13,520 | ) | | — |
|
| Proceeds from sales of marketable securities | | 5,508 |
| | 7,252 |
| | — |
|
| Net cash used in investing activities | | (104,407 | ) | | (78,179 | ) | | (12,768 | ) |
| Cash flows from financing activities: | | |
| | |
| | |
|
| Distributions paid to common shareholders | | (15,324 | ) | | (10,045 | ) | | (5,158 | ) |
| Distributions paid to OP unit holders | | (1,004 | ) | | (1,974 | ) | | (2,249 | ) |
| Proceeds from issuance of common shares, net of offering costs | | 58,679 |
| | 59,683 |
| | 22,970 |
|
| Payments of exchange offer costs | | (479 | ) | | — |
| | — |
|
| Proceeds from revolving credit facility, net | | 58,000 |
| | 11,000 |
| | — |
|
| Proceeds from notes payable | | — |
| | 2,905 |
| | 1,430 |
|
| Repayments of notes payable | | (4,146 | ) | | (3,128 | ) | | (2,957 | ) |
| Payments of loan origination costs | | (1,688 | ) | | (610 | ) | | (98 | ) |
| Repurchase of common stock | | — |
| | — |
| | (249 | ) |
| Net cash provided by financing activities | | 94,038 |
| | 57,831 |
| | 13,689 |
|
| Net increase (decrease) in cash and cash equivalents | | 849 |
| | (11,896 | ) | | 11,316 |
|
| Cash and cash equivalents at beginning of period | | 5,695 |
| | 17,591 |
| | 6,275 |
|
| Cash and cash equivalents at end of period | | $ | 6,544 |
| | $ | 5,695 |
| | $ | 17,591 |
|
Whitestone REIT and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS Supplemental Disclosures (in thousands) |
| | | | | | | | | | | | |
| | | Year Ended December 31, |
| | | 2012 | | 2011 | | 2010 |
| Supplemental disclosure of cash flow information: | | |
| | |
| | |
|
| Cash paid for interest | | $ | 7,137 |
| | $ | 5,719 |
| | $ | 5,621 |
|
| Cash paid for taxes | | $ | 326 |
| | $ | 215 |
| | $ | 262 |
|
| Non cash investing and financing activities: | | |
| | |
| | |
|
| Disposal of fully depreciated real estate | | $ | — |
| | $ | 238 |
| | $ | 598 |
|
| Financed insurance premiums | | $ | 856 |
| | $ | 649 |
| | $ | 616 |
|
| Value of shares issued under dividend reinvestment plan | | $ | 90 |
| | $ | 6 |
| | $ | — |
|
| Acquired interest rate swap | | $ | 1,901 |
| | $ | — |
| | $ | — |
|
| Debt discount on acquired note payable | | $ | (1,329 | ) | | $ | — |
| | $ | — |
|
| Value of common shares exchanged for OP units | | $ | 7,272 |
| | $ | 4,972 |
| | $ | — |
|
| Change in fair value of available-for-sale securities | | $ | 920 |
| | $ | (1,329 | ) | | $ | — |
|
| Change in fair value of cash flow hedge | | $ | 1 |
| | $ | — |
| | $ | — |
|
| Debt assumed with acquisitions of real estate | | $ | 9,166 |
| | $ | 15,425 |
| | $ | — |
|
| Change in par value of common shares | | $ | — |
| | $ | — |
| | $ | 7 |
|
| Reclassification of dividend reinvestment shares with rescission rights | | $ | — |
| | $ | — |
| | $ | 606 |
|
Whitestone REIT and Subsidiaries
RECONCILIATION OF NON-GAAP MEASURES
(in thousands, except per share and per unit data)
|
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31, | | Year Ended December 31, |
| | | 2012 | | 2011 | | 2012 | | 2011 | | 2010 |
| FFO AND FFO-CORE | | | | | | | | | | |
| Net income (loss) attributable to Whitestone REIT | | $ | (1,380 | ) | | $ | 556 |
| | $ | 50 |
| | $ | 1,123 |
| | $ | 1,105 |
|
| Depreciation and amortization of real estate assets | | 2,948 |
| | 2,015 |
| | 10,108 |
| | 7,625 |
| | 6,697 |
|
| (Gain) Loss on disposal of assets | | 7 |
| | 129 |
| | 112 |
| | (251 | ) | | 160 |
|
| Net income (loss) attributable to noncontrolling interests | | (61 | ) | | 94 |
| | 3 |
| | 210 |
| | 470 |
|
| FFO | | 1,514 |
| | 2,794 |
| | 10,273 |
| | 8,707 |
| | 8,432 |
|
| | | | | | | | | | | |
| Acquisition costs | | 166 |
| | 339 |
| | $ | 698 |
| | $ | 666 |
| | $ | 46 |
|
| Relocation arrangement | | 2,177 |
| | — |
| | 2,177 |
| | — |
| | — |
|
| Gain on insurance claim settlement | | — |
| | — |
| | — |
| | — |
| | (558 | ) |
| Legal settlement | | — |
| | — |
| | (131 | ) | | 254 |
| | — |
|
| FFO-Core | | $ | 3,857 |
| | $ | 3,133 |
| | $ | 13,017 |
| | $ | 9,627 |
| | $ | 7,920 |
|
| | | | | | | | | | | |
| FFO PER SHARE AND OP UNIT: | | | | | | | | | | |
| Numerator: | | | | | | | | | | |
| FFO | | $ | 1,514 |
| | $ | 2,794 |
| | $ | 10,273 |
| | $ | 8,707 |
| | $ | 8,432 |
|
| Distributions paid on unvested restricted common shares | | (11 | ) | | (4 | ) | | (22 | ) | | (17 | ) | | (27 | ) |
| FFO excluding amounts attributable to unvested restricted common shares | | $ | 1,503 |
| | $ | 2,790 |
| | $ | 10,251 |
| | $ | 8,690 |
| | $ | 8,405 |
|
| FFO-Core excluding amounts attributable to unvested restricted common shares | | $ | 3,846 |
| | $ | 3,129 |
| | $ | 12,995 |
| | $ | 9,610 |
| | $ | 7,893 |
|
| | | | | | | | | | | |
| Denominator: | | | | | | | | | | |
| Weighted average number of total common shares - basic | | 16,733 |
| | 11,232 |
| | 13,496 |
| | 9,028 |
| | 4,012 |
|
| Weighted average number of total noncontrolling OP units - basic | | 735 |
| | 1,381 |
| | 848 |
| | 1,705 |
| | 1,815 |
|
| Weighted average number of total commons shares and noncontrolling OP units - basic | | 17,468 |
| | 12,613 |
| | 14,344 |
| | 10,733 |
| | 5,827 |
|
| | | | | | | | | | | |
| Effect of dilutive securities: | | | | | | | | | | |
| Unvested restricted shares | | 121 |
| | 12 |
| | 117 |
| | 14 |
| | 29 |
|
| Weighted average number of total common shares and noncontrolling OP units - dilutive | | 17,589 |
| | 12,625 |
| | 14,461 |
| | 10,747 |
| | 5,856 |
|
| | | | | | | | | | | |
| FFO per common share and OP unit - basic | | $ | 0.09 |
| | $ | 0.22 |
| | $ | 0.71 |
| | $ | 0.81 |
| | $ | 1.44 |
|
| FFO per common share and OP unit - diluted | | $ | 0.09 |
| | $ | 0.22 |
| | $ | 0.71 |
| | $ | 0.81 |
| | $ | 1.44 |
|
| | | | | | | | | | | |
| FFO-Core per common share and OP unit - basic | | $ | 0.22 |
| | $ | 0.25 |
| | $ | 0.91 |
| | $ | 0.90 |
| | $ | 1.35 |
|
| FFO-Core per common share and OP unit - diluted | | $ | 0.22 |
| | $ | 0.25 |
| | $ | 0.90 |
| | $ | 0.89 |
| | $ | 1.35 |
|
Whitestone REIT and Subsidiaries
RECONCILIATION OF NON-GAAP MEASURES
(in thousands, except per share and per unit data)
|
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31, | | Year Ended December 31, |
| | | 2012 | | 2011 | | 2012 | | 2011 | | 2011 |
| PROPERTY NET OPERATING INCOME | | | | | | | | | | |
| | | | | | | | | | | |
| Net income (loss) attributable to Whitestone REIT | | $ | (1,380 | ) | | $ | 556 |
| | $ | 50 |
| | $ | 1,123 |
| | $ | 1,105 |
|
| General and administrative expenses | | 2,224 |
| | 1,911 |
| | 7,616 |
| | 6,648 |
| | 4,992 |
|
| Depreciation and amortization | | 2,973 |
| | 2,048 |
| | 10,229 |
| | 7,749 |
| | 6,805 |
|
| Involuntary conversion | | — |
| | — |
| | — |
| | — |
| | (558 | ) |
| Executive relocation expense | | 2,177 |
| | — |
| | 2,177 |
| | — |
| | — |
|
| Interest expense | | 2,408 |
| | 1,642 |
| | 8,732 |
| | 6,344 |
| | 6,040 |
|
| Interest, dividend and other investment income | | (16 | ) | | (81 | ) | | (290 | ) | | (460 | ) | | (28 | ) |
| Provision for income taxes | | 74 |
| | 60 |
| | 286 |
| | 225 |
| | 264 |
|
| Loss on disposal of assets | | 7 |
| | 129 |
| | 112 |
| | 146 |
| | 160 |
|
| Gain on sale of property | | — |
| | — |
| | — |
| | (397 | ) | | — |
|
| Net income (loss) attributable to noncontrolling interests | | (61 | ) | | 94 |
| | 3 |
| | 210 |
| | 470 |
|
| NOI | | $ | 8,406 |
| | $ | 6,359 |
| | $ | 28,915 |
| | $ | 21,588 |
| | $ | 19,250 |
|
| | | | | | | | | | | |
| EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION | | | | | | | | | | |
| | | | | | | | | | | |
| Net income (loss) attributable to Whitestone REIT | | $ | (1,380 | ) | | $ | 556 |
| | $ | 50 |
| | $ | 1,123 |
| | $ | 1,105 |
|
| Depreciation and amortization | | 2,973 |
| | 2,048 |
| | 10,229 |
| | 7,749 |
| | 6,805 |
|
| Involuntary conversion | | — |
| | — |
| | — |
| | — |
| | (558 | ) |
| Executive relocation expense | | 2,177 |
| | — |
| | 2,177 |
| | — |
| | — |
|
| Interest expense | | 2,408 |
| | 1,642 |
| | 8,732 |
| | 6,344 |
| | 6,040 |
|
| Provision for income taxes | | 74 |
| | 60 |
| | 286 |
| | 225 |
| | 264 |
|
| Loss on disposal of assets | | 7 |
| | 129 |
| | 112 |
| | 146 |
| | 160 |
|
| Net income (loss) attributable to noncontrolling interests | | (61 | ) | | 94 |
| | 3 |
| | 210 |
| | 470 |
|
EBITDA (1) | | $ | 6,198 |
| | $ | 4,529 |
| | $ | 21,589 |
| | $ | 15,797 |
| | $ | 14,286 |
|
|
| | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| | | December 31, | | September 30, | | June 30, | | March 31, |
| | | 2012 | | 2012 | | 2012 | | 2012 |
| Net income (loss) attributable to Whitestone REIT | | $ | (1,380 | ) | | $ | 163 |
| | $ | 431 |
| | $ | 793 |
|
| Depreciation and amortization | | 2,973 |
| | 2,683 |
| | 2,290 |
| | 2,283 |
|
| Executive relocation expense | | 2,177 |
| | — |
| | — |
| | — |
|
| Interest expense | | 2,408 |
| | 2,244 |
| | 2,107 |
| | 1,973 |
|
| Provision for income taxes | | 74 |
| | 77 |
| | 70 |
| | 65 |
|
| Loss on disposal of assets | | 7 |
| | 77 |
| | 16 |
| | 12 |
|
| Net income (loss) attributable to noncontrolling interests | | (61 | ) | | 9 |
| | 31 |
| | 67 |
|
EBITDA (1) | | $ | 6,198 |
| | $ | 5,253 |
| | $ | 4,945 |
| | $ | 5,193 |
|
| |
(1) | EBITDA: Management believes that EBITDA is an appropriate supplemental measure of operating performance to net income attributable to the Company. The Company defines EBITDA as operating revenues (rental and other revenues) less property and related expenses (property operation and maintenance and real estate taxes) and general and administrative expenses, excluding executive relocation cost for the disposition of the Chief Executive Officers Cleveland, Ohio house . 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 and Subsidiaries OTHER FINANCIAL INFORMATION (in thousands, except number of properties and employees)
|
| | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31, | | Year Ended December 31, |
| | | 2012 | | 2011 | | 2012 | | 2011 |
| | | | | | | | | |
| Other Financial Information: | | | | | | | | |
| | | | | | | | | |
Tenant improvements (1) | | $ | 448 |
| | $ | 293 |
| | $ | 1,923 |
| | $ | 1,927 |
|
Leasing commissions (1) | | $ | 245 |
| | $ | 145 |
| | $ | 841 |
| | $ | 663 |
|
| Scheduled debt principal payments | | $ | 814 |
| | $ | 637 |
| | $ | 2,981 |
| | $ | 2,489 |
|
| Straight line rent income (loss) | | $ | 157 |
| | $ | 47 |
| | $ | 422 |
| | $ | 567 |
|
| Market rent amortization income (loss) from acquired leases | | $ | (31 | ) | | $ | 12 |
| | $ | (38 | ) | | $ | 48 |
|
| Non-cash share-based compensation expense | | $ | 339 |
| | $ | 77 |
| | $ | 723 |
| | $ | 310 |
|
| Non-real estate depreciation and amortization | | $ | 24 |
| | $ | 34 |
| | $ | 120 |
| | $ | 125 |
|
| Amortization of loan fees | | $ | 363 |
| | $ | 191 |
| | $ | 1,426 |
| | $ | 616 |
|
| Acquisition costs | | $ | 166 |
| | $ | 339 |
| | $ | 698 |
| | $ | 666 |
|
| Undepreciated value of unencumbered properties | | $ | 206,824 |
| | $ | 113,802 |
| | $ | 206,824 |
| | $ | 113,802 |
|
| Number of unencumbered properties | | 24 |
| | 19 |
| | 24 |
| | 19 |
|
| Full time employees | | 67 |
| | 62 |
| | 67 |
| | 62 |
|
| |
(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 December 31, 2012 |
| MARKET CAPITALIZATION: | | Percent of Total Equity | | Total Market Capitalization | | Percent of Total Market Capitalization |
| Equity Capitalization: | | | | | | |
| Common shares outstanding | | 96.1 | % | | 16,943 |
| | |
| Operating partnership units outstanding | | 3.9 | % | | 685 |
| | |
| Total | | 100.0 | % | | 17,628 |
| | |
| | | | | | | |
| Market price of common shares as of | | | | | | |
| December 31, 2012 | | | | $ | 14.05 |
| | |
| | | | | | | |
| Total equity capitalization | | | | 247,673 |
| | 57 | % |
| | | | | | | |
| Debt Capitalization: | | | | | | |
| Outstanding debt | | | | $ | 190,608 |
| | |
| Less: Cash and cash equivalents | | | | (6,544 | ) | | |
| | | | | 184,064 |
| | 43 | % |
| | | | | | | |
| Total Market Capitalization as of | | | | | | |
| December 31, 2012 | | | | $ | 431,737 |
| | 100 | % |
|
| | | | | | | | | | | | | | | | |
| SELECTED RATIOS: (dollars in thousands) | | | | | | | | |
| | | Three Months Ended |
| | | December 31, | | September 30, | | June 30, | | March 31, |
| | | 2012 | | 2012 | | 2012 | | 2012 |
| INTEREST COVERAGE RATIO | | | | | | | | |
| EBITDA/Interest Expense | | | | | | | | |
| EBITDA | | $ | 6,198 |
| | $ | 5,253 |
| | $ | 4,945 |
| | $ | 5,193 |
|
| Interest expense excluding amortized loan fees | | 2,101 |
| | 1,947 |
| | 1,863 |
| | 1,808 |
|
| Ratio of interest expense to EBITDA | | 3.0 |
| | 2.7 |
| | 2.7 |
| | 2.9 |
|
| | | | | | | | | |
| LEVERAGE RATIO | | | | | | | | |
| Debt/Undepreciated Book Value | | | | | | | | |
| Undepreciated real estate assets | | $ | 409,669 |
| | $ | 389,280 |
| | $ | 304,517 |
| | $ | 295,184 |
|
| | | | | | | | | |
| Outstanding debt | | $ | 190,608 |
| | $ | 167,816 |
| | $ | 140,051 |
| | $ | 134,208 |
|
| Less: Cash | | (6,544 | ) | | (8,339 | ) | | (3,863 | ) | | (8,288 | ) |
| Outstanding debt after cash | | $ | 184,064 |
| | $ | 159,477 |
| | $ | 136,188 |
| | $ | 125,920 |
|
| Ratio of debt to real estate assets | | 45 | % | | 41 | % | | 45 | % | | 43 | % |
Whitestone REIT and Subsidiaries
SUMMARY OF OUTSTANDING DEBT AND DEBT MATURITIES
As of September 30, 2012
TOTAL OUTSTANDING DEBT
(in thousands)
|
| | | | | | | | |
| Description | | December 31, 2012 | | December 31, 2011 |
| Fixed rate notes | | | | |
| $1.1 million 4.71% Note, due 2013 (1) | | $ | 1,087 |
| | $ | 1,318 |
|
| $14.1 million 5.695% Note, due 2013 | | 13,850 |
| | 14,110 |
|
$3.0 million 6.00% Note, due 2021 (1) | | 2,943 |
| | 2,978 |
|
| $10.0 million 6.04% Note, due 2014 | | 9,142 |
| | 9,326 |
|
| $1.5 million 6.50% Note, due 2014 | | 1,444 |
| | 1,471 |
|
| $11.2 million 6.52% Note, due 2015 | | 10,609 |
| | 10,763 |
|
| $21.4 million 6.53% Notes, due 2013 | | 18,865 |
| | 19,524 |
|
| $24.5 million 6.56% Note, due 2013 | | 23,135 |
| | 23,597 |
|
| $9.9 million 6.63% Notes, due 2014 | | 8,925 |
| | 9,221 |
|
| $0.7 million 2.97% Note, due 2013 | | 15 |
| | 23 |
|
| Floating rate notes | | | | |
|
| Unsecured line of credit, LIBOR plus 2.75% to 3.75%, due 2015 | | 69,000 |
| | 11,000 |
|
| $9.2 million, Prime Rate less 2.00%, due 2017 | | 7,854 |
| | — |
|
| $26.9 million, LIBOR plus 2.86% Note, due 2013 | | 23,739 |
| | 24,559 |
|
| | | $ | 190,608 |
| | $ | 127,890 |
|
| |
(1) | The 6.00% interest rate is fixed through March 30, 2016. On March 31, 2016, the interest rate will 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 AS OF SEPTEMBER 30, 2012
(in thousands)
|
| | | | | | | | | | | | | | | |
| Year | | Scheduled Amortization Payments | | Scheduled Maturities | | Total Scheduled Maturities | | Percentage of Debt Maturing |
| | | | | | | | | |
| 2013 | | $ | 2,601 |
| | $ | 78,795 |
| | $ | 81,396 |
| | 42.7 | % |
| 2014 | | 293 |
| | 18,879 |
| | 19,172 |
| | 10.1 | % |
| 2015 | | 171 |
| | 10,146 |
| | 10,317 |
| | 5.4 | % |
| 2016 | | 73 |
| | — |
| | 73 |
| | — | % |
| 2017 | | 98 |
| | 76,838 |
| | 76,936 |
| | 40.4 | % |
| 2018 and thereafter | | 185 |
| | 2,529 |
| | 2,714 |
| | 1.4 | % |
| Total | | $ | 3,421 |
| | $ | 187,187 |
| | $ | 190,608 |
| | 100.0 | % |
Whitestone REIT and Subsidiaries SUMMARY OF OCCUPANCY AND TOP TENANTS
|
| | | | | | | | | | | | | | | |
| | | Gross Leasable Area as of | | Occupancy as of |
| Community Centered Properties | | December 31, 2012 | | December 31, 2012 | | September 30, 2012 | | June 30, 2012 | | March 31, 2012 |
| Retail | | 1,970,460 |
| | 88 | % | | 88 | % | | 90 | % | | 90 | % |
| Office/Flex | | 1,201,672 |
| | 89 | % | | 89 | % | | 89 | % | | 87 | % |
| Office | | 631,841 |
| | 78 | % | | 78 | % | | 79 | % | | 79 | % |
| Total - Operating Portfolio | | 3,803,973 |
| | 87 | % | | 87 | % | | 87 | % | | 87 | % |
Redevelopment, New Acquisitions (1) | | 470,718 |
| | 70 | % | | 70 | % | | 68 | % | | 51 | % |
| Total | | 4,274,691 |
| | 85 | % | | 85 | % | | 87 | % | | 85 | % |
| |
(1) | Includes new acquisitions through the earlier of attainment of 90% occupancy or 18 months of ownership, and properties that are undergoing significant redevelopment or re-tenanting. |
|
| | | | | | | | | | | | | |
| Tenant Name | | Location | | Annualized Base Rental Revenue (in thousands) | | Percentage of Total Annualized Base Rental Revenues (1) | | Initial Lease Date | | Year Expiring |
| | | | | | | | | | | |
| University of Phoenix | | San Antonio | | $ | 500 |
| | 1.2 | % | | 10/18/2010 | | 2018 |
| Sports Authority | | San Antonio | | 495 |
| | 1.2 | % | | 1/1/2004 | | 2015 |
| Air Liquide America, L.P. | | Dallas | | 387 |
| | 0.9 | % | | 8/1/2001 | | 2013 |
| Safeway Stores, Incorporated | | Phoenix | | 344 |
| | 0.8 | % | | 12/22/2011 | | 2021 |
| British American Restaurant, LLC | | Phoenix | | 334 |
| | 0.8 | % | | 9/21/2012 | | 2019 |
| Barnes & Noble Booksellers, Inc | | Phoenix | | 314 |
| | 0.7 | % | | 9/21/2012 | | 2014 |
| X-Ray Press Corporation | | Houston | | 280 |
| | 0.7 | % | | 7/1/1998 | | 2019 |
| Walgreens #3766 | | Phoenix | | 279 |
| | 0.6 | % | | 8/9/2011 | | 2049 |
| Sterling Jewelers Inc | | Phoenix | | 277 |
| | 0.6 | % | | 9/21/2012 | | 2020 |
| Rock Solid Images | | Houston | | 266 |
| | 0.6 | % | | 4/1/2004 | | 2013 |
Skechers USA, Inc (2) | | Multiple locations | | 250 |
| | 0.6 | % | | Multiple dates | | 2017 |
| Phoenix Children's Academy | | Phoenix | | 249 |
| | 0.6 | % | | 12/28/2012 | | 2019 |
| Marshall's | | Houston | | 248 |
| | 0.6 | % | | 5/12/1983 | | 2018 |
| Merrill Corporation | | Dallas | | 248 |
| | 0.6 | % | | 12/10/2001 | | 2014 |
| Albertson's #979 | | Phoenix | | 235 |
| | 0.5 | % | | 8/9/2011 | | 2022 |
| | | | | $ | 4,706 |
| | 11.0 | % | | | | |
| |
(1) | Annualized Base Rental Revenues represents the monthly base rent as of December 31, 2012 for each applicable tenant multiplied by 12. |
| |
(2) | At December 31, 2012, we had two leases with tenant at properties located in San Antonio and Houston. The San Antonio lease commenced on May 25, 2012 and expires in 2017. The annualized rental revenue for this location was $120,000, which represents 0.3% of our total annualized base rental revenue. The Houston lease commenced on February 17, 2012 an expires in 2017. The annualized rental revenue was $129,500, which represents 0.3% of our total annualized base rental revenue. |
Whitestone REIT and Subsidiaries SUMMARY OF LEASING ACTIVITY
|
| | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31, | | Twelve Months Ended December 31, |
| | | 2012 | | 2011 | | 2012 | | 2011 |
| RENEWALS | | | | | | | | |
| Number of Leases | | 37 |
| | 45 |
| | 151 |
| | 163 |
|
Total Square Feet (1) | | 102,202 |
| | 46,401 |
| | 343,145 |
| | 399,493 |
|
| Average Square Feet | | 2,762 |
| | 1,031 |
| | 2,272 |
| | 2,451 |
|
| Total Lease Value | | $ | 3,311,920 |
| | $ | 395,636 |
| | $ | 13,935,628 |
| | $ | 11,845,881 |
|
| NEW LEASES | | | | | | | | |
| Number of Leases | | 41 |
| | 43 |
| | 172 |
| | 149 |
|
Total Square Feet (1) | | 90,174 |
| | 114,673 |
| | 341,885 |
| | 397,774 |
|
| Average Square Feet | | 2,199 |
| | 2,667 |
| | 1,988 |
| | 2,670 |
|
| Total Lease Value | | $ | 7,941,993 |
| | $ | 6,811,623 |
| | $ | 21,287,830 |
| | $ | 20,428,437 |
|
| TOTAL LEASES | | | | | | | | |
| Number of Leases | | 78 |
| | 88 |
| | 323 |
| | 312 |
|
Total Square Feet (1) | | 192,376 |
| | 161,074 |
| | 685,030 |
| | 797,267 |
|
| Average Square Feet | | 2,466 |
| | 1,830 |
| | 2,121 |
| | 2,555 |
|
| Total Lease Value | | $ | 11,253,913 |
| | $ | 7,207,259 |
| | $ | 35,223,458 |
| | $ | 32,274,318 |
|
| |
(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 (3) | | TI and Incentives per SF | | 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: | | | | | | | | | | | | | | | | | | | | | | | | |
| 4th Quarter 2012 | | 45 |
| | $ | 3,137,053 |
| | 125,999 |
| | 3.2 |
| | $ | 398,310 |
| | $ | 3.16 |
| | $ | 11.36 |
| | $ | 11.62 |
| | $ | (32,232 | ) | | (2.2 | )% | | $ | 39,065 |
| | 3.3 | % |
| 3rd Quarter 2012 | | 35 |
| | 3,292,250 |
| | 85,990 |
| | 5.3 |
| | 450,340 |
| | 5.24 |
| | 8.56 |
| | 9.99 |
| | (121,968 | ) | | (14.3 | )% | | (57,361 | ) | | (7.0 | )% |
| 2nd Quarter 2012 | | 54 |
| | 5,900,931 |
| | 132,857 |
| | 3.8 |
| | 388,076 |
| | 2.92 |
| | 11.62 |
| | 11.47 |
| | 5,121 |
| | 1.3 | % | | 79,903 |
| | 6.0 | % |
| 1st Quarter 2012 | | 55 |
| | 3,193,832 |
| | 103,905 |
| | 2.2 |
| | 93,657 |
| | 0.90 |
| | 10.83 |
| | 11.31 |
| | (49,133 | ) | | (4.2 | )% | | 15,847 |
| | 1.0 | % |
| Total - 12 months | | 189 |
| | $ | 15,524,066 |
| | 448,751 |
| | 3.8 |
| | $ | 1,330,383 |
| | $ | 2.96 |
| | $ | 10.78 |
| | $ | 11.19 |
| | $ | (198,212 | ) | | (3.7 | )% | | $ | 77,454 |
| | 2.0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Comparable New Leases: | | | | | | | | | | | | | | | | | | | | | | | | |
| 4th Quarter 2012 | | 11 |
| | $ | 735,111 |
| | 19,142 |
| | 3.2 |
| | $ | 117,495 |
| | $ | 6.14 |
| | $ | 11.45 |
| | $ | 13.15 |
| | $ | (32,549 | ) | | (12.9 | )% | | $ | (15,744 | ) | | (6.6 | )% |
| 3rd Quarter 2012 | | 16 |
| | 2,115,518 |
| | 47,862 |
| | 7.4 |
| | 347,194 |
| | 7.25 |
| | 7.41 |
| | 9.01 |
| | (76,257 | ) | | (17.8 | )% | | (55,920 | ) | | (14.0 | )% |
| 2nd Quarter 2012 | | 17 |
| | 1,433,816 |
| | 35,918 |
| | 4.1 |
| | 301,248 |
| | 8.39 |
| | 11.07 |
| | 9.85 |
| | 43,851 |
| | 12.4 | % | | 29,443 |
| | 9.0 | % |
| 1st Quarter 2012 | | 11 |
| | 543,891 |
| | 18,634 |
| | 3.2 |
| | 18,444 |
| | 0.99 |
| | 9.91 |
| | 12.36 |
| | (45,645 | ) | | (19.8 | )% | | (26,157 | ) | | (12.0 | )% |
| Total - 12 months | | 55 |
| | $ | 4,828,336 |
| | 121,556 |
| | 5.1 |
| | $ | 784,381 |
| | $ | 6.45 |
| | $ | 9.51 |
| | $ | 10.43 |
| | $ | (110,600 | ) | | (8.8 | )% | | $ | (68,378 | ) | | (5.7 | )% |
| | | | | | | | | | | | | | | | |
|
| | | | | | | | |
| Comparable Renewal Leases: | | | | | | | | | | | | | | | | | | | | | | | | |
| 4th Quarter 2012 | | 34 |
| | $ | 2,401,942 |
| | 106,857 |
| | 3.2 |
| | $ | 280,815 |
| | $ | 2.63 |
| | $ | 11.34 |
| | $ | 11.34 |
| | $ | 317 |
| | — | % | | $ | 54,809 |
| | 5.8 | % |
| 3rd Quarter 2012 | | 19 |
| | 1,176,732 |
| | 38,128 |
| | 2.6 |
| | 103,146 |
| | 2.71 |
| | 10.01 |
| | 11.20 |
| | (45,711 | ) | | (10.6 | )% | | 50,460 |
| | (0.4 | )% |
| 2nd Quarter 2012 | | 37 |
| | 4,467,115 |
| | 96,939 |
| | 3.6 |
| | 86,828 |
| | 0.90 |
| | 11.82 |
| | 12.06 |
| | (38,730 | ) | | (2.0 | )% | | 42,004 |
| | 6.0 | % |
| 1st Quarter 2012 | | 44 |
| | 2,649,941 |
| | 85,271 |
| | 2.0 |
| | 75,213 |
| | 0.88 |
| | 11.03 |
| | 11.07 |
| | (3,488 | ) | | (0.4 | )% | | 35,608 |
| | 5.0 | % |
| Total - 12 months | | 134 |
| | $ | 10,695,730 |
| | 327,195 |
| | 3.3 |
| | $ | 546,002 |
| | $ | 1.67 |
| | $ | 11.25 |
| | $ | 11.47 |
|
| $ | (87,612 | ) | | (1.9 | )% | | $ | 182,881 |
| | 4.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
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 SF | | Contractual Rent Per Sq. Ft. (4) | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-comparable: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-Comparable Total Leases: | | | | | | | | | | | | | | | | | | | | | | | | |
| 4th Quarter 2012 | | 33 |
| | $ | 8,116,860 |
| | 116,384 |
| | 4.9 |
| | $ | 1,351,377 |
| | $ | 11.61 |
| | $ | 13.70 |
| | | | | | | | | | |
| 3rd Quarter 2012 | | 28 |
| | 4,381,167 |
| | 93,111 |
| | 4.4 |
| | 493,052 |
| | 5.30 |
| | 15.01 |
| | | | | | | | | | |
| 2nd Quarter 2012 | | 38 |
| | 3,565,197 |
| | 99,396 |
| | 3.6 |
| | 509,581 |
| | 5.13 |
| | 10.26 |
| | | | | | | | | | |
| 1st Quarter 2012 | | 35 |
| | 3,636,434 |
| | 96,600 |
| | 4.1 |
| | 492,660 |
| | 5.10 |
| | 9.03 |
| | | | | | | | | | |
| Total - 12 months | | 134 |
| | $ | 19,699,658 |
| | 405,491 |
| | 4.3 |
| | $ | 2,846,670 |
| | $ | 7.02 |
| | $ | 12.05 |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-Comparable New Leases: | | | | | | | | | | | | | | | | | | | | | | | | |
| 4th Quarter 2012 | | 30 |
| | $ | 7,206,883 |
| | 103,297 |
| | 4.9 |
| | $ | 1,217,136 |
| | $ | 11.78 |
| | $ | 13.67 |
| | | | | | | | | | |
| 3rd Quarter 2012 | | 23 |
| | 3,647,742 |
| | 70,728 |
| | 5.2 |
| | 449,193 |
| | 6.35 |
| | 14.51 |
| | | | | | | | | | |
| 2nd Quarter 2012 | | 33 |
| | 2,164,761 |
| | 69,804 |
| | 3.1 |
| | 426,724 |
| | 6.11 |
| | 10.13 |
| | | | | | | | | | |
| 1st Quarter 2012 | | 31 |
| | 3,440,224 |
| | 85,866 |
| | 4.4 |
| | 444,899 |
| | 5.18 |
| | 9.04 |
| | | | | | | | | | |
| Total - 12 months | | 117 |
| | $ | 16,459,610 |
| | 329,695 |
| | 4.4 |
| | $ | 2,537,952 |
| | $ | 7.70 |
| | $ | 11.89 |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-Comparable Renewal Leases: | | | | | | | | | | | | | | | | | | | | | | | | |
| 4th Quarter 2012 | | 3 |
| | $ | 909,977 |
| | 13,087 |
| | 4.7 |
| | $ | 134,241 |
| | $ | 10.26 |
| | $ | 13.95 |
| | | | | | | | | | |
| 3rd Quarter 2012 | | 5 |
| | 733,425 |
| | 22,383 |
| | 2.1 |
| | 43,859 |
| | 1.96 |
| | 16.58 |
| | | | | | | | | | |
| 2nd Quarter 2012 | | 5 |
| | 1,400,436 |
| | 29,592 |
| | 4.7 |
| | 82,857 |
| | 2.80 |
| | 10.56 |
| | | | | | | | | | |
| 1st Quarter 2012 | | 4 |
| | 196,210 |
| | 10,734 |
| | 1.7 |
| | 47,761 |
| | 4.45 |
| | 9.00 |
| | | | | | | | | | |
| Total - 12 months | | 17 |
| | $ | 3,240,048 |
| | 75,796 |
| | 3.5 |
| | $ | 308,718 |
| | $ | 4.07 |
| | $ | 12.70 |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
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 SF | | Contractual Rent Per Sq. Ft. (4) | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| New & Renewal | | | | | | | | | | | | | | | | | | | | | | | | |
| 4th Quarter 2012 | | 78 |
| | $ | 11,253,913 |
| | 242,383 |
| | 4.0 |
| | $ | 1,749,687 |
| | $ | 7.22 |
| | $ | 12.48 |
| | | | | | | | | | |
| 3rd Quarter 2012 | | 63 |
| | 7,673,417 |
| | 179,101 |
| | 4.8 |
| | 943,392 |
| | 5.27 |
| | 11.91 |
| | | | | | | | | | |
| 2nd Quarter 2012 | | 92 |
| | 9,466,128 |
| | 232,253 |
| | 3.7 |
| | 897,657 |
| | 3.86 |
| | 11.04 |
| | | | | | | | | | |
| 1st Quarter 2012 | | 90 |
| | 6,830,266 |
| | 200,505 |
| | 3.1 |
| | 586,317 |
| | 2.92 |
| | 9.96 |
| | | | | | | | | | |
| Total - 12 months | | 323 |
| | $ | 35,223,724 |
| | 854,242 |
| | 4.0 |
| | $ | 4,177,053 |
| | $ | 4.89 |
| | $ | 11.38 |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| New | | | | | | | | | | | | | | | | | | | | | | | | |
| 4th Quarter 2012 | | 41 |
| | $ | 7,941,994 |
| | 122,439 |
| | 4.6 |
| | $ | 1,334,631 |
| | $ | 10.90 |
| | $ | 13.32 |
| | | | | | | | | | |
| 3rd Quarter 2012 | | 39 |
| | 5,763,260 |
| | 118,590 |
| | 6.1 |
| | 796,387 |
| | 6.72 |
| | 11.65 |
| | | | | | | | | | |
| 2nd Quarter 2012 | | 50 |
| | 3,598,577 |
| | 105,722 |
| | 3.4 |
| | 727,972 |
| | 6.89 |
| | 10.45 |
| | | | | | | | | | |
| 1st Quarter 2012 | | 42 |
| | 3,984,115 |
| | 104,500 |
| | 4.2 |
| | 463,343 |
| | 4.43 |
| | 9.19 |
| | | | | | | | | | |
| Total - 12 months | | 172 |
| | $ | 21,287,946 |
| | 451,251 |
| | 4.6 |
| | $ | 3,322,333 |
| | $ | 7.36 |
| | $ | 11.25 |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Renewal | | | | | | | | | | | | | | | | | | | | | | | | |
| 4th Quarter 2012 | | 37 |
| | $ | 3,311,919 |
| | 119,944 |
| | 3.3 |
| | $ | 415,056 |
| | $ | 3.46 |
| | $ | 11.63 |
| | | | | | | | | | |
| 3rd Quarter 2012 | | 24 |
| | 1,910,157 |
| | 60,511 |
| | 2.4 |
| | 147,005 |
| | 2.43 |
| | 12.44 |
| | | | | | | | | | |
| 2nd Quarter 2012 | | 42 |
| | 5,867,551 |
| | 126,531 |
| | 3.9 |
| | 169,685 |
| | 1.34 |
| | 11.53 |
| | | | | | | | | | |
| 1st Quarter 2012 | | 48 |
| | 2,846,151 |
| | 96,005 |
| | 2.0 |
| | 122,974 |
| | 1.28 |
| | 10.81 |
| | | | | | | | | | |
| Total - 12 months | | 151 |
| | $ | 13,935,778 |
| | 402,991 |
| | 3.3 |
| | $ | 854,720 |
| | $ | 2.12 |
| | $ | 11.52 |
| | | | | | | | | | |
| |
(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 of tenant improvements (TI) and incentives is determined on the basis of square footage. |
| |
(3) | Estimated amount per signed lease. Actual cost of construction may vary. Does not include first generation costs for TI and leasing commission costs needed for new acquisitions or redevelopment of a property to bring the property to operating standards for its intended use. |
| |
(4) | Contractual rent represents contractual minimum rent under the new lease for the first month, excluding concessions. |
| |
(5) | Prior contractual rent represents contractual minimum rent under the prior lease for the final month. |
Whitestone REIT LEASE EXPIRATIONS(1)
|
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Annualized Base Rent(2) |
| | | | | Gross Leasable Area | | as of December 31, 2012 |
| Year | | Number of
Leases | | Square Feet | | Percent
of Gross Leasable Area | | Amount
(in thousands) | | Percent of
Total | | Per Square Foot |
| 2013 | | 321 |
| | 720,665 |
| | 16.9 | % | | $ | 9,471 |
| | 22.0 | % | | $ | 13.14 |
|
| 2014 | | 231 |
| | 712,450 |
| | 16.7 | % | | 8,328 |
| | 19.4 | % | | 11.69 |
|
| 2015 | | 164 |
| | 532,043 |
| | 12.4 | % | | 5,735 |
| | 13.4 | % | | 10.78 |
|
| 2016 | | 122 |
| | 384,853 |
| | 9.0 | % | | 4,851 |
| | 11.3 | % | | 12.60 |
|
| 2017 | | 106 |
| | 363,579 |
| | 8.5 | % | | 4,732 |
| | 11.0 | % | | 13.02 |
|
| 2018 | | 37 |
| | 245,603 |
| | 5.7 | % | | 2,299 |
| | 5.3 | % | | 9.36 |
|
| 2019 | | 19 |
| | 139,106 |
| | 3.3 | % | | 1,997 |
| | 4.7 | % | | 14.36 |
|
| 2020 | | 14 |
| | 71,545 |
| | 1.7 | % | | 1,082 |
| | 2.5 | % | | 15.12 |
|
| 2021 | | 13 |
| | 127,812 |
| | 3.0 | % | | 1,377 |
| | 3.2 | % | | 10.77 |
|
| 2022 | | 19 |
| | 151,031 |
| | 3.5 | % | | 1,601 |
| | 3.7 | % | | 10.60 |
|
| Total | | 1,046 |
| | 3,448,687 |
| | 80.7 | % | | $ | 41,473 |
| | 96.5 | % | | $ | 12.03 |
|
| |
(1) | Lease expirations table reflects rents in place as of December 31, 2012, and does not include option periods. |
| |
(2) | Annualized Base Rent represents the monthly base rent as of December 31, 2012 for each tenant multiplied by 12. |
Whitestone REIT and Subsidiaries Property Details As of December 31, 2012 |
| | | | | | | | | | | | | | | | | | | | | | |
Community Name | | Location | | Year Built/ Renovated | | Gross Leasable Area | | Percent Occupied as of 12/31/2012 | | Annualized Base Rental Revenue (in thousands) (1) | | Average Base Rental Revenue Per Sq. Ft. (2) | | Average Net Effective Annual Base Rent Per Leased Sq. Ft.(3) |
| Retail Communities: | | | | | | | | | | | | | | |
| Ahwatukee Plaza | | Phoenix | | 1979 | | 72,650 |
| | 100 | % | | $ | 871 |
| | 11.99 |
| | $ | 12.42 |
|
| Bellnott Square | | Houston | | 1982 | | 73,930 |
| | 41 | % | | 293 |
| | 9.67 |
| | 9.70 |
|
| Bissonnet/Beltway | | Houston | | 1978 | | 29,205 |
| | 100 | % | | 331 |
| | 11.33 |
| | 9.11 |
|
| Centre South | | Houston | | 1974 | | 39,134 |
| | 79 | % | | 279 |
| | 9.02 |
| | 8.70 |
|
| The Citadel | | Phoenix | | 1985 | | 28,547 |
| | 82 | % | | 335 |
| | 14.31 |
| | 21.57 |
|
| Desert Canyon | | Phoenix | | 2000 | | 62,533 |
| | 73 | % | | 568 |
| | 12.44 |
| | 12.49 |
|
| Gilbert Tuscany Village | | Phoenix | | 2009 | | 49,415 |
| | 49 | % | | 400 |
| | 16.52 |
| | 19.37 |
|
| Holly Knight | | Houston | | 1984 | | 20,015 |
| | 100 | % | | 351 |
| | 17.54 |
| | 17.39 |
|
| Kempwood Plaza | | Houston | | 1974 | | 101,008 |
| | 100 | % | | 873 |
| | 8.64 |
| | 8.46 |
|
| Lion Square | | Houston | | 1980 | | 117,592 |
| | 100 | % | | 1,090 |
| | 9.27 |
| | 9.92 |
|
| MarketPlace At Central | | Phoenix | | 2000 | | 111,130 |
| | 45 | % | | 428 |
| | 8.56 |
| | 8.78 |
|
| Paradise Plaza | | Phoenix | | 1993 | | 125,898 |
| | 88 | % | | 1,263 |
| | 11.40 |
| | 12.65 |
|
| Pinnacle of Scottsdale | | Phoenix | | 1991 | | 113,108 |
| | 99 | % | | 2,152 |
| | 19.22 |
| | 19.30 |
|
| Providence | | Houston | | 1980 | | 90,327 |
| | 88 | % | | 731 |
| | 9.20 |
| | 8.44 |
|
| Shaver | | Houston | | 1978 | | 21,926 |
| | 93 | % | | 252 |
| | 12.36 |
| | 12.55 |
|
| Shops at Pecos Ranch | | Phoenix | | 2009 | | 78,767 |
| | 100 | % | | 1,353 |
| | 17.18 |
| | 17.18 |
|
| Shops at Starwood | | Dallas | | 2006 | | 55,385 |
| | 100 | % | | 1,468 |
| | 26.51 |
| | 27.86 |
|
| South Richey | | Houston | | 1980 | | 69,928 |
| | 81 | % | | 385 |
| | 6.80 |
| | 9.00 |
|
| Spoerlein Commons | | Chicago | | 1987 | | 41,455 |
| | 92 | % | | 770 |
| | 20.19 |
| | 20.45 |
|
| SugarPark Plaza | | Houston | | 1974 | | 95,032 |
| | 100 | % | | 1,010 |
| | 10.63 |
| | 10.38 |
|
| Sunridge | | Houston | | 1979 | | 49,359 |
| | 99 | % | | 462 |
| | 9.45 |
| | 9.35 |
|
| Terravita Marketplace | | Phoenix | | 1997 | | 102,733 |
| | 93 | % | | 1,292 |
| | 13.52 |
| | 13.64 |
|
| Torrey Square | | Houston | | 1983 | | 105,766 |
| | 91 | % | | 691 |
| | 7.18 |
| | 7.02 |
|
| Town Park | | Houston | | 1978 | | 43,526 |
| | 100 | % | | 808 |
| | 18.56 |
| | 18.24 |
|
| Webster Point | | Houston | | 1984 | | 26,060 |
| | 79 | % | | 219 |
| | 10.64 |
| | 10.01 |
|
| Westchase | | Houston | | 1978 | | 49,573 |
| | 88 | % | | 518 |
| | 11.87 |
| | 12.42 |
|
| Windsor Park | | San Antonio | | 1992 | | 196,458 |
| | 97 | % | | 1,977 |
| | 10.37 |
| | 10.00 |
|
| | | | | | | 1,970,460 |
| | 88 | % | | 21,170 |
| | 12.21 |
| | 12.48 |
|
| Office/Flex Communities: | | | | | | | | | | | | | | |
| Brookhill | | Houston | | 1979 | | 74,757 |
| | 81 | % | | $ | 231 |
| | $ | 3.81 |
| | $ | 3.77 |
|
| Corporate Park Northwest | | Houston | | 1981 | | 185,627 |
| | 79 | % | | 1,624 |
| | 11.07 |
| | 10.35 |
|
| Corporate Park West | | Houston | | 1999 | | 175,665 |
| | 95 | % | | 1,288 |
| | 7.72 |
| | 7.36 |
|
| Corporate Park Woodland | | Houston | | 2000 | | 99,937 |
| | 100 | % | | 839 |
| | 8.40 |
| | 8.28 |
|
| Dairy Ashford | | Houston | | 1981 | | 42,902 |
| | 99 | % | | 241 |
| | 5.67 |
| | 5.53 |
|
| Holly Hall | | Houston | | 1980 | | 90,000 |
| | 100 | % | | 737 |
| | 8.19 |
| | 8.29 |
|
| Interstate 10 | | Houston | | 1980 | | 151,000 |
| | 82 | % | | 718 |
| | 5.80 |
| | 5.97 |
|
| Main Park | | Houston | | 1982 | | 113,410 |
| | 96 | % | | 619 |
| | 5.69 |
| | 6.74 |
|
| Plaza Park | | Houston | | 1982 | | 105,530 |
| | 79 | % | | 757 |
| | 9.08 |
| | 9.16 |
|
| Westbelt Plaza | | Houston | | 1978 | | 65,619 |
| | 80 | % | | 378 |
| | 7.20 |
| | 6.88 |
|
Whitestone REIT and Subsidiaries Property Details As of December 31, 2012 (continued)
|
| | | | | | | | | | | | | | | | | | | | | | |
Community Name | | Location | | Year Built/ Renovated | | Gross Leasable Area | | Percent Occupied as of 12/31/2012 | | 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) |
| Westgate | | Houston | | 1984 | | 97,225 |
| | 100 | % | | 602 |
| | 6.19 |
| | 5.98 |
|
| | | | | | | 1,201,672 |
| | 89 | % | | 8,034 |
| | 7.51 |
| | 7.46 |
|
| Office Communities: | | | | | | | | | | | | | | |
| 9101 LBJ Freeway | | Dallas | | 1985 | | 125,874 |
| | 70 | % | | $ | 1,337 |
| | $ | 15.17 |
| | $ | 15.28 |
|
| Featherwood | | Houston | | 1983 | | 49,760 |
| | 89 | % | | 820 |
| | 18.52 |
| | 19.13 |
|
| Pima Norte | | Phoenix | | 2007 | | 33,417 |
| | 20 | % | | 127 |
| | 19.00 |
| | 18.55 |
|
| Royal Crest | | Houston | | 1984 | | 24,900 |
| | 65 | % | | 244 |
| | 15.08 |
| | 14.09 |
|
| Uptown Tower | | Dallas | | 1982 | | 253,981 |
| | 83 | % | | 3,649 |
| | 17.31 |
| | 17.05 |
|
| Woodlake Plaza | | Houston | | 1974 | | 106,169 |
| | 90 | % | | 1,562 |
| | 16.35 |
| | 16.32 |
|
| Zeta Building | | Houston | | 1982 | | 37,740 |
| | 79 | % | | 525 |
| | 17.61 |
| | 17.01 |
|
| | | | | | | 631,841 |
| | 78 | % | | 8,264 |
| | 16.77 |
| | 16.65 |
|
| | | | | | | | | | | | | | | |
| Total - Operating Portfolio | | | | | | 3,803,973 |
| | 87 | % | | 37,468 |
| | 11.32 |
| | 11.43 |
|
| | | | | | | | | | | | | | | |
| Dana Park | | Phoenix | | 2007 | | 310,979 |
| | 72 | % | | 3,713 |
| | 16.58 |
| | 17.61 |
|
| Fountain Square | | Phoenix | | 1986 | | 118,209 |
| | 63 | % | | 1,232 |
| | 16.54 |
| | 16.54 |
|
| The Shops at Pinnacle Peak | | Phoenix | | 2000 | | 41,530 |
| | 76 | % | | 575 |
| | 18.22 |
| | 18.85 |
|
| Total - Development Portfolio | | | | | | 470,718 |
| | 70 | % | | 5,520 |
| | 16.75 |
| | 17.51 |
|
| | | | | | | | | | | | | | | |
| Dana Park Development | | Phoenix | | | | — |
| | — | % | | — |
| | — |
| | — |
|
| Pinnacle Phase II | | Phoenix | | | | — |
| | — | % | | — |
| | — |
| | — |
|
| Shops at Starwood Phase III | | Dallas | | | | — |
| | — | % | | — |
| | — |
| | — |
|
Total - Property Held For Development (4) | | | | | | — |
| | — | % | | — |
| | — |
| | — |
|
| | | | | | | | | | | | | | | |
| Grand Totals | | | | | | 4,274,691 |
| | 85 | % | | $ | 42,988 |
| | $ | 11.83 |
| | $ | 12.00 |
|
| |
(1) | Calculated as the tenant's actual December 31, 2012 base rent (defined as cash base rents including abatements) multiplied by 12. Excludes vacant space as of December 31, 2012. Because annualized base rental revenue is not derived from historical results that were accounted for in accordance with generally accepted accounting principles, historical results differ from the annualized amounts. Total abatements for leases in effect as of December 31, 2012 equaled approximately $94,000 for the month ended December 31, 2012. |
| |
(2) | Calculated as annualized base rent divided by square feet leased as of December 31, 2012. Excludes vacant space as of December 31, 2012. |
| |
(3) | Represents (i) the contractual base rent for leases in place as of December 31, 2012, 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 as of December 31, 2012. |
| |
(4) | As of December 31, 2012, these properties are held for development with no gross leasable area. |
