WSR - Earnings call transcript Q2 2020

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Operator

Good day, and welcome to the Whitestone REIT's Second Quarter 2020 Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Kevin Reed, Director of Investor Relations. Please go ahead, sir.

Kevin Reed

Thank you, Eduardo. you Call. Whitestone thank XXXX Second and Conference Earnings morning, for REIT's joining Quarter Good

and on other call our me during company's be Executive Please those Joining deemed a today's that including this recent Officer; number uncertainties a and release and our note Actual to historical and earnings Chief call Chairman SEC, forward-looking are to forward-looking be Dave also the of period Whitestone's time, detailed today's and and Investor statements XXXX. to due factors. statements. with Holeman, statements from refer some Chief Whitestone's materially not Officer. are Financial Form made information differ as are Jim may Mastandrea, data Form our Please may company the filed of section. these XX-Q factors. date, to SEC package the Acknowledging discussion update financial important undertakes filings www.whitestonereit.com, in press that only XX-K with website, risks, the most and for X, the call may for it have and earnings may no of second webcast press available fact and includes is of operating information. Relations obligation that August call that this been supplemental note accurate release time-sensitive be the quarter a results The on this

let which the and reconciliations investors to supplemental Jim we and pass the During this non-GAAP performance are press Including allow metrics company. financial With financial reference package measures. the presentation, the to earnings believe financial data may better non-GAAP that, GAAP measures of me understand we to call Mastandrea. certain the of position release

James Mastandrea

performance on like detail our provide COVID share Whitestone's you more a all financial and Kevin, our as business, to detailed operating would call I CFO, investor and us our you, today. update. will even Dave what to greater believe well Thank pivotal Today, as I second are joining and for quarter thank Holeman,

that Given been doing you, world. that past all your families country we've everyone affected the well hope challenging the X safe. months are incredibly COVID-XX and and the staying and across The pandemic, all of we been have for by businesses

the reacted economy with off safeguards March of XXXX, the place. As cliff had in U.S. in fell quickly we we

At the call terms of In within time and located it of we states we in community-centered Texas too back less were with centre's parts other of our as April were operating tenants our have XX%. somewhat earnings and and and the Arizona, markets May, XX% are. challenges, the more of we extraordinary of our to business-friendly relates open, the specifically, faced I in country, shopping believe than were as in characteristics early although collections stages our pandemic

report am that so our during I As businesses quarter of our July we today, for the are XX% say pleased open, XX% and and of rents to collected I XX% have far. second collected

good times lessons which XXXX in from prior economic toughest and business exceptionally performs minimizes of risk the times. Our downturn, financial we and these recession the learned been in model, has crafted well during

in pillars. Our this is the continues, foundation built trend Whitestone's business IPO difficult operations exceptional since rates headwinds. our relatively X compounded strong quarter have performance our in XXXX, with second produced growth and on very and key face in of the

real acquire and operate estate Whitestone's effectively how [indiscernible] philosophy, we manage lease and including the how right then First we and it.

first taking that for XX together and with years to an capitalize our that on and our results shareholders and they and producing second entrepreneurial shareholders extends participate our others culture our shoulder-to-shoulder create. ability opportunities employees beyond capture consistently The which worked may And third, help team pandemic our our that to only towards miss. My provides in The experienced on value investors, preferred amplify Even become toll. hit demonstrating online is management all-time trend. served autonomy this channel to is shopping as retail strategy. before point rapid high. was that stayed closures Overall, transactions act the the huge with philosophy Whitestone distribution shift and quickly the to a us pandemic, decisively. Store point and with

strategy, in structure and which decade Our [indiscernible] to business in the structural with an was is economic tough of of cycle industry down e-commerce. recession times significant created ago, change a formulated great our withstand

we other succeed, that we stream a Investing welcome not could and provide states open several owners These replace population tax if no and if past our a expand air locations. incentives can with Keep These mind in our lease be into have buying states business in tenant more to innovating, to affords committed large years. implemented with contrarian performs growing their the revenue manage and base they over approach Our This to our freedom properties do and these to quickly builders. make strategically. growth can that small they as the go business well, decisions X% us and Texas nation and flexibility more tenant the allow properties reduce led states viral. the hesitation. communities. regulations of them and tenant than in impact Arizona. focuses and to [indiscernible] owners growing properties [indiscernible]. formations on them contributing in We can And and have in we estate real If fill business control

acquired services needs all. easily at diversified provide tenants that be of Our for can't essential that online, if mix

extension neighborhood As open that of as center the the lifestyle. our experiences resident's community a result, is air providing cater an to adjacent

We tenants ways engaging help their for proactive and with to to continue businesses. looking a our always approach are to take

running their with of to in decisions fully committed of business. tenant daily not the teams, the local real have longtime have estate entrepreneurs. differentiates is tend knowledge, with us with tenants, relationships arm Our This what making market relationships our deep developed the level who national many peers to tough from person

expand customers digital while signing, the distancing. a implemented outdoor property We business, strategic and on-site to initiatives help with spaces worked social safe, tenants to to their have restaurant takeout, meal measures of more our maintaining generate revenue, and have numerous at safe many feel their delivery including increase level,

our believe to return our businesses full for continue sources we initiatives them. will additional produce As tenant capacity, to revenue

strong and our a to produced Our profitability resulting our at sustained added in our makes properties, Whitestone, because is second philosophy strong is for value My of point has industry-leading We works. people. the returns core it culture a business. believe culture

not entire about members shareholders We the situation, they offices, to safety are that in through loans, safe want office. us to feeling they deferrals, for to Yet our access are team team, been for to cases working, our We implemented value it shareholders. in tirelessly, in are best and committed of the and mile. PPP necessarily of we remote returning measures excited have now and these working these of dedicated to the giving time the seen tenants make Working rent to pandemic, and effective our anxiously open/closed reporting make tough us tenants rent. temporary not the a helped pay agreeing some with recover. tough succeed in interest also associates an not of each conducted worked extra our creating and we've workforce with Our properties themselves offices. and of expansive providing signs, of decisions months pressure go willing After in They have of who associates integrity two manage give collaboratively to the all any Whitestone continuing base approximately fairness, and back all taking the to times. with and willing tenants. this From our in X,XXX few our advantage beginning tenants

theirs, the expect rent commitments We to we expect which paying means and [indiscernible]. our tenants to honor our honor

full out though we capitalized. pay are of approach prefer they even and tenants. repeated working times, these continue way operating locked quarter, more tenants in a states. situations, [indiscernible]. well by In tenants the who of with approach a amount these collaborative our few always They the this we rent tough We love several assume most the of During the

breadth is in only it's we Our industry, we experience like we of depth third that would both which do not I own the leads but own. leadership has point. what to say to what me with it team and my what the

in that know within business We formula global this believe of that that and evolves we with experience we we the continue produces and could industry, structural We markets, by result happen have markets, and disciplined, produce. experience on our culture we our results. capitalize team, the opportunities. properties real estate and investment consumer identify the and we and our will be that we know identifies in properties, our underlies succeed. skills tenants should benefit brand we Whitestone. shareholders a start, consumer. hard to mastering believe know In work in have the in we will industry owning all recognized we of and quality our a by operating estate those before know [indiscernible] our closing, the our real staying they shares As We leading preferences the industry our results and shifts and owning the brand work as lifestyle call the From for understood philosophy,

X% and have predictable X% and we to leasing value appreciation confidence cash that stable, gain delivering by know flow, also increased continued management producing asset value to meaningful We their through scale both and like annually. Dave? Holeman, sustainable when Chief through And and Officer. long-term Financial the value. to achieve our With over development, turn I'd to call appropriate, to Dave that, acquisitions that

David Holeman

Jim. Thanks,

who very I difficult like to possible First, thank results to produce times. of to opportunity this take best our the associates given all would continue

headwinds dedicated local We highly communities every and to current connections have strongly thrive, the to we that withstand that positioned thrive works are a we into and feel and create team future. day the that

good, quarter, amount occupancy caused Given has held or our well. remarkably the pandemic, rate space orders held economic relatively a pressures businesses tenant our rent the up Also, impacted only the closed we occupancy during severely annualized closed all at at by flat at such Despite $XX.XX. ending a having held overall portfolio the of part tenants of square had that severe quarter Entering XX.X%. portfolio our our XX.X%. or for stay-at-home handful for significant the the foot up per the well, stood of quarter,

XX.X% and activity foot quarter. pleased second square XX% leasing from X.X% of and signed on spreads new positive quarter leasing of our we the down in XXXX, renewals were While leases with the was

This for and triple mentioned, monthly. XX% of rent quarter, Jim the base billed charges collected our we As rents. net includes

deferral quarter agreements also rent have of into our second We for entered X% rents.

loosening entry As development Today, of open. of part such co-tenancy or stronger XX% suspension tenant our are as payment into further sales, exclusives guarantees. we agreement, deferral requirements, and online items have businesses of negotiated restrictions, of beneficial of portal, the reporting allowing our

XX% collected the have As our which of result, we QX at of a collections To have XX% and shown improvement. to April to last favorably July this July time collections reported rents date, compares quarter. we

the how pandemic compared Funds a While or the $X.XX things $XX.X in our share, during the per same on in resulted $X.XX due are $X.X for impact $X.X financial which receivables. quarter toll $X.XX to is for operations share, by straight-line $X.XX the per was business the per took share, which or a or our we terms of the of quarter or year. progressing, encouraged rent results. in revenue, of The second are share, million, $XXX,XXX, the quarter million, from decrease to collectibility million, primarily charge related to of of prior per noncash the includes pandemic,

flexibility me a color related to Let our on add the little analysis pandemic.

we debt straight-line amounts. reserve rents the excludes million, and recorded for bad which reserves unbilled quarter, $X.X of For a

Our for collections XX%. were cash the quarter

agreed deferrals, rents, of remaining X% the includes reserved XX% of with we XX%. rent So unselected which

GLA XX% basis approximately representing our converted of to tenants tenants, revenue, of cash XX their rent Additionally, Those in of have paid and own X% our we X.X% accounting. QX.

be some details of found collections provided our additional XX Page have the on supplemental. can that We on

or cash, the count. balance implemented an we $XX XX. further March, million reductions since to including Since million cash, in sheet. measures increase $X XX% Today, representing to we in Turning various March have approximately head conserve have

operating facility. expect we trailing Currently, mortgage we third We million for no in $X.X maturing which under of credit XXXX. of net $X have availability Borrowing under quarter, million one the credit debt borrowing largely million XX-month the maturities by properties. unencumbered availability driven in refinance facility in $XXX.X have capacity to and is income our loan XXXX, and

exceed period, third quarter measure our NOI second the as same borrowing we which quarter, September the will project that for borrowing the is is at that Assuming available the XX, current our XXXX. next

in work our expect continue compliance We to debt with covenants remain our and closely group. bank with to

returning and to well our and lots in is quickly pent-up as leaving their are restaurants pent-up ways are markets and are capture stores out this intends seen positioned have creative active, do so. business. and demand consumers to filling, figuring We to in homes Whitestone force. do demand Parking and

shareholders deliver It forward update Whitestone take questions. in is strategic communication, efficiently and We open processes and desirable has as Operator, team And future that greater we plan. with a through scale worked significant of growth crisis, more ongoing actionable ideas, better this collaboration, together of an perform through population providing us to the its progress. more effective on please exchange markets we states. our high benefits will will and the and to continuing robust Our improved that, more many and new data growth our most provide to systems and infrastructure. and allow now is look reap lines. highly

Operator

Instructions]. [Operator

take our first now Aaron from JMP question Hecht at Securities. We will

Aaron Hecht

a lots consumer made you about filling expanding. comment parking back up, Dave, demand

Just guys profile operating that more. are metrics bit that community supports about that at have wondering that, in could you the And think majority -- the the today seeing of businesses traffic that Do on terms centers? they're that talk the rent any that traffic you do little of paying? a your you you're if year-over-year is

David Holeman

as Aaron. our centers and see our have the beginning We monitor may well and Thanks, continue pandemic at as comment I'll significant as of the comment Yes. and to Jim increases. tenants, Great increases, well. question. traffic since obviously, the seen do we

the restrictive and have in to continued shutdown some a been also, businesses. operate you We operate orders as that less of on know, little states probably

So are monitoring traffic. the we

safe think down We still in are trends a have people that the year go I from seeing life you our I think good in anxious traffic. Obviously, ago, and markets very it's increased many along get with but are out are a like to and manner. markets,

James Mastandrea

activity in by And in to interested we this you someone [indiscernible] leasing space. for here. managers is of management Thank our still Jim property Aaron, the team be question. have [indiscernible]. leasing or people

our some personally a visited the lease it's X property XXX in of of seeing of a visit is corporate year degrees. I year. of significant are the properties because in in like the each -- Some of and interesting and by our pickup key some traffic time weekly management. out the to try What it's we're an is times Phoenix, tenants

we and the visiting tenants who it's are the visiting and still So relatively see hot, properties floor tenants.

picking is it when smell can You up.

to the of that's find up. picking and just see obvious traffic sometimes parking the hard You the It's space happening. signs

as to far it. As the data continue representing track that, we

for a we puts I of of think that have. billings second the that to in quarter, keep at having that tenant we're heap XX% And of collectibility. huge really in us base that's our terms mind collecting top relative the the

they year-end that So this settled to think out. them to them. know we looking closely. work the We the from the distancing with get respond hurt being most and things forward tenants of feedback the they're social we them. is and we that very We hear And is

Aaron Hecht

others. And approaching market you their Can for on the this -- retailers that? represent our requests looking year-over-year about if space? or kind you better and that? than changed out the the side in demand comment there? that declines some from have you footprint groups seeing for environment price Would the Are you there to of retailer retailers expand and obviously, guys locally certain Right. -- during performed Are

David Holeman

Yes.

I think a of comments. couple

breakout that is than see certain tenant mix, it's of crafted. others are are which you'll supplemental look obvious to we We Page see think better XX, fairly well -- as data, our our groups at there are us performing our

a performing groups are there little that So better. are

times uses. of like we're from back. are and we entertainment getting venues, little softer demand new of seeing having and a and -- kind But creative seeing Some slower are them,

spaces I of centers. think one traditional we've the open some of mall the things for tenants is seen looking air are in

smaller So focused markets know was really crafted that's those well, the very about some looking model folks. very and we're -- good something know business out the our we with feel reaching tenants. then And of spaces, geographically,

comfortable some quickly do to very fallout. we're have if in So our re-lease ability we

the think for tough grow we revenues one help demand. And we times. doing, is to the And of things their as tenants mentioned, these we're looking so ways seeing obviously, are I in

into that parking has with gone our are a tenants of working with expanding long showing being lots, those so creative we way of And doing kind things, tenants them.

James Mastandrea

have, starting -- and in that's on [indiscernible] and individuals up momentum it our environment, they're We're to some having that well. Yes. seeing that interest they And centers branch in eventually What are the is our alone safe interest that, cigar some that. we're seems basically enclosed they we're spacing our people They're we seeing seeing are I'll in that. of crowded continuing a them require, add conference that where fairly to increase lounges have lot with forward to like small high-income but seeing called centers, We're in those Aaron. then seeing X the starting we feel they safe interest office a to neighborhood. like seeing [indiscernible]. We're in because well more spaces is take we're in the as it with We're interest easy which in call, locations in an it We're an which working today. CUBEXEC. seeing in to and

be -- is we're being kind their e-mail. and was social have, Some they role of get can now it order just one and the talking of of of And their pick walk-in I our today. one employees business to said picking service up. XX% police, I some up. employees taking takeout the the The interesting. to coffee is of which seeing of shops we the of seems

open good. only seeing feel adjust all properties, nicely. air, up. And So very people with quite seeing And we're open they're what's in And interesting we're our people still and pick Arizona. -- Texas We're air. this we're

So that. there is

We much those by in benefit just have states. being X

Aaron Hecht

job collection. [indiscernible] good the Right. on

Operator

to I'll for [Operator seems any to go additional or further closing Please, turn back questions. ahead. Mastandrea Instructions]. There it James be no remarks.

James Mastandrea

we it covered to lot that adequately the we get like like we've hear. questions. Well, when says of events don't people would It a

we and their I what I've things. difficult of how my extraordinary think recognize few we are begin a about been remarks in one pleased to able relatively the I we I'd say and just perform in we've closing, are to that and understand well. We a be industry in in One Whitestone. very is things mentioned investment solidify to do to and think with like that to brand, these trying Whitestone rapidly. its very and evolve they'll think as it, continue do I we times, investors really evolve yet

near is we to there believe ahead. do to better we the relatively are and pass come While we difficult will times do term see predict, it believe

Our is strong. platform

and model resolute business proven, preservation. we Our value on our is capital of remain and focus

crisis the Our on to is interesting some committed I team navigating marketplace. starting opportunities to will that add this and being positioned which and in really passionate we're execute successfully see future opportunities to

moving we've shoulders value. long-term the really focused as we shareholders stay ago as work on preserving so our change XX to company we forward standards we -- implying stay true it why with for We same that it's been do to and and and it since that on to -- ahead we creating though serving strategic want to unwavered our values. our remain look working, put true pandemic. So you it's to plan together [indiscernible] this with years and because our the we've this and and intend to working if our

you. please to would And me Dave do company the Thank or by you. with with So hesitate don't like our saying for thank visit leave to properties, I'd everyone or just anyone so. call if or now, that,

Operator

today's your Thank concludes This for you participation. call.

disconnect. now may You

Whitestone REIT (WSR) 6 Aug 202020 Q2 Earnings call transcript