WSR - Earnings call transcript Q1 2022

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Operator

Greetings. Welcome to Whitestone REIT's First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, that this conference is being recorded. conference Relations. your the Director David turn Investor of now over host, to Mordy, I'll

begin. may You

David Mordy

Good morning, you earnings and thank conference quarter REIT's call. XXXX first for joining Whitestone

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

David Holeman

earnings thank quarter conference you David. for and joining XXXX Thank you, first Good call. morning, Whitestone's

year; of by first operating and reductions strong our XX.X%, same balance G&A quarter and store to of pleased for are growth strengthening. We the sheet financial ongoing in expenses significant NOI announce highlighted the results

high occupancy as square markets in in consumer and increasing traffic by Sunbelt to necessity-based evidenced levels. per foot tenant growth located and demand continue drive centers increases community Our rent

growth, update components growth. per prudent focus expenses, on the capital leverage and value shareholder an like on FFO through would strategy critical our remains as I my focus debt delivering maximizing are on of organic and share improving G&A Today on provide allocation, targeted focus value. key I Our shareholder to reducing areas XXXX unlock CEO. our that These initial areas grow to shared five key call of our

several our this quarter call, communicated quarter, our First, level. In first executive G&A goal, fourth to toward million by XXXX taken the the G&A commitment through $X.X reduce reducing steps commitment to resetting levels. largely million $X In our decisive cost. cost to of XXXX from have we we compensation

XXXX. $X.X first the G&A Our first than approximately quarter quarter expense of lower is million

well So this our commitment. we on to are meet way

practices; company's declaration the committee teams the to trust Secondly, received change through level continue oversight through board of the an efforts. the We bylaws. XXXX future. the providing cancellation Meeting of of amend this This Shareholders, communicate ESG to allowing the shareholder have best bylaws, is the Annual we our to separation our governance shareholder the of appreciate of progress company's of to first will alignment the governance governance with and the commitment in subject to and of made and our area of have ratification right plan charter to nominating in at amendment our an upcoming of feedback amendment pill amendment investor Chairman shareholders in through the with or we to poison [ph] rolls the board quarter, corporate rights CEO,

shared minimize maximize to value. commitment our dilution and Third,

in $X.XX per QX $X.XX share laser-focused quarter, We per FFO increased increasing are from first from organic share per FFO XXXX. our initiatives. on In the up to

needs. we Fourth; the yearend points believe drive the the geographic growth with neighbourhood the half combination to on our first growth work XXXX mix we our to centers entrepreneurial by over work our nation's the the our XX% focus increase, ensure at line occupancy that XX% the that centers our capital year. steady strategy with recycling basis to further we high our the in past are highest have to first of visited will markets. and occupancy centers community-centered In optimizes approximately by and our is merchandise prior point Sunbelt, value our meet with occupancy our of remains to in in yearend. markets demand We To quarter the and which that from of continuing to to are are of a goal leveraging seeing XX%, I up in we XXX continue stayed drive with tenants quarter, potential. month

straightforward execute we to strategy is fifth, approach to Our occupancy. we revenue to committed and enhance and up drive our that remain on disciplined continue and And strategy growth. will

growth's but grow disciplined We for guided our growth capital sake, will not will stewardship. be by

we do sheet redeploy modify and properties should proceeds We and development properties our if determine or acquisitions, continue specific the to evaluate balance improvement. to

key are continued and have to a that will our key and/or we less upon anticipate growth have and strengthen sale. leadership team promotions strengthen to for of success. are with the perspective, to point; that development properties we Our that we recent thrilled with advancement have balance are core our with our been our our criteria individuals lower potential From strategy, monetization, metrics aligned sheet

rent build we achieving XXXX quarter guidance. toward to upon last first strong The from tracking continue year's takeaways record-leasing are activity are results our our and We growth. primary solidly that strong base

drive our over call With We to will the year, I share per expect turn now Christine. close to strategy. to growth this hold that, FFO best-in-class as core we

Christine Mastandrea

Dave. Thanks,

to months. XX or year. first of leveraging in occupancy were Aggregate Accordingly, XX.X% increased tenants from Our the produce positive results. mentioned, continues Dave XX.X% a the XX.X% spreads points strong we and quarter terms as our and in positive over prior leasing XX% outperform the basis tenant to from to team a relationships XXX last

X.X% and quarter first increased grown months. and quarter XX have leasing months. first the X.X% in over in spreads the XX trailing have the XX.X% increased trailing XX% spreads leasing the New over increased Renewal

size disciplined result Rather businesses a partner on with time ABR and prefer business result needs higher foot convenience job our retail. investing by needs per this along have with right year needs the the which By cost is ABR community center's square activity be focusing of on approximately providing growth tenant the proving meet begins environ standardization, lower position demand community. to of increased our meeting meet communities. in than the than is conversion meeting smaller the we Amazon heavy neighborhoods to in ensure meets localization XXXX flexibility the challenging This spaces, big crunch is box our compatible leasing X% foot, business This of to meet ever, consumer, and size the our new markets range Our of a knowing feet. growth retail we the service. from per greater and At business by the spaces typical ago. of our of space to a mix a space with needs. engage $XX and to is square research we of each in By is smaller effect. users, a than driven square space our of with a More our the needs in population with fueled model, we focus serve. with different being further We

of and our XX% primary square details focus to provide lease neighborhoods; on Let of me grocery tenant our curated our restaurants and that food, mix. well-diversified tenant the and now footage groups a provide convenience few surrounding We of XX% largely four representing ABR.

increasing We've operators seen our have as XX% second self-care of in people Our and of most footage and restaurants a and to nearby restaurants for and with notably, also been the up more balance. growing lease convenient were more people generation have prioritize community in XX% the preventative reduction conjunction quick increased work from to the life a convenience more Self-care, pizza up represents this locations health movement. fitness is of meet wellness restaurants. out category pad home activity and fastest international service and We've to take from mind. restaurants is an comfort lease Boutique also seen with in is as includes demand which ABR. services work our food, Healthcare fitness care during the in shifting time following specialized designed to square and chef-inspired COVID. the uptick

footage we're seeing of ABR. with as ownership Finally, and pet our and veterinary our of Financial entertainment COVID. or square footage there's X% and shipping services X% care logistics in increase of more representing of ABR education and X% lease been our pet our and representing square lease X% services and an

a producing properties our high Our XX.X% Sunbelt very combined well in the locations growth. allowed focus-tenant first approach in the quarter, growth with to perform NOI outstanding markets,

lives with like forward, Scott. would by the continue of convenience build we continue and grow the to durable This over to to provides turn term that, will and to continue growth connection, will economic the of others striving I and build our by tenants. to and the work opportunity meet advantage Going to members commerce, work for value. team community shareholder our needs With call to long improving

Scott Hogan

Thank you, Christine.

onetime growth G&A I The XX.X% per our million operations was on from basis growth benefited mentioned. our for to XX% to was same reduced year. forfeitures to detail ratio restricted The of the gross benefit, stock compensation to estate occupancy quarter diluted to benefit forma revenue $X.XX share and also the a funds the contained XX%, contribute from a compared for period income expense. sheet. versus onetime XXXX. real a from to revenue from of compensation per ago. previously NAREIT in expenses same Total to was $X debt-to-EBITDA, This quarter point terminations grew Net re-ratio for quarter and forfeitures cost Earnings an in adjusting included net per were in guidance. of improving of were in in from Exclusive for million reduction XX.X% debt $X.XX we a the reduced balance strengthening Total shares versus FFO continues year a our quarter. quarter. the onetime X.X% in more improvement versus this the represents first outstanding XXXX onetime $XX.XX quarter book for anticipated $X.X pro bit XXX share ABR growth same-store was as $X.XX the This the prior XX% the was in $X.X $XX.X a million, share. provide quarter After by the in improvement annualized benefit, $X.XX debt compensation ago. our a X.X% year to million $XXX.X and up growth million includes share result is employee $X.XX benefit me Let from XXXX. store the $XX.XX. stock of due XXXX per onetime

we and We progress pleased strengthening we our steadfast in area. remain with our are balance the this significant sheet made have in on commitment

quarter, share XXXX. share our in approved The previously key per guidance expected range board FFO a quarterly from first $X.XX would increase XX%, OP second are, dividend growth cents XX% of reaffirm $X.XX, a to $X.XX XX% dividend guidance NOI to representing is like Our of up, assumptions has XXXX unit for common same-store included per representing fully the XXXX diluted per from share, XX% $X.XX amount our to wrap annualized in please to a and an times and occupancy X%, to an million cost, expect of XXXX, from stock increase lines. forfeitures We investors a to guidance. versus these X% To of forward issued between of I cost X.X and in to XXXX. quarter. that, with XX.X% of non-recurring debt XXXX And our look $X.X will of for reduction debt-to-EBITDA year, and revenue, million course we annual $X.X updating the over million the we now our approximately questions. RE be million progressed and $X Operator, take towards X.X% $X bad to as X.X we G&A to including lower severance G&A times, a have the of targets. and than ratio open the

Operator

Kucera Craig At first be instructions] session. Please Our question-and-answer conducting a Securities. question we'll B. question. comes proceed Riley this with your with from time, [Operator

Craig Kucera

Scott good for start I'll morning guys. first question Yeah. Hey, you. a

there more those You quarter, were Were timing any recover reimbursements. or recoveries of lines? expenses able this operating anything quarter of onetime to in a adjustments changes and maybe your taxes lot along this through

Scott Hogan

bit adjustments little onetime I other just see maybe to recoveries. and that, than a had we strong think $XXX,XXX $XXX,XXX We of

well. as a has occupancy last up Our gone bit year from

Craig Kucera

Got it.

you those So I or expect a able expect to north back levels XX%. of think Typically to this guys the sort year, do quarter, this low it to robust have to XX%. get closer are to that to of back was maybe recovery? continue Would you normalize more mid we to

Scott Hogan

the it balance the mid-to-high in for to eighties the of I be year. expect

Craig Kucera

maturing the what are $XXX fourth you swapped. term Okay, currently with quarter here loan the have that's your maturity? about you million great. dealing expectations And that talk Can in with

David Holeman

right We're have in second up lending quarter, our with towards more sometime quarter, to updates the later facility beginning wrap end now, in discussions and expect updates credit the groups and of we'll the our the maybe we specific and of the year. -- recast third

Craig Kucera

Got it.

the maybe in Just about given you be be sort swapping rates to until where and a there's more where were would in little prior future? are better you the -- on today change swap execution likely be that bit last from or of leave rates would year that potentially floating thinking we based that years

Scott Hogan

right all at looking We're now. options

it evaluating today we're to One and swap of options options. the all is

David Holeman

I Dave we're just four back XX-year treasury, did add it's might when years the volatility facility. while a on ago if were there's to where last look been I think recast Craig, the Holeman. you we of at Hey we lot close the

movement, the recasted we time our level is facility. lot was to where but it So pretty last rate close of

Craig Kucera

Okay, appreciate the color.

are the more any for second G&A the the in departure; year? a to all G&A, -- see those me more we adjustments this Would to quarter? related complete couple for expect Just much quarter the adjustments on the pretty with Jim's

David Holeman

level around were So lower overall and a $X.X of million and cash onetime forfeitures we adjustments well. to $XXX,XXX about have little compensation a compensation lower had stock on as going of forward quarter that maybe stock we'll related

Craig Kucera

Got it.

sort adjustments rate G&A expect XXXX million of of we year ramp when and expect guiding that $XX we a forward this about would because up I of going kind overall know to level think kind back kind onetime run So, lower mid $XX forward? to going of the you're of would going of to the to see sort we or million

David Holeman

going of So a we're around repeat maybe we realizing forward somewhere are million that expecting lower won't year overall at this that at savings $X year, G&A next level. the

Scott Hogan

in -- to we $X it year one reductions, get I in million we million G&A think would $X said to and have think our about us to -- million of some, this I guidance, timers $X.X kind $X.X in million. be to

not So comments Scott's year a of next year. of $X -- to the this recur about will million what's in

most -- decrease is So recurring. most of the the of

Craig Kucera

guys. That's great. All right. Thanks. color Appreciate the

Operator

with Maxim Please question next your Our proceed is from with Michael Diana Group. question.

Michael Diana

Thank Okay. you.

reductions XXXX, I this more XXXX, growth, that a focusing know Is of organic opposed take you're focusing plans redevelop. or item? year in you for number to that on which centers. properties I you any I or develop mean So on have XXXX to leasing as know could of a and acquisitions your of expense that is

David Holeman

let I'll detail. Michael. Christine give intro then Thanks, quick I'll a give and more

about You're the to there projects is portfolio value few a in comments in extract embedded extract right. several good the a let projects, the portfolio, to Christine We do maybe opportunity got that have We've ability our through and over coming our -- years. obviously I'll development. I'll give value but

Scott Hogan

me, Michael working pad we're portfolio. excuse our developing Currently, with

a type QSR much Starbucks, been, So has through. this Dunking of any drive your of Donuts that's

that's been a but and yes, quite of little higher opportunity So is particular, forward, also redevelopments bit our moving a focus a cost, of impact. in there then our a is in lower which bit

then are that but And at developments, in probably be we're of the look ramping looking will the XXXX, larger some what to cost on up. in of place those So going addition, depending take we like. most

Michael Diana

Thanks. Okay.

Operator

for call will over I now David turn instructions] Holeman remarks. closing And through the [Operator

David Holeman

the call you morning. Thank on for this us joining

to on I And progress you David will our would our call. Mordy, good and interact visit any move day properties. if year. we with a of management like the conclude that, updating to the are out We you reach all pleased look through start you and and/or team you. the Thank to further wish I with you year to as of our our forward to with invite strong very

Operator

concludes disconnect for This your time. your may Thank this lines conference, you you and at participation. today's

Whitestone REIT (WSR) 4 May 222022 Q1 Earnings call transcript