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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 June 30, 2014, we owned |
| | | 60 Community Centered Properties TM with approximately 5.0 million square feet of gross leasable |
| 60 Community Centers | | area, located in five of the top markets in the United States in terms of population growth: Houston, |
| 5.0 Million Sq. Ft. of gross | | Dallas, San Antonio, Phoenix and Chicago. Headquartered in Houston, Texas, we were founded |
| leasable area | | in 1998. |
| 1,232 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 tenants |
| Houston | | deliver needed services to the surrounding community. We focus on properties with smaller rental |
| Dallas | | 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: 22.7 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 |
| 0.4 Million | | feet) and, as of June 30, 2014, provided a 47% premium rental rate compared to our larger |
| | | space tenants. The largest of our 1,232 tenants comprised less than 1.9% of our annualized base |
| | | rental revenues for the three months ended June 30, 2014. |
| | | | | | | | | |
| Distribution (per share / unit): | | Investor Relations: | | | | |
| Quarter: $ 0.2850 | | Whitestone REIT | | | | | | ICR inc. |
| Annualized: $ 1.1400 | | Suzy Taylor, Director of Investor Relations | | | | Brad Cohen |
| Dividend Yield: 7.6%** | | 2600 South Gessner, Suite 500, Houston, Texas 77063 | | | | 203.682.8211 |
| | | 713.435.2219 email: ir@whitestonereit.com | | |
| Board of Trustees: | | website: www.whitestonereit.com | | |
| James C. Mastandrea | | | | |
| Daryl J. Carter | | Analyst Coverage: | | | | | | |
| Donald F. Keating | | BMO Capital Markets Corp. | | J.J.B. Hilliard, W.L. Lyons, LLC | | JMP Securities | | Ladenburg Thalmann |
| Paul T. Lambert | | Paul Adornato, CFA | | Carol L. Kemple | | Mitch Germain | | Daniel P. Donlan |
| Jack L. Mahaffey | | 212.885.4170 | | 502.588.1839 | | 212.906.3546 | | 212.409.2056 |
| Trustee Emeritus: | | Paul.Adornato@bmo.com | | ckemple@hilliard.com | | mgermain@jmpsecurities.com | | ddonlan@ladenburg.com |
| Daniel G. DeVos | | | | | | | | |
| | | | | | | | | |
| * As of August 4, 2014 | | Maxim Group | | Robert W. Baird & Co. | | Wunderlich Securities, Inc. | | |
| ** Based on common share price | | Michael Diana | | Jonathon Pong | | Merril Ross | | |
| of $14.99 as of close of market on | | 212.895.3641 | | 203.425.2740 | | 703.669.9255 | | |
| August 4, 2014. | | mdiana@maximgrp.com | | jpong@rwbaird.com | | mross@wundernet.com | | |
Press Release
WHITESTONE REIT’S VALUE ADD BUSINESS MODEL
PRODUCES STRONG OPERATING RESULTS
- Funds From Operations Core Increased $1.7 Million, to $0.29 per share -
- Net Income of $1.3 Million Grew 27.6% -
- Revenue Increased 20% to $17.7 Million -
- Property Net Operating Income Grew 20% to $11.3 Million -
- Realized Rent Growth on New and Renewal Leases of 7.5% on a GAAP Basis -
- Leased 220,513 Square Feet Adding $14.8 Million in Lease Value -
- Company Reiterates 2014 Annual Guidance -
Houston, Texas, August 5, 2014 - Whitestone REIT (NYSE: WSR - “Whitestone” or the “Company”), a fully integrated real estate company that owns, re-develops, leases, manages, and operates Community Centered PropertiesTM, announced its financial results for the second quarter of 2014.
“Whitestone’s year-over-year per share/unit growth in funds from operations core, revenue and net operating income is a result of adding value through accretive property acquisitions, and the execution of our Community Centered PropertyTM business model, primarily focused on community service based tenants,” said James C. Mastandrea, Chairman and Chief Executive Officer of Whitestone. Mastandrea added, “We continue to build economies of scale in our target markets, enhancing our already strong portfolio that is producing solid year over year results. Our pipeline of new acquisitions and leases remains active and additional selective development of our existing properties is ongoing and expected to contribute to our future operating results.”
Financial Results: Second Quarter 2014 Compared to Second Quarter 2013
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| • | Funds From Operations ("FFO") Core increased 35%, or approximately $1.7 million, to $6.6 million from $4.9 million. |
| |
| • | FFO Core per diluted common share and Operating Partnership ("OP") unit was $0.29, as compared to $0.28 per diluted common share and OP unit for the same period of 2013. FFO Core excludes non-cash share-based compensation expense related to the expected vesting of restricted share and unit grants of $1.2 million and $0.3 million, or $0.05 and $0.02 per diluted common share and OP unit in the second quarter of 2014 and 2013, respectively. FFO Core also excludes acquisition expenses of $0.2 million and $0.3 million in the second quarter of 2014 and 2013, respectively, and includes rental support payments of $0.1 million in 2014. |
| |
| • | FFO increased 21% to $5.2 million in the second quarter. FFO per diluted common share and OP unit was $0.22 in the second quarter 2014, as compared to $0.24 per diluted common share and OP unit for the second quarter 2013. |
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| • | Net Income was $1.3 million or $0.06 per diluted common share as compared to $1.0 million, or $0.06 per diluted common share in the prior year. |
| |
| • | Total revenues increased 20% to $17.7 million compared to $14.8 million. |
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| • | Property net operating income ("NOI") increased by 20% to $11.3 million as compared to $9.4 million. |
Leasing Activity
The leasing team signed 102 leases totaling 220,513 square feet in new, expansion, and renewal leases in the second quarter of 2014 as compared to 87 leases totaling 207,609 square feet in the second quarter of 2013. The average lease size in the second quarter of 2014 was 2,162 square feet with the total lease value added increasing 28.7% to $14.8 million from the first quarter of 2014.
The Company’s total occupancy was 86.0% as of the end of the second quarter 2014, up 20 basis points and 40 basis points as compared to the first quarter of 2014 and the prior year, respectively. The physical occupancy of the Operating Portfolio, which excludes new acquisitions and properties that are undergoing significant redevelopment or re-tenanting, was 86.0% as of June 30, 2014, compared to 86.0% and 86.9% in the previous quarter and prior year, respectively.
Subsequent Events
On July 1, 2014, the Company acquired Heritage Trace Plaza, for approximately $20.1 million in cash and net prorations. The 70,431 square foot, Class “A” property was 98% leased at the time of purchase and is located in Fort Worth, Texas. The acquisition is expected to contribute to cash flow beginning with the third quarter of this year. Proceeds from Whitestone's credit facility of $20.0 million were used for the acquisition and Whitestone's remaining borrowing capacity was $17.2 million.
Community Centered PropertiesTM Portfolio Statistics
As of June 30, 2014, Whitestone owned 60 Community Centered PropertiesTM with 5.0 million square feet of gross leasable area, including six 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 June 30, 2014, provided a 47% premium rental rate compared to Whitestone's larger space tenants. As of June 30, 2014, the Company serviced 1,232 tenants throughout its portfolio. No single tenant accounted for more than 1.9% of the Company's annualized base rental revenues as of June 30, 2014.
Balance Sheet and Liquidity
As of June 30, 2014, Whitestone had $263.6 million of real estate debt. Real estate debt as a percentage of total market capitalization was 44% as of June 30, 2014 and the Company's ratio of EBITDA to interest expense, excluding amortization of loan fees, was 3.4x in the second quarter of 2014.
Whitestone had 43 properties unencumbered by mortgage debt as of June 30, 2014, with an undepreciated cost basis of $363.2 million. The total undepreciated value of the Company's real estate assets and real estate indebtedness was $548.5 million and $546.3 million as of June 30, 2014 and December 31, 2013, respectively. As of June 30, 2014, $176.3 million, or approximately 67%, of the Company's debt was subject to fixed interest rates. The Company's weighted average interest rate on all debt and on fixed-rate debt as of the end of the second quarter of 2014 was 3.3% and 3.8%, respectively.
At quarter end, Whitestone had $5.0 million of cash available on its balance sheet, and after giving effect to the acquisition of Heritage Trace Plaza described in "Subsequent Events" above, $17.2 million of available capacity under its credit facility.
For the second quarter ended June 30, 2014, under the Company's on-going At-The-Market equity distribution program, the Company sold 377,983 common shares, generating net proceeds of approximately $5.3 million.
Dividend
The Company declared a quarterly cash distribution of $0.285 per common share and OP unit for the third quarter of 2014, paid or to be paid in three equal installments of $0.095 in July, August and September. The dividend amount per share has remained the same since the distribution paid on July 8, 2010.
Earnings Guidance
Whitestone is reiterating its 2014 guidance:
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| • | FFO Core in the range of $1.09 to $1.18 per diluted share and OP unit; |
| |
| • | FFO in the range of $0.88 to $0.97 per diluted share and OP unit; and |
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| • | EPS in the range of $0.22 to $0.30 per diluted share. Guidance for EPS excludes gains on real estate transactions. |
Additional information on the Company’s 2014 financial outlook and a reconciliation of expected net income attributable to common shareholders to expected FFO and FFO Core are included in the financial tables accompanying this press release.
Webcast and Conference Call
Whitestone will host a webcast and conference call for investors and other interested parties on Wednesday, August 6, 2014 at 11:30 A.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 1-888-713-3596 for domestic participants or 1-913-312-1451 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 telephonic replay will be available through August 20, 2014, by dialing 1-877-870-5176 for domestic listeners or 1-858-384-5517 for international listeners and entering the pass code 7991053. 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 second 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. Whitestone focuses on value creation in its community centers, concentrating on local service-oriented tenants that comprise approximately 70% of its tenants. Whitestone’s diversified tenant base provides service offerings including medical, education, casual dining, and convenience services. The largest of its 1,232 tenants comprised less than 1.9% of its annualized base rental revenues as of June 30, 2014. Founded in 1998, the Company is internally managed with a portfolio of 60 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 made with the Securities and Exchange Commission, news releases and financial reports.
Forward-Looking Statements
Certain statements contained in this press release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company intends for all such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable. Such information is subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by the Company's use of forward-looking terminology, such as "may," "will," "plan," "expect," "intend," "anticipate," "believe," "continue" 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 meet its assumptions regarding its earnings guidance, including its ability to execute effectively its acquisition and disposition strategy, to continue to execute its development pipeline on schedule and at the expected costs, and its ability to grow its NOI as expected, which could be impacted by a number of factors, including, among other things, its ability to continue to renew leases or re-let space on attractive terms and to otherwise address its leasing rollover; 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 the Company's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents the Company files 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. The Company cannot guarantee the accuracy of any such forward-looking statements contained in this press release, and the Company does not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Non-GAAP Financial Measures
This release contains 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 explanations 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, ("NAREIT"), which states that FFO should represent net income 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 and service debt.
Management considers FFO a useful additional measure of performance for an equity REIT because it facilitates an understanding of the operating performance of its properties without giving effect to real estate depreciation and amortization, which assumes that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, management believes that FFO provides a more meaningful and accurate indication of the Company's performance and useful information for the investment community to compare Whitestone to other REITs since FFO is generally recognized as the industry standard for reporting the operations of REITs.
Other REITs may use different methodologies for calculating FFO, and accordingly, the Company's FFO may not be comparable to other REITs. The Company presents FFO per diluted share calculations that are based on the outstanding dilutive common shares plus the outstanding OP units for the periods presented.
FFO Core: Management believes that the computation of FFO in accordance with NAREIT's definition includes certain non-cash and non-comparable items that affect the Company's period-over-period performance. These items include, but are not limited to, legal settlements, non-cash share-based compensation expense, rent support agreement payments received from sellers on acquired assets and acquisition costs. In addition, the Company believes that FFO Core is a useful supplemental measure for the investing community to use in comparing the Company to other REITs as many REITs provide some form of adjusted or modified FFO. However, other REITs may use different adjustments, and the Company's FFO Core may not be comparable to the adjusted or modified FFO of other REITs.
NOI: Management believes that NOI is a useful measure of the Company's property operating performance. The Company defines NOI as operating revenues (rental and other revenues) less property and related expenses (property operation and maintenance and real estate taxes). Because NOI excludes general and administrative expenses, depreciation and amortization, involuntary conversion, interest expense, interest income, provision for income taxes, gain or loss on sale or disposition of assets and capital expenditures and leasing costs, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact to operations from trends in occupancy rates, rental rates and operating costs, providing perspective not immediately apparent from net income. The Company uses NOI to evaluate its operating performance since NOI allows the Company to evaluate the impact of factors, such as occupancy levels, lease structure, lease rates and tenant base, have on the Company's results, margins and returns. In addition, management believes that NOI provides useful information to the investment community about the Company's property and operating performance when compared to other REITs since NOI is generally recognized as a standard measure of property performance in the real estate industry. However, NOI should not be viewed as a measure of the Company's overall financial performance since it does not reflect general and administrative expenses, depreciation and amortization, involuntary conversion, interest expense, interest income, provision for income taxes, gain or loss on sale or disposition of assets, and the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company's properties. Other REITs may use different methodologies for calculating NOI, and accordingly, the Company's NOI may not be comparable to that of other REITs.
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. 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.
Contact Whitestone REIT:
Suzy Taylor, Director of Investor Relations
(713) 435-2219 ir@whitestonereit.com
Whitestone REIT and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
|
| | | | | | | | |
| | | June 30, 2014 | | December 31, 2013 |
| | | (unaudited) | | |
| ASSETS |
| Real estate assets, at cost | | | | |
| Property | | $ | 548,515 |
| | $ | 546,274 |
|
| Accumulated depreciation | | (70,602 | ) | | (66,008 | ) |
| Total real estate assets | | 477,913 |
| | 480,266 |
|
| Cash and cash equivalents | | 5,042 |
| | 6,491 |
|
| Marketable securities | | 982 |
| | 877 |
|
| Escrows and acquisition deposits | | 2,419 |
| | 2,095 |
|
| Accrued rents and accounts receivable, net of allowance for doubtful accounts | | 10,316 |
| | 9,929 |
|
| Unamortized lease commissions and loan costs | | 5,910 |
| | 6,227 |
|
| Prepaid expenses and other assets | | 2,543 |
| | 2,089 |
|
| Total assets | | $ | 505,125 |
| | $ | 507,974 |
|
| | | | | |
| LIABILITIES AND EQUITY |
| Liabilities: | | | | |
| Notes payable | | $ | 264,123 |
| | $ | 264,277 |
|
| Accounts payable and accrued expenses | | 12,405 |
| | 12,773 |
|
| Tenants' security deposits | | 3,807 |
| | 3,591 |
|
| Dividends and distributions payable | | 6,609 |
| | 6,418 |
|
| Total liabilities | | 286,944 |
| | 287,059 |
|
| Commitments and contingencies: | | — |
| | — |
|
| Equity: | | | | |
| Preferred shares, $0.001 par value per share; 50,000,000 shares authorized; none issued and outstanding as of June 30, 2014 and December 31, 2013 | | — |
| | — |
|
| Common shares, $0.001 par value per share; 400,000,000 shares authorized; 22,683,913 and 21,943,700 issued and outstanding as of June 30, 2014 and December 31, 2013, respectively | | 23 |
| | 22 |
|
| Additional paid-in capital | | 299,291 |
| | 291,571 |
|
| Accumulated deficit | | (84,911 | ) | | (75,721 | ) |
| Accumulated other comprehensive loss | | (242 | ) | | (54 | ) |
| Total Whitestone REIT shareholders' equity | | 214,161 |
| | 215,818 |
|
| Noncontrolling interest in subsidiary | | 4,020 |
| | 5,097 |
|
| Total equity | | 218,181 |
| | 220,915 |
|
| Total liabilities and equity | | $ | 505,125 |
| | $ | 507,974 |
|
Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(unaudited)
(in thousands, except per share data)
|
| | | | | | | | | | | | | | | | |
| | | Three Months Ended June 30, | | Six Months Ended June 30, |
| | | 2014 | | 2013 | | 2014 | | 2013 |
| Property revenues | | | | | | | | |
| Rental revenues | | $ | 13,839 |
| | $ | 11,812 |
| | $ | 27,812 |
| | $ | 22,813 |
|
| Other revenues | | 3,835 |
| | 2,983 |
| | 7,649 |
| | 5,851 |
|
| Total property revenues | | 17,674 |
| | 14,795 |
| | 35,461 |
| | 28,664 |
|
| | | | | | | | | |
| Property expenses | | | | | | | | |
| Property operation and maintenance | | 4,142 |
| | 3,348 |
| | 7,802 |
| | 6,413 |
|
| Real estate taxes | | 2,251 |
| | 2,012 |
| | 4,561 |
| | 3,810 |
|
| Total property expenses | | 6,393 |
| | 5,360 |
| | 12,363 |
| | 10,223 |
|
| | | | | | | | | |
| Other expenses (income) | | | | | | | | |
| General and administrative | | 3,582 |
| | 2,516 |
| | 6,539 |
| | 4,960 |
|
| Depreciation and amortization | | 3,908 |
| | 3,260 |
| | 7,816 |
| | 6,333 |
|
| Interest expense | | 2,449 |
| | 2,613 |
| | 4,821 |
| | 5,062 |
|
| Interest, dividend and other investment income | | (19 | ) | | (69 | ) | | (40 | ) | | (88 | ) |
| Total other expense | | 9,920 |
| | 8,320 |
| | 19,136 |
| | 16,267 |
|
| | | | | | | | | |
| Income before loss on disposal of assets and income taxes | | 1,361 |
| | 1,115 |
| | 3,962 |
| | 2,174 |
|
| | | | | | | | | |
| Provision for income taxes | | (57 | ) | | (72 | ) | | (141 | ) | | (137 | ) |
| Loss on sale or disposal of assets | | (24 | ) | | (40 | ) | | (109 | ) | | (48 | ) |
| | | | | | | | | |
| Net income | | 1,280 |
| | 1,003 |
| | 3,712 |
| | 1,989 |
|
| | | | | | | | | |
| Less: Net income attributable to noncontrolling interests | | 27 |
| | 33 |
| | 87 |
| | 70 |
|
| | | | | | | | | |
| Net income attributable to Whitestone REIT | | $ | 1,253 |
| | $ | 970 |
| | $ | 3,625 |
| | $ | 1,919 |
|
Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(unaudited)
(in thousands, except per share data)
|
| | | | | | | | | | | | | | | | |
| | | Three Months Ended June 30, | | Six Months Ended June 30, |
| | | 2014 | | 2013 | | 2014 | | 2013 |
| Basic and Diluted Earnings Per Share: | | | | | | | | |
| Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares | | $ | 0.05 |
| | $ | 0.06 |
| | $ | 0.16 |
| | $ | 0.11 |
|
| | | | | | | | | |
| Weighted average number of common shares outstanding: | | | | | | | | |
| Basic | | 22,235 |
| | 16,891 |
| | 22,030 |
| | 16,855 |
|
| Diluted | | 22,443 |
| | 17,111 |
| | 22,192 |
| | 17,073 |
|
| | | | | | | | | |
| Distributions declared per common share / OP unit | | $ | 0.2850 |
| | $ | 0.2850 |
| | $ | 0.5700 |
| | $ | 0.5700 |
|
| | | | | | | | | |
| Consolidated Statements of Comprehensive Income | | | | | | | | |
| | | | | | | | | |
| Net income | | $ | 1,280 |
| | $ | 1,003 |
| | $ | 3,712 |
| | $ | 1,989 |
|
| | | | | | | | | |
| Other comprehensive gain (loss) | | | | | | | | |
| | | | | | | | | |
| Unrealized gain (loss) on cash flow hedging activities | | (259 | ) | | 761 |
| | (297 | ) | | 493 |
|
| Unrealized gain (loss) on available-for-sale marketable securities | | 22 |
| | (88 | ) | | 105 |
| | 215 |
|
| | | | | | | | | |
| Comprehensive income | | 1,043 |
| | 1,676 |
| | 3,520 |
| | 2,697 |
|
| | | | | | | | | |
| Less: Comprehensive income attributable to noncontrolling interests | | 23 |
| | 57 |
| | 82 |
| | 95 |
|
| | | | | | | | | |
| Comprehensive income attributable to Whitestone REIT | | $ | 1,020 |
| | $ | 1,619 |
| | $ | 3,438 |
| | $ | 2,602 |
|
|
| | | | | | | | |
Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited) (in thousands) |
| | | | | |
| | | Six Months Ended June 30, |
| | | 2014 | | 2013 |
| Cash flows from operating activities: | | | | |
| Net income | | $ | 3,712 |
| | $ | 1,989 |
|
| Adjustments to reconcile net income to net cash provided by operating activities: | | |
| | |
|
| Depreciation and amortization | | 7,816 |
| | 6,333 |
|
| Amortization of deferred loan costs | | 405 |
| | 554 |
|
| Amortization of notes payable discount | | 153 |
| | 299 |
|
| Gain on sale of marketable securities | | — |
| | (41 | ) |
| Loss on sale or disposal of assets and properties | | 109 |
| | 48 |
|
| Bad debt expense | | 1,051 |
| | 715 |
|
| Share-based compensation | | 1,564 |
| | 667 |
|
| Changes in operating assets and liabilities: | | | | |
| Escrows and acquisition deposits | | (324 | ) | | 1,619 |
|
| Accrued rent and accounts receivable | | (1,438 | ) | | (966 | ) |
| Unamortized lease commissions | | (570 | ) | | (517 | ) |
| Prepaid expenses and other assets | | 334 |
| | 246 |
|
| Accounts payable and accrued expenses | | (797 | ) | | (2,990 | ) |
| Tenants' security deposits | | 216 |
| | 324 |
|
| Net cash provided by operating activities | | 12,231 |
| | 8,280 |
|
| Cash flows from investing activities: | | |
| | |
|
| Acquisitions of real estate | | — |
| | (58,403 | ) |
| Additions to real estate | | (4,990 | ) | | (2,476 | ) |
| Proceeds from sales of marketable securities | | — |
| | 747 |
|
| Net cash used in investing activities | | (4,990 | ) | | (60,132 | ) |
| Cash flows from financing activities: | | |
| | |
|
| Distributions paid to common shareholders | | (12,598 | ) | | (9,639 | ) |
| Distributions paid to OP unit holders | | (310 | ) | | (363 | ) |
| Proceeds from issuance of common shares, net of offering costs | | 5,267 |
| | — |
|
| Payments of exchange offer costs | | (6 | ) | | (23 | ) |
| Proceeds from notes payable | | — |
| | 20,200 |
|
| Proceeds from revolving credit facility, net | | 3,000 |
| | 58,400 |
|
| Repayments of notes payable | | (4,019 | ) | | (15,844 | ) |
| Payments of loan origination costs | | — |
| | (1,403 | ) |
| Repurchase of common shares | | (24 | ) | | — |
|
| Net cash provided by (used in) financing activities | | (8,690 | ) | | 51,328 |
|
| Net decrease in cash and cash equivalents | | (1,449 | ) | | (524 | ) |
| Cash and cash equivalents at beginning of period | | 6,491 |
| | 6,544 |
|
| Cash and cash equivalents at end of period | | $ | 5,042 |
| | $ | 6,020 |
|
Whitestone REIT and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS Supplemental Disclosures (unaudited) (in thousands) |
| | | | | | | | |
| | | Six Months Ended June 30, |
| | | 2014 | | 2013 |
| Supplemental disclosure of cash flow information: | | |
| | |
|
| Cash paid for interest | | $ | 4,447 |
| | $ | 4,597 |
|
| Cash paid for taxes | | 238 |
| | 237 |
|
| Non cash investing and financing activities: | | |
| | |
|
| Disposal of fully depreciated real estate | | $ | 2,560 |
| | $ | 185 |
|
| Financed insurance premiums | | $ | 888 |
| | $ | 883 |
|
| Value of shares issued under dividend reinvestment plan | | $ | 50 |
| | $ | 47 |
|
| Accrued offering costs | | $ | — |
| | $ | 13 |
|
| Value of common shares exchanged for OP units | | $ | 870 |
| | $ | 1,056 |
|
| Change in fair value of available-for-sale securities | | $ | 105 |
| | $ | 215 |
|
| Change in fair value of cash flow hedge | | $ | (297 | ) | | $ | 493 |
|
| Debt assumed with acquisitions of real estate | | $ | — |
| | $ | 11,100 |
|
| Interest supplement assumed with acquisition of real estate | | $ | — |
| | $ | 932 |
|
Whitestone REIT and Subsidiaries
RECONCILIATION OF NON-GAAP MEASURES
(in thousands, except per share and per unit data)
|
| | | | | | | | | | | | | | | | |
| | | Three Months Ended June 30, | | Six Months Ended June 30, |
| | | 2014 | | 2013 | | 2014 | | 2013 |
| FFO AND FFO CORE | | | | | | | | |
| Net income attributable to Whitestone REIT | | $ | 1,253 |
| | $ | 970 |
| | $ | 3,625 |
| | $ | 1,919 |
|
| Depreciation and amortization of real estate assets | | 3,871 |
| | 3,239 |
| | 7,772 |
| | 6,289 |
|
| Loss on disposal of assets | | 24 |
| | 40 |
| | 109 |
| | 48 |
|
| Net income attributable to noncontrolling interests | | 27 |
| | 33 |
| | 87 |
| | 70 |
|
| FFO | | 5,175 |
| | 4,282 |
| | 11,593 |
| | 8,326 |
|
| | | | | | | | | |
| Non cash share-based compensation expense | | 1,234 |
| | 311 |
| | 1,607 |
| | 667 |
|
| Acquisition costs | | 162 |
| | 344 |
| | 308 |
| | 482 |
|
| Rent support agreement payments received | | 76 |
| | — |
| | 156 |
| | — |
|
| FFO-Core | | $ | 6,647 |
| | $ | 4,937 |
| | $ | 13,664 |
| | $ | 9,475 |
|
| | | | | | | | | |
| FFO PER SHARE AND OP UNIT CALCULATION: | | | | | | | | |
| Numerator: | | | | | | | | |
| FFO | | $ | 5,175 |
| | $ | 4,282 |
| | $ | 11,593 |
| | $ | 8,326 |
|
| Distributions paid on unvested restricted common shares | | (54 | ) | | (11 | ) | | (73 | ) | | (22 | ) |
| FFO excluding amounts attributable to unvested restricted common shares | | $ | 5,121 |
| | $ | 4,271 |
| | $ | 11,520 |
| | $ | 8,304 |
|
| FFO-Core excluding amounts attributable to unvested restricted common shares | | $ | 6,593 |
| | $ | 4,926 |
| | $ | 13,591 |
| | $ | 9,453 |
|
| | | | | | | | | |
| Denominator: | | | | | | | | |
| Weighted average number of total common shares - basic | | 22,235 |
| | 16,891 |
| | 22,030 |
| | 16,855 |
|
| Weighted average number of total noncontrolling OP units - basic | | 507 |
| | 586 |
| | 531 |
| | 619 |
|
| Weighted average number of total commons shares and noncontrolling OP units - basic | | 22,742 |
| | 17,477 |
| | 22,561 |
| | 17,474 |
|
| | | | | | | | | |
| Effect of dilutive securities: | | | | | | | | |
| Unvested restricted shares | | 208 |
| | 220 |
| | 162 |
| | 218 |
|
| Weighted average number of total common shares and noncontrolling OP units - dilutive | | 22,950 |
| | 17,697 |
| | 22,723 |
| | 17,692 |
|
| | | | | | | | | |
| FFO per common share and OP unit - basic | | $ | 0.23 |
| | $ | 0.24 |
| | $ | 0.51 |
| | $ | 0.48 |
|
| FFO per common share and OP unit - diluted | | $ | 0.22 |
| | $ | 0.24 |
| | $ | 0.51 |
| | $ | 0.47 |
|
| | | | | | | | | |
| FFO-Core per common share and OP unit - basic | | $ | 0.29 |
| | $ | 0.28 |
| | $ | 0.60 |
| | $ | 0.54 |
|
| FFO-Core per common share and OP unit - diluted | | $ | 0.29 |
| | $ | 0.28 |
| | $ | 0.60 |
| | $ | 0.53 |
|
|
| | | | | | | | | | | | | | | | |
| | | Three Months Ended June 30, | | Six Months Ended June 30, |
| | | 2014 | | 2013 | | 2014 | | 2013 |
| PROPERTY NET OPERATING INCOME | | | | | | | | |
| | | | | | | | | |
| Net income attributable to Whitestone REIT | | $ | 1,253 |
| | $ | 970 |
| | $ | 3,625 |
| | $ | 1,919 |
|
| General and administrative expenses | | 3,582 |
| | 2,516 |
| | 6,539 |
| | 4,960 |
|
| Depreciation and amortization | | 3,908 |
| | 3,260 |
| | 7,816 |
| | 6,333 |
|
| Interest expense | | 2,449 |
| | 2,613 |
| | 4,821 |
| | 5,062 |
|
| Interest, dividend and other investment income | | (19 | ) | | (69 | ) | | (40 | ) | | (88 | ) |
| Provision for income taxes | | 57 |
| | 72 |
| | 141 |
| | 137 |
|
| Loss on disposal of assets | | 24 |
| | 40 |
| | 109 |
| | 48 |
|
| Net income attributable to noncontrolling interests | | 27 |
| | 33 |
| | 87 |
| | 70 |
|
| NOI | | $ | 11,281 |
| | $ | 9,435 |
| | $ | 23,098 |
| | $ | 18,441 |
|
|
| | | | | | | | | | | | | | | | |
| EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION | | | | | | | | |
| | | | | | | | | |
| Net income attributable to Whitestone REIT | | $ | 1,253 |
| | $ | 970 |
| | $ | 3,625 |
| | $ | 1,919 |
|
| Depreciation and amortization | | 3,908 |
| | 3,260 |
| | 7,816 |
| | 6,333 |
|
| Interest expense | | 2,449 |
| | 2,613 |
| | 4,821 |
| | 5,062 |
|
| Provision for income taxes | | 57 |
| | 72 |
| | 141 |
| | 137 |
|
| Loss on disposal of assets | | 24 |
| | 40 |
| | 109 |
| | 48 |
|
| Net income attributable to noncontrolling interests | | 27 |
| | 33 |
| | 87 |
| | 70 |
|
| EBITDA | | $ | 7,718 |
| | $ | 6,988 |
| | $ | 16,599 |
|
| $ | 13,569 |
|
|
| | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| | | June 30, | | March 31, | | December 31, | | September 30, |
| | | 2014 | | 2014 | | 2013 | | 2013 |
| Net income attributable to Whitestone REIT | | $ | 1,253 |
| | $ | 2,372 |
| | $ | 1,261 |
| | $ | 614 |
|
| Depreciation and amortization | | 3,908 |
| | 3,908 |
| | 3,646 |
| | 3,450 |
|
| Interest expense | | 2,449 |
| | 2,372 |
| | 2,486 |
| | 2,602 |
|
| Provision for income taxes | | 57 |
| | 84 |
| | 78 |
| | 90 |
|
| Loss on disposal of assets | | 24 |
| | 85 |
| | 8 |
| | — |
|
| Net income attributable to noncontrolling interests | | 27 |
| | 60 |
| | 34 |
| | 21 |
|
| EBITDA | | $ | 7,718 |
| | $ | 8,881 |
| | $ | 7,513 |
| | $ | 6,777 |
|
Whitestone REIT and Subsidiaries OTHER FINANCIAL INFORMATION (in thousands, except number of properties and employees)
|
| | | | | | | | | | | | | | | | |
| | | Three Months Ended June 30, | | Six Months Ended June 30, |
| | | 2014 | | 2013 | | 2014 | | 2013 |
| | | | | | | | | |
| Other Financial Information: | | | | | | | | |
| | | | | | | | | |
Tenant improvements (1) | | $ | 1,167 |
| | $ | 782 |
| | $ | 2,260 |
| | $ | 1,705 |
|
Leasing commissions (1) | | $ | 295 |
| | $ | 194 |
| | $ | 651 |
| | $ | 556 |
|
| Scheduled debt principal payments | | $ | 325 |
| | $ | 767 |
| | $ | 730 |
| | $ | 1,526 |
|
| Straight line rent income | | $ | 110 |
| | $ | 242 |
| | $ | 476 |
| | $ | 467 |
|
| Market rent amortization income (loss) from acquired leases | | $ | (60 | ) | | $ | 16 |
| | $ | (151 | ) | | $ | 49 |
|
| Non-cash share-based compensation expense | | $ | 1,234 |
| | $ | 311 |
| | $ | 1,607 |
| | $ | 667 |
|
| Non-real estate depreciation and amortization | | $ | 36 |
| | $ | 21 |
| | $ | 44 |
| | $ | 44 |
|
| Amortization of loan fees | | $ | 203 |
| | $ | 281 |
| | $ | 405 |
| | $ | 554 |
|
| Acquisition costs | | $ | 162 |
| | $ | 344 |
| | $ | 308 |
| | $ | 482 |
|
| Undepreciated value of unencumbered properties | | $ | 363,235 |
| | $ | 256,343 |
| | $ | 363,235 |
| | $ | 256,343 |
|
| Number of unencumbered properties | | 43 |
| | 27 |
| | 43 |
| | 27 |
|
| Full time employees | | 78 |
| | 68 |
| | 78 |
| | 68 |
|
| |
(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, except per share amounts and percentages)
|
| | | | | | | | | | |
| | | As of June 30, 2014 |
| MARKET CAPITALIZATION: | | Percent of Total Equity | | Total Market Capitalization | | Percent of Total Market Capitalization |
| Equity Capitalization: | | | | | | |
| Common shares outstanding | | 98.0 | % | | 22,684 |
| | |
| Operating partnership units outstanding | | 2.0 | % | | 466 |
| | |
| Total | | 100.0 | % | | 23,150 |
| | |
| | | | | | | |
| Market price of common shares as of | | | | | | |
| June 30, 2014 | | | | $ | 14.91 |
| | |
| | | | | | | |
| Total equity capitalization | | | | 345,167 |
| | 57 | % |
| | | | | | | |
| Debt Capitalization: | | | | | | |
| Outstanding debt | | | | $ | 264,123 |
| | |
| Less: Cash and cash equivalents | | | | (5,042 | ) | | |
| | | | | 259,081 |
| | 43 | % |
| | | | | | | |
| Total Market Capitalization as of | | | | | | |
| June 30, 2014 | | | | $ | 604,248 |
| | 100 | % |
|
| | | | | | | | | | | | | | | | |
| SELECTED RATIOS: | | | | | | | | |
| | | Three Months Ended |
| | | June 30, 2014 | | March 31, 2014 | | December 31, 2013 | | September 30, 2013 |
| INTEREST COVERAGE RATIO | | | | | | | | |
| EBITDA/Interest Expense | | | | | | | | |
| EBITDA | | $ | 7,718 |
| | $ | 8,881 |
| | $ | 7,513 |
| | $ | 6,777 |
|
| Interest expense, excluding amortization of loan fees | | 2,246 |
| | 2,170 |
| | 2,264 |
| | 2,334 |
|
| Ratio of EBITDA to interest expense | | 3.4 |
| | 4.1 |
| | 3.3 |
| | 2.9 |
|
| | | | | | | | | |
| LEVERAGE RATIO | | | | | | | | |
| Debt/Undepreciated Book Value | | | | | | | | |
| Undepreciated real estate assets | | $ | 548,515 |
| | $ | 548,221 |
| | $ | 546,274 |
| | $ | 483,379 |
|
| | | | | | | | | |
| Outstanding debt | | $ | 264,123 |
| | $ | 264,649 |
| | $ | 264,277 |
| | $ | 266,260 |
|
| Less: Cash | | (5,042 | ) | | (3,442 | ) | | (6,491 | ) | | (9,506 | ) |
| Outstanding debt after cash | | $ | 259,081 |
| | $ | 261,207 |
| | $ | 257,786 |
| | $ | 256,754 |
|
| Ratio of debt to real estate assets | | 47 | % | | 48 | % | | 47 | % | | 53 | % |
Whitestone REIT and Subsidiaries
SUMMARY OF OUTSTANDING DEBT AND DEBT MATURITIES
TOTAL OUTSTANDING DEBT
(in thousands)
|
| | | | | | | | |
| Description | | June 30, 2014 | | December 31, 2013 |
| Fixed rate notes | | | | |
$10.5 million, LIBOR plus 2.00% Note, due September 24, 2018 (1) | | $ | 10,500 |
| | $ | 10,500 |
|
$50.0 million, 0.84% plus 1.75% to 2.50% Note, due February 3, 2017 (2) | | 50,000 |
| | 50,000 |
|
| $37.0 million 3.76% Note, due December 1, 2020 | | 36,550 |
| | 37,000 |
|
| $6.5 million 3.80% Note, due January 1, 2019 | | 6,434 |
| | 6,500 |
|
| $20.2 million 4.28% Note, due June 6, 2023 | | 20,200 |
| | 20,200 |
|
| $1.0 million 4.75% Note, due December 31, 2014 | | 1,000 |
| | 1,087 |
|
| $16.5 million 4.97% Note, due September 26, 2023 | | 16,450 |
| | 16,450 |
|
| $15.1 million 4.99% Note, due January 6, 2024 | | 15,060 |
| | 15,060 |
|
$9.2 million, Prime Rate less 2.00%, due December 29, 2017 (3) | | 7,882 |
| | 7,875 |
|
| $11.1 million 5.87% Note, due August 6, 2016 | | 11,754 |
| | 11,900 |
|
| $3.0 million 6.00% Note, due March 31, 2021 | | — |
| | 2,905 |
|
| $0.9 million 2.97% Note, due November 28, 2014 | | 493 |
| | — |
|
| Floating rate notes | | | | |
| Unsecured line of credit, LIBOR plus 1.75% to 2.50%, due February 3, 2017 | | 87,800 |
| | 84,800 |
|
| | | $ | 264,123 |
| | $ | 264,277 |
|
| |
(1) | Promissory note includes an interest rate swap that fixed the interest rate at 3.55% for the duration of the term. |
| |
(2) | Promissory note includes an interest rate swap that fixed the LIBOR portion of our $50 million term loan under our unsecured credit facility at 0.84%. |
| |
(3) | Promissory note includes an interest rate swap that fixed the interest rate at 5.72% for the duration of the term. As part of our acquisition of Paradise Plaza, we recorded a discount on the note of $1.3 million, which amortizes into interest expense over the life of the loan and results in an imputed interest rate of 4.13%. |
SCHEDULE OF DEBT MATURITIES AS OF JUNE 30, 2014
(in thousands)
|
| | | | | | | | | | | | | | | |
| Year | | Scheduled Amortization Payments | | Scheduled Maturities | | Total Scheduled Maturities | | Percentage of Debt Maturing |
| | | | | | | | | |
| 2014 | | $ | 1,200 |
| | $ | 1,000 |
| | $ | 2,200 |
| | 0.8 | % |
| 2015 | | 1,820 |
| | — |
| | 1,820 |
| | 0.7 | % |
| 2016 | | 2,104 |
| | 11,125 |
| | 13,229 |
| | 5.0 | % |
| 2017 | | 2,288 |
| | 145,638 |
| | 147,926 |
| | 56.0 | % |
| 2018 | | 2,296 |
| | 9,560 |
| | 11,856 |
| | 4.5 | % |
| 2019 and thereafter | | 6,795 |
| | 80,297 |
| | 87,092 |
| | 33.0 | % |
| Total | | $ | 16,503 |
| | $ | 247,620 |
| | $ | 264,123 |
| | 100.0 | % |
Whitestone REIT and Subsidiaries SUMMARY OF OCCUPANCY AND TOP TENANTS
|
| | | | | | | | | | | | | | | |
| | | Gross Leasable Area as of | | Occupancy % as of |
| Community Centered Properties | | June 30, 2014 | | June 30, 2014 | | March 31, 2014 | | December 31, 2013 | | September 30, 2013 |
| Retail | | 2,762,335 |
| | 88 | % | | 88 | % | | 90 | % | | 87 | % |
| Office/Flex | | 1,201,672 |
| | 87 | % | | 87 | % | | 91 | % | | 88 | % |
| Office | | 633,534 |
| | 76 | % | | 75 | % | | 75 | % | | 77 | % |
| Total - Operating Portfolio | | 4,597,541 |
| | 86 | % | | 86 | % | | 88 | % | | 86 | % |
Redevelopment, New Acquisitions (1) | | 369,968 |
| | 86 | % | | 83 | % | | 80 | % | | 77 | % |
| Total | | 4,967,509 |
| | 86 | % | | 86 | % | | 87 | % | | 85 | % |
| |
(1) | Includes (i) new acquisitions through the earlier of attainment of 90% occupancy or 18 months of ownership, and (ii) properties that are undergoing significant redevelopment or re-tenanting. |
|
| | | | | | | | | | | | | |
| Tenant Name | | Location | | Annualized Base Rental Revenue (in thousands) | | Percentage of Total Annualized Base Rental Revenues (1) | | Initial Lease Date | | Year Expiring |
Safeway Stores Incorporated (2) | | Phoenix | | $ | 1,061 |
| | 1.9 | % | | 7/12/2000, 5/8/1991 and 7/1/2000 | | 2020, 2020 and 2021 |
Bashas' Inc. (3) | | Phoenix | | 884 |
| | 1.6 | % | | 12/9/1993, 10/9/2004 and 4/1/2009 | | 2014, 2024 and 2029 |
Wells Fargo & Company (4) | | Phoenix | | 636 |
| | 1.1 | % | | 10/24/1996 and 4/16/1999 | | 2016 and 2018 |
| University of Phoenix | | San Antonio | | 510 |
| | 0.9 | % | | 10/18/2010 | | 2018 |
| Sports Authority | | San Antonio | | 495 |
| | 0.9 | % | | 1/1/2004 | | 2015 |
| Paul's Ace Hardware | | Phoenix | | 460 |
| | 0.8 | % | | 3/1/2008 | | 2018 |
Walgreens Co. (5) | | Phoenix | | 448 |
| | 0.8 | % | | 11/3/1996 and 11/2/1987 | | 2049 and 2027 |
Ross Dress for Less, Inc. (6) | | San Antonio, Phoenix and Houston | | 443 |
| | 0.8 | % | | 6/18/2012, 2/11/2009 and 2/7/2013 | | 2023, 2020 and 2023 |
| Rock Solid Images | | Houston | | 363 |
| | 0.7 | % | | 4/1/2004 | | 2015 |
| Pei Wei Asian Diner, LLC | | Phoenix | | 357 |
| | 0.6 | % | | 4/26/2004 | | 2019 |
| Super Bravo, Inc. | | Houston | | 349 |
| | 0.6 | % | | 6/15/2011 | | 2023 |
| Air Liquide America, L.P. | | Dallas | | 329 |
| | 0.6 | % | | 8/1/2001 | | 2018 |
| Sterling Jewelers, Inc. | | Phoenix | | 326 |
| | 0.6 | % | | 11/23/2004 | | 2020 |
KinderCare Learning Centers LLC (7) | | Phoenix | | 322 |
| | 0.6 | % | | 5/7/2001 and 7/15/2000 | | 2021 and 2035 |
| Midland Financial Co. | | Phoenix | | 320 |
| | 0.6 | % | | 1/1/2006 | | 2015 |
| | | | | $ | 7,303 |
| | 13.1 | % | | | | |
| |
(1) | Annualized Base Rental Revenues represents the monthly base rent as of June 30, 2014 for each applicable tenant multiplied by 12. |
| |
(2) | As of June 30, 2014, we had three leases with the same tenant occupying space at properties located in Phoenix. The annualized rental revenue for the lease that commenced on July 12, 2000, and is scheduled to expire in 2020, was $425,000, which represents 0.8% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on May 8, 1991, and is scheduled to expire in 2021, was $344,000, which represents 0.6% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on July 1, 2000, and is scheduled to expire in 2020, was $292,000, which represents 0.5% of our total annualized base rental revenue. |
| |
(3) | As of June 30, 2014, we had three leases with the same tenant occupying space at properties located in Phoenix. The annualized rental revenue for the lease that commenced on December 9, 1993, and is scheduled to expire in 2014, was $61,000, which represents 0.1% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on October 9, 2004, and is scheduled to expire in 2024, was $119,000, which represents 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on April 1, 2009, and is scheduled to expire in 2029, was $704,000, which represents 1.3% of our total annualized base rental revenue. |
| |
(4) | As of June 30, 2014, we had two leases with the same tenant occupying space at properties located in Phoenix. The annualized rental revenue for the lease that commenced on October 24, 1996, and is scheduled to expire in 2016, was $114,000, which represents 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on April 16, 1999, and is scheduled to expire in 2018, was $522,000, which represents 0.9% of our total annualized base rental revenue. |
| |
(5) | As of June 30, 2014, we had two leases with the same tenant occupying space at properties located in Phoenix. The annualized rental revenue for the lease that commenced on November 5, 1996, and is scheduled to expire in 2049, was $279,000, which represents 0.5% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on November 2, 1987, and is scheduled to expire in 2027, was $169,000, which represents 0.3% of our total annualized base rental revenue. |
| |
(6) | As of June 30, 2014, we had three leases with the same tenant occupying space at properties located in San Antonio, Phoenix and Houston. The annualized rental revenue for the lease that commenced on June 18, 2012, and is scheduled to expire in 2023, was $175,000, which represents 0.3% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on February 11, 2009, and is scheduled to expire in 2020, was $158,000, which represents 0.3% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on February 7, 2013, and is scheduled to expire in 2023, was $110,000, which represents 0.2% of our total annualized base rental revenue. |
| |
(7) | As of June 30, 2014, we had two leases with the same tenant occupying space at properties located in Phoenix. The annualized rental revenue for the lease that commenced on May 7, 2001, and is scheduled to expire in 2021, was $267,000, which represents 0.5% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on July 15, 2000, and is scheduled to expire in 2035, was $55,000, which represents 0.1% of our total annualized base rental revenue. |
Whitestone REIT and Subsidiaries SUMMARY OF LEASING ACTIVITY
|
| | | | | | | | | | | | | | | | |
| | | Three Months Ended June 30, | | Six Months Ended June 30, |
| | | 2014 | | 2013 | | 2014 | | 2013 |
| RENEWALS | | | | | | | | |
| Number of Leases | | 52 |
| | 37 |
| | 107 |
| | 82 |
|
Total Square Feet (1) | | 122,983 |
| | 88,161 |
| | 218,044 |
| | 162,048 |
|
| Average Square Feet | | 2,365 |
| | 2,383 |
| | 2,038 |
| | 1,976 |
|
| Total Lease Value | | $ | 6,161,000 |
| | $ | 5,373,000 |
| | $ | 10,828,000 |
| | $ | 8,922,000 |
|
| NEW LEASES | | | | | | | | |
| Number of Leases | | 50 |
| | 50 |
| | 108 |
| | 76 |
|
Total Square Feet (1) | | 97,530 |
| | 119,448 |
| | 234,189 |
| | 176,458 |
|
| Average Square Feet | | 1,951 |
| | 2,389 |
| | 2,168 |
| | 2,322 |
|
| Total Lease Value | | $ | 8,676,000 |
| | $ | 7,937,000 |
| | 15,506,000 |
| | 11,468,000 |
|
| TOTAL LEASES | | | | | | | | |
| Number of Leases | | 102 |
| | 87 |
| | 215 |
| | 158 |
|
Total Square Feet (1) | | 220,513 |
| | 207,609 |
| | 452,233 |
| | 338,506 |
|
| Average Square Feet | | 2,162 |
| | 2,386 |
| | 2,103 |
| | 2,142 |
|
| Total Lease Value | | $ | 14,837,000 |
| | $ | 13,310,000 |
| | $ | 26,334,000 |
| | $ | 20,390,000 |
|
| |
(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 (3) | | TI and Incentives per Sq. Ft. | | Contractual Rent Per Sq. Ft. (4) | | Prior Contractual Rent Per Sq. Ft. (5) | | Annual Increase (Decrease) in Contractual Rent | | Cash Basis Increase (Decrease) Over Prior Rent | | Annual Increase (Decrease) in Straight-lined Rent | | Straight-lined Basis Increase (Decrease) Over Prior Rent |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Comparable: (1) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Comparable Total Leases: | | | | | | | | | | | | | | | | | | | | | | | | |
| 2nd Quarter 2014 | | 66 |
| | $ | 6,378,848 |
| | 132,925 |
| | 3.0 |
| | $ | 293,446 |
| | $ | 2.21 |
| | $ | 15.03 |
| | $ | 15.09 |
| | $ | (8,300 | ) | | (0.4 | )% | | $ | 139,878 |
| | 7.5 | % |
| 1st Quarter 2014 | | 67 |
| | 5,659,344 |
| | 108,642 |
| | 3.3 |
| | 270,139 |
| | 2.49 |
| | 14.31 |
| | 13.71 |
| | 64,222 |
| | 4.4 | % | | 169,843 |
| | 12.0 | % |
| 4th Quarter 2013 | | 59 |
| | 4,135,630 |
| | 102,893 |
| | 2.5 |
| | 247,271 |
| | 2.40 |
| | 15.01 |
| | 14.81 |
| | 20,698 |
| | 1.4 | % | | 83,231 |
| | 5.7 | % |
| 3rd Quarter 2013 | | 53 |
| | 5,753,820 |
| | 156,660 |
| | 2.9 |
| | 534,534 |
| | 3.41 |
| | 12.91 |
| | 13.72 |
| | (127,771 | ) | | (5.9 | )% | | (60,495 | ) | | (2.9 | )% |
| Total - 12 months | | 245 |
| | $ | 21,927,642 |
| | 501,120 |
| | 2.9 |
| | $ | 1,345,390 |
| | $ | 2.68 |
| | $ | 14.21 |
| | $ | 14.31 |
| | $ | (51,151 | ) | | (0.7 | )% | | $ | 332,457 |
| | 4.9 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Comparable New Leases: | | | | | | | | | | | | | | | | | | | | | | | | |
| 2nd Quarter 2014 | | 17 |
| | $ | 1,396,045 |
| | 20,928 |
| | 3.6 |
| | $ | 177,422 |
| | $ | 8.48 |
| | $ | 17.99 |
| | $ | 17.36 |
| | $ | 13,378 |
| | 3.6 | % | | $ | 75,688 |
| | 26.3 | % |
| 1st Quarter 2014 | | 18 |
| | 1,865,865 |
| | 35,063 |
| | 4.5 |
| | 177,176 |
| | 5.05 |
| | 12.08 |
| | 11.42 |
| | 23,296 |
| | 5.8 | % | | 65,137 |
| | 18.0 | % |
| 4th Quarter 2013 | | 13 |
| | 1,145,166 |
| | 15,764 |
| | 4.4 |
| | 204,187 |
| | 12.95 |
| | 18.98 |
| | 18.33 |
| | 10,184 |
| | 3.5 | % | | 18,471 |
| | 6.7 | % |
| 3rd Quarter 2013 | | 21 |
| | 1,313,538 |
| | 34,583 |
| | 3.0 |
| | 117,321 |
| | 3.39 |
| | 10.99 |
| | 12.30 |
| | (45,062 | ) | | (10.7 | )% | | (28,611 | ) | | (7.0 | )% |
| Total - 12 months | | 69 |
| | $ | 5,720,614 |
| | 106,338 |
| | 3.8 |
| | $ | 676,106 |
| | $ | 6.36 |
| | $ | 13.91 |
| | $ | 13.90 |
| | $ | 1,796 |
| | 0.1 | % | | $ | 130,685 |
| | 9.8 | % |
| | | | | | | | | | | | | | | | |
|
| | | | | | | | |
| Comparable Renewal Leases: | | | | | | | | | | | | | | | | | | | | | | | | |
| 2nd Quarter 2014 | | 49 |
| | $ | 4,982,803 |
| | 111,997 |
| | 2.8 |
| | $ | 116,024 |
| | $ | 1.04 |
| | $ | 14.47 |
| | $ | 14.67 |
| | $ | (21,678 | ) | | (1.4 | )% | | $ | 64,190 |
| | 4.1 | % |
| 1st Quarter 2014 | | 49 |
| | 3,793,479 |
| | 73,579 |
| | 2.7 |
| | 92,963 |
| | 1.26 |
| | 15.37 |
| | $ | 14.81 |
| | 40,926 |
| | 3.8 | % | | 104,706 |
| | 9.9 | % |
| 4th Quarter 2013 | | 46 |
| | 2,990,464 |
| | 87,129 |
| | 2.1 |
| | 43,084 |
| | 0.49 |
| | 14.29 |
| | 14.17 |
| | 10,514 |
| | 0.8 | % | | 64,760 |
| | 5.5 | % |
| 3rd Quarter 2013 | | 32 |
| | 4,440,282 |
| | 122,077 |
| | 2.9 |
| | 417,213 |
| | 3.42 |
| | 13.45 |
| | 14.13 |
| | (82,709 | ) | | (4.8 | )% | | (31,884 | ) | | (1.9 | )% |
| Total - 12 months | | 176 |
| | $ | 16,207,028 |
| | 394,782 |
| | 2.7 |
| | $ | 669,284 |
| | $ | 1.70 |
| | $ | 14.28 |
| | $ | 14.42 |
|
| $ | (52,947 | ) | | (1.0 | )% | | $ | 201,772 |
| | 3.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
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 Sq. Ft. | | Contractual Rent Per Sq. Ft. (4) | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-comparable: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-Comparable Total Leases: | | | | | | | | | | | | | | | | | | | | | | | | |
| 2nd Quarter 2014 | | 36 |
| | $ | 8,457,970 |
| | 95,059 |
| | 4.9 |
| | $ | 1,137,401 |
| | $ | 11.97 |
| | $ | 14.47 |
| | | | | | | | | | |
| 1st Quarter 2014 | | 46 |
| | 5,837,450 |
| | 126,678 |
| | 3.1 |
| | 723,376 |
| | 5.71 |
| | 12.43 |
| | | | | | | | | | |
| 4th Quarter 2013 | | 32 |
| | 6,617,801 |
| | 142,661 |
| | 6.1 |
| | 702,071 |
| | 4.92 |
| | 7.70 |
| | | | | | | | | | |
| 3rd Quarter 2013 | | 45 |
| | 7,256,999 |
| | 109,219 |
| | 3.9 |
| | 1,120,481 |
| | 10.26 |
| | 12.48 |
| | | | | | | | | | |
| Total - 12 months | | 159 |
| | $ | 28,170,220 |
| | 473,617 |
| | 4.5 |
| | $ | 3,683,329 |
| | $ | 7.78 |
| | $ | 11.43 |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-Comparable New Leases: | | | | | | | | | | | | | | | | | | | | | | | | |
| 2nd Quarter 2014 | | 33 |
| | $ | 7,279,225 |
| | 82,269 |
| | 4.9 |
| | $ | 1,112,628 |
| | $ | 13.52 |
| | $ | 14.17 |
| | | | | | | | | | |
| 1st Quarter 2014 | | 40 |
| | 4,964,491 |
| | 105,196 |
| | 3.1 |
| | 652,989 |
| | 6.21 |
| | 12.44 |
| | | | | | | | | | |
| 4th Quarter 2013 | | 32 |
| | 6,617,801 |
| | 142,661 |
| | 6.1 |
| | 702,071 |
| | 4.92 |
| | 7.70 |
| | | | | | | | | | |
| 3rd Quarter 2013 | | 43 |
| | 7,223,892 |
| | 106,019 |
| | 4.0 |
| | 1,120,170 |
| | 10.57 |
| | 12.53 |
| | | | | | | | | | |
| Total - 12 months | | 148 |
| | $ | 26,085,409 |
| | 436,145 |
| | 4.6 |
| | $ | 3,587,858 |
| | $ | 8.23 |
| | $ | 11.24 |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-Comparable Renewal Leases: | | | | | | | | | | | | | | | | | | | | | | | | |
| 2nd Quarter 2014 | | 3 |
| | $ | 1,178,745 |
| | 12,790 |
| | 5.2 |
| | $ | 24,773 |
| | $ | 1.94 |
| | $ | 16.40 |
| | | | | | | | | | |
| 1st Quarter 2014 | | 6 |
| | 872,959 |
| | 21,482 |
| | 3.0 |
| | 70,387 |
| | 3.28 |
| | 12.42 |
| | | | | | | | | | |
| 4th Quarter 2013 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | | | | | | | | | |
| 3rd Quarter 2013 | | 2 |
| | 33,107 |
| | 3,200 |
| | 0.9 |
| | 311 |
| | 0.10 |
| | 10.50 |
| | | | | | | | | | |
| Total - 12 months | | 11 |
| | $ | 2,084,811 |
| | 37,472 |
| | 3.6 |
| | $ | 95,471 |
| | $ | 2.55 |
| | $ | 13.61 |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Whitestone REIT and Subsidiaries SUMMARY OF LEASING ACTIVITY (continued) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Type | | Number of Leases Signed | | Lease Value Signed | | GLA Signed | | Weighted Average Lease Term (2) | | TI and Incentives (3) | | TI and Incentives per Sq. Ft. | | Contractual Rent Per Sq. Ft. (4) | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| New & Renewal | | | | | | | | | | | | | | | | | | | | | | | | |
| 2nd Quarter 2014 | | 102 |
| | $ | 14,836,818 |
| | 227,984 |
| | 3.8 |
| | $ | 1,430,847 |
| | $ | 6.28 |
| | $ | 14.80 |
| | | | | | | | | | |
| 1st Quarter 2014 | | 113 |
| | 11,496,794 |
| | 235,320 |
| | 3.2 |
| | 993,515 |
| | 4.22 |
| | 13.30 |
| | | | | | | | | | |
| 4th Quarter 2013 | | 91 |
| | 10,753,431 |
| | 245,554 |
| | 4.6 |
| | 949,342 |
| | 3.87 |
| | 10.76 |
| | | | | | | | | | |
| 3rd Quarter 2013 | | 98 |
| | 13,010,819 |
| | 265,879 |
| | 3.3 |
| | 1,655,015 |
| | 6.22 |
| | 12.73 |
| | | | | | | | | | |
| Total - 12 months | | 404 |
| | $ | 50,097,862 |
| | 974,737 |
| | 3.7 |
| | $ | 5,028,719 |
| | $ | 5.16 |
| | $ | 12.85 |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| New | | | | | | | | | | | | | | | | | | | | | | | | |
| 2nd Quarter 2014 | | 50 |
| | $ | 8,675,270 |
| | 103,197 |
| | 4.6 |
| | $ | 1,290,050 |
| | $ | 12.50 |
| | $ | 14.95 |
| | | | | | | | | | |
| 1st Quarter 2014 | | 58 |
| | 6,830,356 |
| | 140,259 |
| | 3.4 |
| | 830,165 |
| | 5.92 |
| | 12.35 |
| | | | | | | | | | |
| 4th Quarter 2013 | | 45 |
| | 7,762,967 |
| | 158,425 |
| | 5.9 |
| | 906,258 |
| | 5.72 |
| | 8.82 |
| | | | | | | | | | |
| 3rd Quarter 2013 | | 64 |
| | 8,537,430 |
| | 140,602 |
| | 3.7 |
| | 1,237,491 |
| | 8.80 |
| | 12.16 |
| | | | | | | | | | |
| Total - 12 months | | 217 |
| | $ | 31,806,023 |
| | 542,483 |
| | 4.5 |
| | $ | 4,263,964 |
| | $ | 7.86 |
| | $ | 11.76 |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Renewal | | | | | | | | | | | | | | | | | | | | | | | | |
| 2nd Quarter 2014 | | 52 |
| | $ | 6,161,548 |
| | 124,787 |
| | 3.1 |
| | $ | 140,797 |
| | $ | 1.13 |
| | $ | 14.67 |
| | | | | | | | | | |
| 1st Quarter 2014 | | 55 |
| | 4,666,438 |
| | 95,061 |
| | 2.8 |
| | 163,350 |
| | 1.72 |
| | 14.70 |
| | | | | | | | | | |
| 4th Quarter 2013 | | 46 |
| | 2,990,464 |
| | 87,129 |
| | 2.1 |
| | 43,084 |
| | 0.49 |
| | 14.29 |
| | | | | | | | | | |
| 3rd Quarter 2013 | | 34 |
| | 4,473,389 |
| | 125,277 |
| | 2.0 |
| | 417,524 |
| | 3.33 |
| | 13.38 |
| | | | | | | | | | |
| Total - 12 months | | 187 |
| | $ | 18,291,839 |
| | 432,254 |
| | 2.8 |
| | $ | 764,755 |
| | $ | 1.77 |
| | $ | 14.23 |
| | | | | | | | | | |
| |
(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 and Subsidiaries LEASE EXPIRATIONS(1)
|
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Annualized Base Rent(2) |
| | | | | Gross Leasable Area | | as of June 30, 2014 |
| Year | | Number of
Leases | | Square Feet | | Percent
of Gross Leasable Area | | Amount
(in thousands) | | Percent of
Total | | Per Square Foot |
| 2014 | | 242 |
| | 598,533 |
| | 12.0 | % | | $ | 7,266 |
| | 13.2 | % | | $ | 12.14 |
|
| 2015 | | 273 |
| | 744,556 |
| | 15.0 | % | | 9,268 |
| | 16.9 | % | | 12.45 |
|
| 2016 | | 220 |
| | 587,432 |
| | 11.8 | % | | 7,969 |
| | 14.5 | % | | 13.57 |
|
| 2017 | | 163 |
| | 501,342 |
| | 10.1 | % | | 7,292 |
| | 13.3 | % | | 14.54 |
|
| 2018 | | 121 |
| | 558,751 |
| | 11.2 | % | | 7,410 |
| | 13.5 | % | | 13.26 |
|
| 2019 | | 112 |
| | 378,404 |
| | 7.6 | % | | 5,279 |
| | 9.6 | % | | 13.95 |
|
| 2020 | | 27 |
| | 234,257 |
| | 4.7 | % | | 2,587 |
| | 4.7 | % | | 11.04 |
|
| 2021 | | 18 |
| | 146,643 |
| | 3.0 | % | | 1,856 |
| | 3.4 | % | | 12.66 |
|
| 2022 | | 23 |
| | 159,310 |
| | 3.2 | % | | 2,003 |
| | 3.7 | % | | 12.57 |
|
| 2023 | | 13 |
| | 135,753 |
| | 2.7 | % | | 1,251 |
| | 2.3 | % | | 9.22 |
|
| Total | | 1,212 |
| | 4,044,981 |
| | 81.3 | % | | $ | 52,181 |
| | 95.1 | % | | $ | 12.90 |
|
| |
(1) | Lease expirations table reflects rents in place as of June 30, 2014, and does not include option periods. |
| |
(2) | Annualized Base Rent represents the monthly base rent as of June 30, 2014 for each tenant multiplied by 12. |
Whitestone REIT and Subsidiaries 2014 Financial Guidance
|
| | | | | | | | | | | | |
| Guidance Summary |
| | | | | |
| | | 2013 | | 2014 Projected |
| | | Actual | | Low | | High |
Base Property NOI (1) | | $ | 38,635,000 |
| | $ | 45,000,000 |
| | $ | 46,300,000 |
|
| | | | | | | |
Same Store Property NOI Growth (2) | | | | 4 | % | | 7 | % |
| | | | | | | |
Base Property % Leased at period end (1) | | 86.8 | % | | 87.0 | % | | 89.0 | % |
| | | | | | | |
| Acquisitions | | $ | 131,000,000 |
| | $ | 40,000,000 |
| | $ | 80,000,000 |
|
| Dispositions | | $ | — |
| | $ | 10,000,000 |
| | $ | 20,000,000 |
|
| New Development | | $ | — |
| | $ | 10,000,000 |
| | $ | 20,000,000 |
|
| | | | | | | |
| FFO Core per common share and OP unit | | $ | 1.10 |
| | $ | 1.09 |
| | $ | 1.18 |
|
| | | | | | | |
| FFO per common share and OP unit | | $ | 0.91 |
| | $ | 0.88 |
| | $ | 0.97 |
|
|
| | | | | | | | |
| Guidance Rollforward |
| | | | | |
| | | 2014 Projected |
| | | Low | | High |
| 2013 FFO Core per common share and OP unit | | $ | 1.10 |
| | $ | 1.10 |
|
| | | | | |
| NOI | | | | |
Same Store Property Growth (2) | | 0.06 |
| | 0.11 |
|
Full Year NOI from 2013 Acquisitions (3) | | 0.20 |
| | 0.22 |
|
| 2014 Acquisitions | | 0.05 |
| | 0.10 |
|
| 2014 Dispositions | | (0.01 | ) | | (0.02 | ) |
| | | | | |
| General and administrative | | (0.04 | ) | | (0.05 | ) |
| Net Interest Expense | | (0.03 | ) | | (0.04 | ) |
| | | | | |
| Before change in weighted average shares | | $ | 1.33 |
| | $ | 1.42 |
|
| | | | | |
| Change in Weighted Average Shares | | (0.24 | ) | | (0.24 | ) |
| | | | | |
| 2014 FFO Core Range | | $ | 1.09 |
| | $ | 1.18 |
|
| |
(1) | Reflects properties owned as of December 31, 2013. |
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(2) | Reflects properties owned for the full year ended December 31, 2013. |
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(3) | Reflects difference between full year of NOI for properties acquired in 2013 and partial year in 2013. |
Whitestone REIT and Subsidiaries 2014 Financial Guidance (continued)
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| | | | | | | | | | | | |
| Reconciliation of FFO and FFO Core Guidance to Net Income Per Share |
| (All numbers are per diluted share) |
| | | | | | | |
| Funds from Operations Guidance: | | Full Year 2013 | | Full Year 2014 Projected |
| | | Actual | | Low | | High |
| Net income attributable to Whitestone REIT | | $ | 0.20 |
| | $ | 0.21 |
| | $ | 0.30 |
|
| | | | | | | |
| Adjustments to reconcile net income to FFO: | | | | | | |
| Depreciation expense, amortization and other amounts | | 0.71 |
| | 0.67 |
| | 0.67 |
|
| | | | | | | |
| Funds from Operations | | $ | 0.91 |
| | $ | 0.88 |
| | $ | 0.97 |
|
| | | | | | | |
| Adjustments to reconcile FFO to FFO Core: | | | | | | |
| All other non-core amounts | | 0.19 |
| | 0.21 |
| | 0.21 |
|
| | | | | | | |
| Funds from Operations Core | | $ | 1.10 |
| | $ | 1.09 |
| | $ | 1.18 |
|
Whitestone REIT and Subsidiaries Property Details As of June 30, 2014 |
| | | | | | | | | | | | | | | | | | | | | | |
Community Name | | Location | | Year Built/ Renovated | | Gross Leasable Area | | Percent Occupied | | 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 | % | | $ | 918 |
| | $ | 12.64 |
| | $ | 12.64 |
|
| Anthem Marketplace | | Phoenix | | 2000 | | 113,293 |
| | 100 | % | | 1,532 |
| | 13.52 |
| | 13.52 |
|
| Bellnott Square | | Houston | | 1982 | | 73,930 |
| | 37 | % | | 307 |
| | 11.22 |
| | 11.04 |
|
| Bissonnet Beltway | | Houston | | 1978 | | 29,205 |
| | 95 | % | | 324 |
| | 11.68 |
| | 11.21 |
|
| Centre South | | Houston | | 1974 | | 39,134 |
| | 89 | % | | 329 |
| | 9.45 |
| | 8.90 |
|
| The Citadel | | Phoenix | | 1985 | | 28,547 |
| | 91 | % | | 434 |
| | 16.71 |
| | 17.51 |
|
| Desert Canyon | | Phoenix | | 2000 | | 62,533 |
| | 80 | % | | 612 |
| | 12.23 |
| | 12.49 |
|
| Fountain Square | | Phoenix | | 1986 | | 118,209 |
| | 75 | % | | 1,546 |
| | 17.44 |
| | 16.34 |
|
| Gilbert Tuscany Village | | Phoenix | | 2009 | | 49,415 |
| | 63 | % | | 491 |
| | 15.77 |
| | 18.69 |
|
| Holly Knight | | Houston | | 1984 | | 20,015 |
| | 100 | % | | 371 |
| | 18.54 |
| | 18.09 |
|
| Headquarters Village | | Dallas | | 2009 | | 89,134 |
| | 85 | % | | 2,052 |
| | 27.08 |
| | 27.61 |
|
| Kempwood Plaza | | Houston | | 1974 | | 101,008 |
| | 90 | % | | 816 |
| | 8.98 |
| | 8.87 |
|
| Lion Square | | Houston | | 1980 | | 117,592 |
| | 77 | % | | 972 |
| | 10.73 |
| | 10.93 |
|
| MarketPlace At Central | | Phoenix | | 2000 | | 111,130 |
| | 91 | % | | 633 |
| | 6.26 |
| | 7.59 |
|
| Mercado at Scottsdale Ranch | | Phoenix | | 1987 | | 118,730 |
| | 93 | % | | 1,577 |
| | 14.28 |
| | 14.28 |
|
| Paradise Plaza | | Phoenix | | 1993 | | 125,898 |
| | 94 | % | | 1,677 |
| | 14.17 |
| | 14.26 |
|
| Pinnacle of Scottsdale | | Phoenix | | 1991 | | 113,108 |
| | 94 | % | | 1,911 |
| | 17.97 |
| | 18.12 |
|
| Providence | | Houston | | 1980 | | 90,327 |
| | 88 | % | | 709 |
| | 8.92 |
| | 8.18 |
|
| Shaver | | Houston | | 1978 | | 21,926 |
| | 93 | % | | 260 |
| | 12.75 |
| | 12.01 |
|
| Shops at Pecos Ranch | | Phoenix | | 2009 | | 78,767 |
| | 94 | % | | 1,549 |
| | 20.92 |
| | 20.92 |
|
| Shops at Starwood | | Dallas | | 2006 | | 55,385 |
| | 97 | % | | 1,373 |
| | 25.56 |
| | 27.10 |
|
| South Richey | | Houston | | 1980 | | 69,928 |
| | 100 | % | | 647 |
| | 9.25 |
| | 9.70 |
|
| Spoerlein Commons | | Chicago | | 1987 | | 41,455 |
| | 88 | % | | 757 |
| | 20.75 |
| | 20.83 |
|
| SugarPark Plaza | | Houston | | 1974 | | 95,032 |
| | 99 | % | | 1,001 |
| | 10.64 |
| | 10.70 |
|
| Sunridge | | Houston | | 1979 | | 49,359 |
| | 88 | % | | 450 |
| | 10.36 |
| | 9.81 |
|
| Sunset at Pinnacle Peak | | Phoenix | | 2000 | | 41,530 |
| | 79 | % | | 524 |
| | 15.97 |
| | 15.97 |
|
| Terravita Marketplace | | Phoenix | | 1997 | | 102,733 |
| | 97 | % | | 1,391 |
| | 13.96 |
| | 13.41 |
|
| Torrey Square | | Houston | | 1983 | | 105,766 |
| | 80 | % | | 717 |
| | 8.47 |
| | 8.19 |
|
| Town Park | | Houston | | 1978 | | 43,526 |
| | 100 | % | | 811 |
| | 18.63 |
| | 18.70 |
|
| Village Square at Dana Park | | Phoenix | | 2009 | | 310,979 |
| | 82 | % | | 5,011 |
| | 19.65 |
| | 21.37 |
|
| Webster Pointe | | Houston | | 1984 | | 26,060 |
| | 100 | % | | 276 |
| | 10.59 |
| | 10.05 |
|
| Westchase | | Houston | | 1978 | | 49,573 |
| | 93 | % | | 513 |
| | 11.13 |
| | 12.40 |
|
| Windsor Park | | San Antonio | | 1992 | | 196,458 |
| | 97 | % | | 2,039 |
| | 10.70 |
| | 10.26 |
|
| | | | | | | 2,762,335 |
| | 88 | % | | 34,530 |
| | 14.20 |
| | 14.40 |
|
| Office/Flex Communities: | | | | | | | | | | | | | | |
| Brookhill | | Houston | | 1979 | | 74,757 |
| | 88 | % | | $ | 251 |
| | $ | 3.82 |
| | $ | 3.77 |
|
| Corporate Park Northwest | | Houston | | 1981 | | 185,627 |
| | 80 | % | | 1,607 |
| | 10.82 |
| | 10.94 |
|
| Corporate Park West | | Houston | | 1999 | | 175,665 |
| | 96 | % | | 1,583 |
| | 9.39 |
| | 9.35 |
|
| Corporate Park Woodland | | Houston | | 2000 | | 99,937 |
| | 97 | % | | 979 |
| | 10.10 |
| | 9.51 |
|
Whitestone REIT and Subsidiaries Property Details As of June 30, 2014 (continued)
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| | | | | | | | | | | | | | | | | | | | | | |
Community Name | | Location | | Year Built/ Renovated | | Gross Leasable Area | | Percent Occupied | | 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) |
| Dairy Ashford | | Houston | | 1981 | | 42,902 |
| | 99 | % | | 274 |
| | 6.45 |
| | 6.22 |
|
| Holly Hall Industrial Park | | Houston | | 1980 | | 90,000 |
| | 100 | % | | 778 |
| | 8.64 |
| | 8.26 |
|
| Interstate 10 Warehouse | | Houston | | 1980 | | 151,000 |
| | 81 | % | | 587 |
| | 4.80 |
| | 4.64 |
|
| Main Park | | Houston | | 1982 | | 113,410 |
| | 100 | % | | 810 |
| | 7.14 |
| | 7.05 |
|
| Plaza Park | | Houston | | 1982 | | 105,530 |
| | 60 | % | | 635 |
| | 10.03 |
| | 9.98 |
|
| Westbelt Plaza | | Houston | | 1978 | | 65,619 |
| | 68 | % | | 434 |
| | 9.73 |
| | 9.14 |
|
| Westgate Service Center | | Houston | | 1984 | | 97,225 |
| | 87 | % | | 511 |
| | 6.04 |
| | 6.03 |
|
| | | | | | | 1,201,672 |
| | 87 | % | | 8,449 |
| | 8.08 |
| | 7.94 |
|
| Office Communities: | | | | | | | | | | | | | | |
| 9101 LBJ Freeway | | Dallas | | 1985 | | 125,874 |
| | 63 | % | | $ | 943 |
| | $ | 11.89 |
| | $ | 13.46 |
|
| Featherwood | | Houston | | 1983 | | 49,760 |
| | 90 | % | | 798 |
| | 17.82 |
| | 18.51 |
|
| Pima Norte | | Phoenix | | 2007 | | 35,110 |
| | 51 | % | | 240 |
| | 13.40 |
| | 15.92 |
|
| Royal Crest | | Houston | | 1984 | | 24,900 |
| | 75 | % | | 190 |
| | 10.17 |
| | 15.05 |
|
| Uptown Tower | | Dallas | | 1982 | | 253,981 |
| | 77 | % | | 3,033 |
| | 15.51 |
| | 17.31 |
|
| Woodlake Plaza | | Houston | | 1974 | | 106,169 |
| | 89 | % | | 1,562 |
| | 16.53 |
| | 16.47 |
|
| Zeta Building | | Houston | | 1982 | | 37,740 |
| | 90 | % | | 379 |
| | 11.16 |
| | 16.07 |
|
| | | | | | | 633,534 |
| | 76 | % | | 7,145 |
| | 14.84 |
| | 16.51 |
|
| | | | | | | | | | | | | | | |
| Total/Weighted Average- Operating Portfolio | | | | | | 4,597,541 |
| | 86 | % | | 50,124 |
| | 12.68 |
| | 12.96 |
|
| | | | | | | | | | | | | | | |
| Corporate Park Woodland II | | Houston | | 1972 | | 16,220 |
| | 87 | % | | $ | 192 |
| | $ | 13.61 |
| | $ | 14.10 |
|
| Fountain Hills Plaza | | Phoenix | | 2009 | | 111,289 |
| | 89 | % | | 1,681 |
| | 16.97 |
| | 17.21 |
|
| Market Street at DC Ranch | | Phoenix | | 2003 | | 242,459 |
| | 85 | % | | 3,381 |
| | 16.41 |
| | 17.15 |
|
Total/Weighted Average - Redevelopment, New Acquisitions (4) | | | | | | 369,968 |
| | 86 | % | | 5,254 |
| | 16.51 |
| | 17.09 |
|
| | | | | | | | | | | | | | | |
| Anthem Marketplace | | Phoenix | | N/A | | — |
| | — | % | | $ | — |
| | $ | — |
| | $ | — |
|
| Dana Park Development | | Phoenix | | N/A | | — |
| | — | % | | — |
| | — |
| | — |
|
| Fountain Hills | | Phoenix | | N/A | | — |
| | — | % | | — |
| | — |
| | — |
|
| Market Street at DC Ranch | | Phoenix | | N/A | | — |
| | — | % | | — |
| | — |
| | — |
|
| Pinnacle Phase II | | Phoenix | | N/A | | — |
| | — | % | | — |
| | — |
| | — |
|
| Shops at Starwood Phase III | | Dallas | | N/A | | — |
| | — | % | | — |
| | — |
| | — |
|
Total/Weighted Average - Property Held For Development (5) | | | | | | — |
| | — | % | | — |
| | — |
| | — |
|
| | | | | | | | | | | | | | | |
| Grand Total/Weighted Average | | | | | | 4,967,509 |
| | 86 | % | | $ | 55,378 |
| | $ | 12.96 |
| | $ | 13.27 |
|
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(1) | Calculated as the tenant's actual June 30, 2014 base rent (defined as cash base rents including abatements) multiplied by 12. Excludes vacant space as of June 30, 2014. 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 June 30, 2014 equaled approximately $208,000 for the month ended June 30, 2014. |
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(2) | Calculated as annualized base rent divided by square feet leased as of June 30, 2014. Excludes vacant space as of June 30, 2014. |
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(3) | Represents (i) the contractual base rent for leases in place as of June 30, 2014, adjusted to a straight-line basis to reflect changes in rental rates throughout the lease term and amortize free rent periods and abatements, but without regard to tenant improvement allowances and leasing commissions, divided by (ii) square footage under commenced leases as of June 30, 2014. |
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(4) | Includes (i) new acquisitions through the earlier of attainment of 90% occupancy or 18 months of ownership, and (ii) properties that are undergoing significant redevelopment or re-tenanting. |
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(5) | As of June 30, 2014, these properties are held for development and, therefore, had no gross leasable area. |
