WSR - Earnings call 4 2023 | Whitestone REIT

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Operator

Greetings, and welcome to the Whitestone REIT Fourth Quarter 2023 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. David Mordy, Director of Investor Relations for Whitestone REIT. Thank you.

begin. may You

David Mordy

of highlight our are yesterday over filed be published turn to information. Whitestone's quarter and Investor update Chief Officer. accurate on the XXXX. our as March and data supplemental and webcast earnings is thank SEC Please are XXXX and Dave Executive this The no joining REIT's operating deemed made Operating Whitestone Relations Chief note a statements. Financial Good our it and some call forward-looking historical that Conference to you company and Call. Quarter statements topics Officer; fourth today. Chief Mastandrea, Earnings Officer; this are on discussed I Hogan, have that On financial been Fourth Chief Executive Officer. Please call morning will during slides in note Christine package section. website uncertainties which date, for to Scott not today's Holeman, be call Whitestone's earnings be refer may the statements with may also We only may includes this afternoon, the due those to of and the that differ be to other XX-K of for number time-sensitive that the undertakes SEC, Form these available results fourth news release factors. Actual earnings fact discussion X, and forward-looking call quarter XXXX the this risks, to website with now company's a release period most materially Dave a filings detailed call for time, factors. Acknowledging Holeman, XX-Q news from of today's information and important may recent obligation including

David Holeman

good comments X our and everyone. David, my conference earnings quarter fourth call. you, parts. into I'll break to XXXX Welcome Thank morning,

into our it. environment. finally, very what we've straight value; to I'll the well with current ongoing [ how done; initiatives second, ] continue strategy get core and that drive First, sinks

terms of management this X began team January our what In run. of we're in so into XXXX, we've done, years

XXX bringing XXXX. list the the numbers. the our grown XXXX. of joint Core high-level our is basis small-space in this investment rapidly bringing in and costs, access points his X.Xx venture. in our metric with important until We've of impacting points we as Chair shareholders by grown With up Trustees. of our X-person refreshment worked and income metrics, a our anticipate This our and has exit new trajectory a XXXX. a net by in providing later been earnings points strengthened year-end accomplishments. members expense This the third for EBITDAre Christine We interest of conclude successfully X.X% has for hard XXXX, our in XXXX Scott detail call. We've projections record XXXX, quarter operating detail. We've debt to of despite down occupancy X.X% $X.XX focused will on quarter to us. and ahead I'll X primarily the in rightsizing XX.X% XXXX in We higher portfolio, improved place per basis former renewed despite occupancy at at to role in provide CEO compensation, FFO in basis our or high-quality higher accompanied actions, and bylaws. we of to disciplined litigation share our related-party shareholder-friendly half Board larger-space growth Scott XX.X%. fourth that occupancy XX.X%, same-store to facility our of leasing credit cover by resulting This followed executive splitting extended Board, of in our on of from has more this $X.XX year-end fourth quarter CEO significant Here's is XXXX. from the greater to with our have and our prioritized for by Board X.Xx further, XX.X% had to XXXX. Breaking balance our down from and our litigation efforts sheet host to XXXX tenants, we've grown XXX including of XXX on

headcount We how about are of brought more over initiative, sheet quality capital is provide that has nearing plan. other conclusion. sheet and the initiatives the We've balance simultaneously continuing our finally, reduced credit this drive a to the our very value on noise strategy talented clear to individuals, our years, of have continues removed. And creating be investment-grade an as culture. Whitestone excited with creation at improvement equally our X to path color very heart had only on and X. Christine which value, proud our initiatives, years, improving recycling the improved better progress while achieving highlighted, the G&A and employee revenue few quality last plan are accomplishments short, team bit over of value. Three of I'll results. I'm have I'm rating. their of of cover I list revenue of we're satisfaction. plan we're super a and our balance X In long and I'll last a obtaining significant improvement We've the clear

the and the to efforts. people, and work tailwinds do the We our plan market have here right have supporting more right

EBITDAre, monetize apply metrics debt, will opportunities within reduce grow development we investment flow Pillarstone free the as our to the cash portfolio. debt and to parcel land Our site pad and continue improve activate

further below debt-to-EBITDAre anticipate We year-end improvements we XXXX. by XXXX, in and Xx expect

and lower effort ABR had significantly that about market. We anticipate characteristics sales rate same with believe last Our we program over at completed announced, has quarter our acquisitions the higher drivers at say, demand cap X.X%. redeploying yet properties and we today's upgrade pace October in allowed will upcoming, since XXXX, into proceeds upside, the of end the key keep ABR aggregate by of quality of more sale but X we've have us and not $XX the higher asset have recycling the the asset I capture years. the anticipate of to the that and approximately we in with selling an million of overall portfolio, we'll second upside because a going

I cooperating via the think capable results organic we that on not market we're in or market reliant note equity here to order to transaction growth, so are very it's earnings of important the driving drive growth.

of strategy. The However, current opportunities we the is environment. those starting what supply driving adjust higher is today valuations slightly align Whitestone's team limited across good of rate Whitestone. I retail Frankly, limited country-leading of retail powerful right group. the supply, final type cover in our The our population great and we're ownership with see of and the environment and advantage for this REITs with is growth as for markets, centers to this area in especially of are take to terms is job seeing centers would to results environment, like current the makes most of ready peer to that our a the interest retail dynamic combined

to our decisions strategy advantage number very made and well we've environment outcomes. this producing matched assets Our of take and great strategic that are a are of

to the leases a and to CapEx mark-to-market rent as roster strategic we other with Specifically, compared peers. diversified their owners more rents fast-growing operate high-quality in bumps, are annual to team capture to with be fundamental limited This decision tenant populate and we better our quicker, tenants needs have positioned we shorter active what leases in the of centers do. Because to success. to confidence with have share is ability shorter we

value only tailwind, We in acting not our and of country are as XXX% focused but markets strong underlying are in Belt Sun our a our Migration results, of trends in states. business-friendly operating lead the centers. the for terms

as we made meet have businesses in small most square X,XXX and the $X.XX. Lastly, intentionally XXXX the demand, seeking others out businesses $X.XX strong of and spaces this trend much spaces the centers to this to guidance our adjust communities. peers. percentage properly needs share centers X,XXX from larger and surrounding introduced believe meet a range. of to We core FFO yesterday of of demand continue see to foot to modifications continue We've than acquired our per We will

through unknowns I'd everyone in the we few like, I've the We more we've business our let the I'll to I'll me again, Christine. team variables. and more near-term everything the strategy have call bullish and proud walk say accomplished, of been here a very have and Once I'm assumed and XXXX but about now over place. projections than fundamentals our turn driving Scott never have the

Christine C. Mastandrea

a the finish. Occupancy first are revenue you, real quarter up last because deals it This XXXX. remerchandising for did quarter, of large for of the a fourth had quarter we number quality. dip Thank closed to first We've as quarter upcoming in we Dave. for a XX intentionally record and the in quarter rose year's Occupancy the points bit operations. basis XX.X%, may strong from in is

spaces have first deals, year-end to we're a quarter However, in XX.X% pipeline XX.X% our the XX.X% strong renewals. with XX.X% square see quarter may of XX.X% while higher and leasing ABR XX.X%. XX.X% small we came new coming in XX,XXX we an XXXX. Occupancy on for a of at foot for plus spaces on with at spreads were and occupancy Straight-line dip, by leases forecasting

as leasing our straight-line the keeps numbers. XX dig strong are, you XX.X%. Frankly, getting spreads better months, if last as leasing the For spreads were combined into it

jumps leases Not are environments Just our boom, just a of & more largest all recency and capture seen. consumer XXXX and It spreads number jumping retail averaging and strongest our X spreadsheet. agents years, because of the Phoenix we this we've the the XX.X% well leasing for Millichap make trends in XXXX. our to XXXX, in leasing trends, between the This are shorter-term only our isn't centers rents Phoenix, market, XXXX. Migration neighborhood matches asking showed ground. ever recently, those XXXX on in and of bodes of manufacturing one quickly combining a a shortage what Marcus seeing did jump but

the recently about of allows to vacancy Some of a align surrounding and that touch. younger demographic of been than out a have peers new them to the often center vacancy our rather get better center a value letting demographic, talking

our occupancy, improving to see lowering as as drive our value We can time long-term turnover. We for unintentional gardening and and with in quality XX% often greater our because traffic sure ability centers a our swapping at believe higher make with intended fact growth. upgrading to key of further strongly over what have that leads the shareholder just vacancy is long-term fast-growing we do high-quality However, is rates revenue tenants to that Oftentimes, are to the and center hit traffic creates the you you that and at centers us tenants from necessary intentional good This collection businesses initiative. pruning a during and business of occupancy. potential we is XX% or drive growth compare we're primed the limited. we our record

we Given length, of lease We're our that benefit By we've confident from things NOI halfway the spaces, this management will from great investors on tenants. intensely have going these through for initiative our number growth. Despite to robust as will think set stepped the a success efforts up I'd is had large of in when we average positive team same-store a reviewed in like in. smaller spaces, this our too. majority long-term larger XXXX, the

a Our into pickleball transformed former Bed Bath entertainment & Beyond and venue. space being is high-demand

a new operator, long-term first-mover at so recently Dallas. extremely and Joe's at to Picklr advantage they've in a enjoyed demographic. and after locations a Our Picklr they've adept them tenant with Trader shown be is opened contract strong going themselves In strong anchored the Eldorado, has far center younger signed our we've

Our taking at anticipated date. is the Trace EOS commencement build-out back longer than pushing Williams

grocer NOI While but everybody some to that's is have our a higher our traffic impacted I the space. want challenged triples of higher to in businesses that growth out revenue to those the right great costs This this capital cycling underperforming XX,XXX strong in in moving and cost. anticipated of current to the will center now remind an replacement for adjusted square capital businesses it drive of are feet XXXX, are XXXX, are come. Many environment. same-store on impact the The years change by

as portfolio capital limited businesses, bulk However, communities are and of our low that been serving of a has the low inventory businesses margin of the this we the have. number in tenants

one to add regarding our I'd Dave's capital initiative. comment recycling

a sticking showing take that believe Woodlake hard headquarters X fit is quarter. that of X our owning are the strategic At With services fit nearby the the our our in geographic strongly exited doesn't We is that property office Woodlake. a only tenants exiting building time, we profile. that sale this we've have We strength during didn't community. of Spoerlien often in at to profile, focused expertise. I comment having our That very strategy look property our categories Chicago, on that year. serve of this property

beauty, of results from progresses. XXXX growth. service-oriented tenant report every accomplish to those restaurants, and I'm see almost we And now and as what I'm education, and businesses the well results performing can that, eager we'll team right leasing have category financial to seeing Scott with health, other fitness cover is and type financials. are However, drive year in the eager

J. Scott Hogan

in of fourth versus delivered for quarter the XXXX versus core and XXXX. We full FFO for the in share fourth $X.XX XXXX Christine. for the quarter you, of Thank year $X.XX $X.XX XXXX, $X.XX year the full per

walk along Slide to share XXXX core want to you XXXX may earnings variance, I'll you follow through per Now the and FFO on XX.

benefit reduction $X.XX in of that XXXX. as in CEO should our first shares driver core and from be NOI adding with was not the repeated quarter G&A in share, $X.XX XXXX drove of $X.XX. the per year, former employees every key Same-store including a associated FFO other restricted forfeiture outstanding our it was growth positive

interest reflects drove G&A ours expense, items reduction normally a increases to related our in and an $X.XX expense drove While also year-over-year reduction. CEO. $X.XX litigation Other compensation former Pillarstone and contains expense

quarter we credit reminder, facility primarily current a quarters in between XXXX. variance the of and our the XXXX so the X the former of third impacted As credit first amended facility

FFO we mentioned, of XXXX introduced per core a guidance yesterday Dave with $X.XX As $X.XX. to share range

and core to quarter of monetization anticipate per of first following to some anticipate forecasted of is midpoint unit and in forecasted NOI over primarily non-same-store significantly under January expense deficits in you improve and FFO the related quarter FFO cents the XXXX share Interest because forecasted walk anticipate the to you core NOI of a first reflecting the because I expected July. Overall, be that's XXXX. add our interest as the share. over assume by reductions primarily SOFR couple changes $X.XX of from amount XXXX are to expense due me $X.XX drive guidance OP annual the curve is a lower quarters, earnings drive will to if paydown part of debt Let increase CEO through expected average, G&A course ] and in between a we $X.XX. Same-store into [ of higher Pillarstone $X.XX We longer $X.XX be of divide due shape the year, interest the our be litigation in and of items with reduced. driven and to Pillarstone is growth average the guidance should cost of the in in former cents to both Other interest couple the our equity X method the expense I occur of expense, no precent the year. our the fourth primarily to partial XXXX, a redemption $X.XX. expense, investment per reduction Pillarstone clauses sales expected

me addition to between NOI still EOS but growth. X.XX%. we a the other debt and a expected of in X%. and be debt it elements improved Bad in bringing Same-store little cover is by between is is strong to is XX We are The the to to change basis down be X.X% XXXX, points lower, bad X.X%. expecting In few delay forecasted the our headline, guidance. reason X.X% commencement let

help Our of quality number low. revenue this keep initiatives should

investment improve by our Finally, the quarter metric to we're of to is XXXX, and between the that Xx majority our of fourth able monetize to not debt-to-EBITDAre until forecasted X.Xx XXXX. assumes Pillarstone and

questions. should earnings our in believe growth very pleased we'll open you level. And in in a XXXX all continuing that, the joining dividends for we beyond. Thank dividend earnings monthly earnings, and XXXX good believe X% for with we'll our grow announce have and and We to We are increase with call. line

Operator

[Operator Instructions] the line Citizens of Mitch with Our first comes question Germain JMP. from

Mitch Germain

you [Technical are How Difficulty].

David Holeman

you Mitch, I think bit. a broke up

Mitch Germain

I'm in of terms bit revenue. that number bad little little it little you to Sorry driving seems XXXX. anything of like I debt -- higher just that of be about to higher year-over-year? there to know, -- that. there's curious And quality it's sure But is conservatism specific don't want a that talked hint midpoint obviously, just bad. a forecasted is of in My I bit is -- be number. a your in I'm about that

J. Scott Hogan

The where year. going to end, it's we Mitch, debt specific there's the drive -- isn't that no midpoint Scott. bad debt necessarily the is no, bad higher and forecast comfortable range assumptions put or the have bad into a we debt identified we're are next tenants to with, that we expect that

Mitch Germain

from percentage What we trend the portfolio to should about talk of but we peers, helpful. How comes That's obviously think smaller ones? that? about relative it your Obviously, what specifically? these larger above Okay. is tenants that

David Holeman

Yes.

think PowerPoint I page Mitch, our a out In number, call the I Page number Mordy to Dave. David it's think X? breaks give today, for -- page a going is -- that but there's me

David Mordy

Yes.

David Holeman

Approximately smaller ABR Breaks tenant today. are spaces the base. in out of in that demand our high XX% is our really

So we sector, type of that Whitestone in versus many high key we this think have others the that's a and of are differentiator demand. in spaces

Mitch Germain

Agreed.

smaller. interestingly be creates of of a but some deleveraging the seem Okay. before bit smaller got commences. redevelopment a talk you're Dave, Obviously, of of and your parcels EBITDA and leverage are that mentioned clearly, -- we've you about your little to activating higher process lot products initially opportunities, obviously, in the -- going that land

on portfolio you feel got you those the of potential be opportunities So could opportunities the how some embedded maybe potential monetized? some perspective that could if and you've just provide in

David Holeman

some I of you, to share challenge tell over development to earnings. years, capitalized give is last development our I'll couple of a maybe ask about number we've things balance opportunities. opportunities. of our and improved driven the high-level goal Mitch, our a will sheet. We've and do more on We've couple Christine I'll Yes, comments, the

and balance strong So a progress Christine balance. line the and on then bit opportunities. on a on little we're creation. Maybe value top sheet plan the focused made let development it's always I'll comment improvement have We're focused obviously

Christine C. Mastandrea

to best look way of the in think at I is buildings. Mitch, smaller portfolio our pads most are these

And just build, approval you you through venture, frame. get and is cost, actually takes low-cost time process, time place your is the a capital right? time positions start when which in to up, it By significant an That like that so frame that's X-month to these takes get which time. start a then the you

So it to take get takes long it districts have pads zoning that to approved that these doesn't to you the a build while within out, work with. them

course, you So your once months. get I'd it's them you're start, with you -- like and things costs, say, that's these you the once of significant I think approval, maybe the then once X to And very your easy get able you on returns your capital rents. capital then to -- costs of are achieve then out ground, then get

So pads... most our of smaller

Mitch Germain

many So how many of have now? entitlements these -- these of pads right how

Christine C. Mastandrea

at but approved through alone. are those one forward. those is strategy right pads move there Those see, -- looking fully have, X. what leasing already to of I'm I've are X like a got in let's too, approved year, following working a number pads we're that the amp to depends. years X up the doing doing we're to Park. It and about X And that We to Dana to X small Dana have Like already has

team. manage also think, frame, well of with So with sure have work about XX we and time. resources XX pads over it our making appropriately just I to It's we over, about that our can on time question we the that have within the a can it -- through the leasability portfolio, we

Mitch Germain

Great. me. That's for And one then helpful. last

on with was frame Obviously, damages the timing to please? some the valuation Just, be had of of sort ruling. stands, sort the Dave, where or on some time perspective believe resolution where of I that the maybe Maybe ruling provided. provided some the Pillarstone some associated of perspective remedy necessary

David Holeman

for Pillarstone, with along. an is investment and very we're we're exit. in communicated ruled been looking pleased on court the -- Obviously, what had we obviously, ruling, all Sure. We've the that which that our damaged

Pillarstone provide payment a us. some to obligations value So to a the court well has as to as

only I would year. as collected of focused into the in phase. on tell moving guidance, possible. in exited that we quickly we're and getting are we the part Scott have a that you commented as that this partial collection And monetization

year balance We the I'd report love have we more that got in quickly. to the in much 'XX. that

now, we're orderly very pleased very believe a as this So -- where right decision. to working of hard and which number quickly. we're monetized I exit, give we Whitestone's have point. just you have far an in of we'll things, as exact move We're very of a exit much kind all the plan through progress the working of are with for, in we It's system. decisions been the We're because favor timing court and but through at supportive looking

Operator

with comes question Securities. next of Truist line from Our Hau the Anthony

Anthony Hau

I raised saw directors morning, have plans questions, conversations experience? they to liquidate? and thought what and the release, Board Board. And proposal this So Board X news the real more you Since Asset the that Bruce to had the guys press adding have members Management December Erez right. about And a relevant estate have to to nominate discussions his other with few --

David Holeman

that. I'll give couple comments to It's of Anthony. a Thanks, Dave.

made quotes we've what that unnamed discussions off shareholders, feedback just kind letter can And at proud focused that's because with have comment the to all, Erez. and received We sources. want comment we We We don't want we like obviously, this of on We We're market execution to minimize couple we we shareholder say. obviously, but rumors welcome articles we progress discussion, and article. did a on years. December, delivery. don't individual don't and publish Mr. of discuss transparent. in with important or we publicly. Really point, over on last shareholder top, of of We First misinformation. Schanzer the think the and discussions, great obviously, did love Bloomberg it's the be from from to

and with our question, but we've the Anthony, would Bruce. only add the published follow-up would I comment we've thing Board, question. The this obviously, lot I Board evaluate the make at happy letter upgrading that. great done that think very that's diversity, to feels about continue continue brought I place. published And skill people think on our sets that, our in from of response refreshing on I we good at new point and have a a look your We I is think to right

Our Board they seriously. also the strategic at takes take seriously, role very ways value looking we and very that we have and create the

Anthony Hau

Okay.

I the guidance? was reason missed if increase? Sorry, of this, the same-store up that XXXX quarter. low drove was but the at like NOI XX% property maintenance What And operating the and that this end why pool in same-store main was for

J. Scott Hogan

it's Anthony, Scott.

side, of exterior and in portfolio. to maintenance the majority On that's parking reservices in rate think Those X buildings, help the leasing properties have maintenance Arizona. large properties the lower some rates. to going little our We accelerated or lot of a X than recovery value we add painting items, happen

component was a same-store of being than So a lower that expected. the little

Beyond Christine was, the one mentioned of was & in I portion another was smaller piece. Bed delayed the The commencement re-tenanted And then other a year add Bath think of it. towards EOS, end that that we drove

type of same-store the maintenance XX-year So components again, every reservices of then are decrease. painting side, once are And those once X parking and on expenses. the lot those the

Anthony Hau

are monetary What Got that Whitestone on that know the recover you court you. a the now. fully the judgment... can one through guys quick chances Pillarstone. are And I bankruptcy going then

David Holeman

Dave. it's Anthony,

at the this we've phase point with we receiving damaged rulings moving that to very had and toward you are As we that exit. collection the right positive been said,

underlying said, investment remain you that look the has in of Pillarstone We bankruptcy, that. you is As confident -- and when filed moving the value at we're through assets.

our million. $XX is investment Our roughly books on

to believe of that. is north continue value that the of the assets underlying We

story So through it's the number getting hard a now to do noise we're but think and the that moving shortly. very process this of nail out hopefully in down I of

Operator

Our next question of with from line Oxford Colliers. Barry comes the

Barry Oxford

fluid the On guys able to is buyers looking financing fairly relatively it when the at disposition you get are are easily? that, and market

David Holeman

Dave. it's good Very Barry, question.

transaction we're uptick think we seeing are I little -- market. a the of bit continuing in

I And but think not as I financing. get buyers transactions. able interest would clarity rates deep, we on get where super the say seeing are. all Still seeing we to are more more we're

X%, we've in financing to been now above closer component, are a little that some and the at rates a that transactions, -- work. ability there's that, So seen and rates to but financing to the can bit recent get probably closer

So We're we also move seeing up the we're normalize. sales bit. -- market rates that the are seeing cap on acquisition side seeing on side, a

that So we're continuing monitor great opportunities. to for

Barry Oxford

Is much run one Or do year? match as acquisitions? possible dispositions the to and as front it your think plan humanly will you the in of other this

David Holeman

Yes.

I -- adding our -- think way. and day responsibility every We've focus we I'll creating it this we on value. say is what and

really and redeploying into Over the assets. selling the couple been last recycling, of we've of years, continuing upgrade new to portfolio bit through a assets

things years, in and capital of But are for right an this scaling are $XX for sales it to opportunities we've going my we acquiring probably in is for the as going in kind growing disciplined that that been of allocation, as and ongoing to last We done that to X:X. opportunities of mentioned level XX the $XX base do given appropriate I in would to I last for basis. And expect largely going dispositions remarks would think that I there's be continue for a in about years, of of long-term now, months. very the well portfolio million said be of we've -- that sure the to our it's right platform think decisions value. But million as believe those that today. starting improve. decisions last assets I we've up that, be couple where, making on is we're there's is 'XX, as to similar the believe asset our that size very, potentially open couple be but think guidance we and XX

Operator

Our next B. of comes from line the with question John Massocca Riley Securities.

John Massocca

you're little Maybe maybe around about more color $X.XX provide associated with guidance, think legal from that ongoing today? look now Is about is resolution for kind as it kind court-related in a year there? the guidance basically what assuming issues the at of the it the costs and July? of Pillarstone, Or can as you we as to you situation ongoing to drag as issues think a you full

David Holeman

think Scott the our But are Pillarstone to guidance. front, on collection. let maybe related I efforts I'll talk largely, on

redemption it the So amounts moved through process. going we've our ownership think way. now We've and now to get work our other of that to In words, those we're collected. effort, done of

further and the I'll So activities, that's give let comments. Scott maybe largely

J. Scott Hogan

Well, on the guidance it's a drag. side, I don't $X.XX think

in additional we've of just category. other got think the $X.XX I

guidance And look Pillarstone and had our January. lower costs OP 'XX in at expecting XXXX, around redeemed we we're the so litigation then also, for what units we when you in against

on goes So the Pillarstone starting a our deficit to line had in so. January related away XX that's or income statement

So we a on collecting from we with to expect the longer move lower that just no and bit deficits recognizing expect think equity of method amounts pickup little associated Pillarstone I costs. then we due, were and litigation

John Massocca

were to monetization just kind least no July or G&A start you all. costs? that when run when being of $X.XX you Or you Yes, of to a kind that Pillarstone should at collecting -- And roughly Okay. monetizing those because assuming in at year mean, guiding I versus something say kind are the kind mentioned of expected to of is that rate, as some it end assets. drag, I a full from elevated Pillarstone or

J. Scott Hogan

resolved. it's Pillarstone, -- get when litigation forecasted the associated $X.X of Well, those hard with when about matters the to predict of timing all we expense million

John Massocca

in some apologies that Okay. the the pricing call, I February, Oaks. investment? And That's maybe color then on to acquisition Can and if provide going-in this in yield you Garden as fair. earlier missed but

David Holeman

John. Sure.

on the pleased were tenants and upside, So that submarket, we center to team looking community. is an and the tenants Christine in well, real really an in that improve really really area her is support and we strong, the pleased I very, as a several close Houston, to nice think, which just do in Aldi, a they 'XX, to are like type It's which Garden It's acquisition that at the the Oaks that has what apply and an to is early what continuing with very has surrounding tenants community so Aldi. from has that. of provide continues we

we're pleased the So with acquisition. very

fits portfolio off. upside than we've program to a capital with we asset our much think I think of part it what our there recycling I was disposed upgraded well, greater so better

far -- As point, cap pricing have XX-K the price. I this the have think and rates not we acquisition at that as think I will

in I been shared you rate recycling to -- you acquisitions. the given it tell that's filed. But at XX-K assets X.X% will that the haven't assets capital we are we've be individual cap But is I with able going think on probably that. buying David, program kind cap sell rates I think above and will of we the we out

given sales there'll in was actual just cap amount. I million $XX we or remember -- very exact acquisition be million be scenario, in shortly. And haven't what the rates but will file the then XX-K some individual in It this So to but $XX we on the -- fits that dispositions. is the exact the can't amount price the range was,

John Massocca

you that guidance then 'XX picture. that component of a continue NOI as that Or of some about maintenance That's results. in maybe growth something lot just in 'XX? into lighter I maybe rent is going given very how guidance. of the CapEx can seeing you think clear know were understood. should be a is what to NOI you've think But were you your items we given And bigger 'XX,

Christine C. Mastandrea

Yes.

we of our we're that is coming have early think filled all I think larger seeing we challenge and XXXX was of markets. most And the still don't our XXXX. the in that And in them, rent now of continued many but again, have I growth boxes. benefit

smaller and mean the And sheets. way, by -- smaller spaces balance doesn't smaller spaces so the

build-in anticipate a we're -- capital lot is and if again, and operations. looking serving turn. -- do sense and the with, that market, actually serving there aren't businesses intensive to this tenants revenue in We less out at have of So are those what stronger weaker transition of communities, successfully strong the initiative, we it them a lot to revenue makes quality -- with at look

David Holeman

I one more but know of shorter to increases capture thing us just know might is you quickly. those And obviously, this, leases which market I John, the one add, enables Whitestone's just benefits,

the of look that very length think they're So compared account at stronger and spreads. they're I to strong, our if spreads, take our when you into you the report even others of leases some

Operator

Group. the Diana question comes from of Maxim Michael line next Our Instructions] [Operator with

Michael Diana

Obviously, asked. most questions of my have been

progress don't you assets -- fit. noncore on great made of that rid Just getting

the said you think your any headquarters -- building. I is only comment that? one left have that's really Do you about anything

David Holeman

It office -- office building. XX% headquarters I'll building X-story probably is so occupied. our suburban roughly a just is

to portfolio, than in incredibly we else some our that similar So are different product, have support office that it's of neighborhoods. everything centers community which very

-- we expect So we as that exit I probably mentioned, property. to Christine we would think --

a is you in just nice think at we portfolio, occupy there, it's to people Woodlake fit always properties headquarters there's that geography a For other us, -- love of one we better at the the in are. of added Houston or for that just We'd made for the our those when noncore the that and of the I we that only identify. Recycling our of owned to with proceeds We've centers, retail one assets redeploy period strategy. don't we looking find way stock like But feel wise, similarly progress lot a making kind have we've home markets. in we our be be like portfolio. would We've roughly and look do sure XX value, time. we'll our where a some

we'll value. the look would recycling, probably can redeploying fit that really continue to Woodlake property proceeds point strategically, only at this create and then the So strategy where be capital doesn't more at we

Operator

Truist the is of line question follow-up with Anthony next from Securities. Hau a Our

Anthony Hau

vacant. for for noticed still box What's seeing this the of quick demand square And guys follow-up. you Park plan a I Windsor just the that Sorry, space? what are that of is feet type XX,XXX box?

Christine C. Mastandrea

some Strong only you restrictions and has power that it's work demand, and similar have it have and but centers that's power to those through. situations it of that of covenants one center, other has centers our a

other very that through to but We items work have consider a is actually have because to those, take that there. work are just through So tenants. time the I we what demand negotiable, the interested with having party, and would we're just

X not we in and is So it. have about demand interested the parties concerned Actually, there, it. filling I'm

in So other the of it's a with center. that existing couple through just working the timing tenants are

Anthony Hau

remove trying talking that's the key like things Dave And are Because I'm one one know I that of assuming was about. you the covenants, those to guys right? -- think of that I

Christine C. Mastandrea

Yes.

that highways. -- of centers you is This at one in legacy X assets, the It's few very it's models have that's As well-located major business very we avoid. that right that that. It's also of one something the have but of know, that that's we center Antonio. we we one the a San

have like anticipate So slow there. we'll demand bit the I But is a going, completed we this year. little this that is but said, that

Anthony Hau

the And at that I asset, at there's people people the right? -- same how office will I think. think Office

Christine C. Mastandrea

Yes. Yes, there is.

actually boxes, to shifted finding Depot is I different larger well. Anthony, retail that So there thing there's performed what All a around changed less is different little demand but are well would very Office there type a just strongly there in of is it their to is a one are retail. for little act note I'm that business want us more coming center distribution and there. finding -- fairly performs bit of user. that we demand It's the is has that model a a like and now type tenants just with like but

Anthony Hau

mean by you do What that?

Christine C. Mastandrea

more goods, service. or a services Yes, a less product hard and

there that fitness of did a into to found the a coming out moved are we centers, market. for already compete at they to Because the market EOS in performing study one went operator the was with operator right? of move work -- So why was were -- -- we missing it's that's and well. And with it's X why that our when other we large a type the grocers that just strongest

than with market goods again, that's that. center, will soft the services boxes. the instead whole when as product. I sale the clients benefits repeat a what for goods. -- and now that The there's then it goods, I into at of So of drives we hard something these visits a leaning in into more all other you will of look lean drive because and right hard Because, it benefits do

Anthony Hau

And shop you Trying kind have drive more dividing off I spaces? convert like ever then some the to Because -- these of like to they're like guys these to like center. higher space trying right? your the that like big these smaller space know peers small big to just do for -- rents box, considered like boxes of that, for

Christine C. Mastandrea

-- to cost in this depends one the demand there's have of at on with we Yes. And the with a of things It that the always area. type always look that.

we effectively linear with the cognizant is, portfolio of year. Because demand times a so where we're neighborhood. be shift of right to have much a what much necessary. of you the the it the of do in sure But that demand to just yes, kind we've footage linear last boxes that But compared and year for would type how -- is don't in debt fill making the that square have evolves of done that. And lot there again, So and we've type this do tapping and frontage the pretty able doing of of the how and the you couple what type always feet have? problem of change within fortunately, that returns been

Anthony Hau

replaced & me. Sorry, just one tenant for last box? Bed Bath the Which Beyond one

Christine C. Mastandrea

That Picklr. was the

So repeat especially we're traffic source finding and interesting very for our a this to be of centers businesses. with

that finding number that the of that So see spot -- make now, hot things a So it's a very outside. factor waiting weather about such right? visit that's they -- number demographic that a types has all visits for very indoors, this one. And this elements to repeat sport week, a looking we had this, demographic. sport to to and really a because the a like and professionals right of for a it's younger playing and are are versus be time high interesting X X for the is We're core people hot reserve play a also, it times happens career-oriented to sure younger other they're can interesting

fast. very, number very this. that a growing operations of So are We investigated we studied

other really work visit to to well studied one labor low went to you are pretty put capital business understand visit and -- the to returns we job of good They've it's actually done to that them. studied decision and sport, on that they're went We high them. to it's units Picklr they a Utah. as but more only need with relatively -- the things, their a the sales. that's cost a and money. made cost, low make not we We And these dedicated their into was with we And how a out

one, and first So mover tap how advantage. right one the the into understood we want the to quickly had to market find that the

we and so the open shortly. happy. permit, very their to got just we and expect with them be They worked Picklr And

Anthony Hau

pickleball, make That's right? I to sure. just want

Christine C. Mastandrea

a they're of I'm wondering N the more which pickleball. that that more towards it's number moved on the Pickle, people a for we are Picklr is cost. Yes, towards sorry. who it's there venue those this, but type it's the in entertainment variants and a This are are -- is, capital pickleball, are less Chicken of interested great, like playing but higher --

likes core show every So the hard into to week. up what consider and player the consistent more we -- that we the went

So...

Operator

that gentlemen, and turn floor for final back question-and-answer our session. to Mr. the comments. any Holeman concludes I'll Ladies

David Holeman

all, first thank Well, you, for attending everyone, today. of

our As I is comments, more business said in be strong of fundamentals my bullish how positioned. I can't Whitestone the and about

providing XXXX We we forward and throughout move the look strong year. forward and a updates to looking are excited as to

have So great thanks hope all, you. to you once again, and a day. Thank

Operator

concludes you. This Thank today's conference.

lines time. You you your participation. may this at for Thank disconnect your

Whitestone REIT (WSR) 7 Mar 242023 Q4 Earnings call transcript