Whitestone REIT (NYSE: WSR) (“Whitestone” or the “Company”) today
announced its operating and financial results for the third quarter
of 2020 along with an update on its business activities in light of
the ongoing COVID-19 pandemic. Whitestone is a community-centered
shopping center REIT that acquires, owns, manages, develops and
redevelops high-quality open-air neighborhood centers primarily in
the largest, fastest-growing and most affluent markets in the
Sunbelt. Whitestone seeks to create communities that thrive through
creating local connections between consumers in the surrounding
communities and a well-crafted mix of national, regional and local
tenants that provide daily necessities, needed services,
entertainment and experiences. Whitestone is a monthly dividend
paying stock and has consistently paid dividends for over 15 years.
Whitestone’s strong balanced and managed capital structure provides
stability and flexibility for growth and positions Whitestone to
perform well through economic cycles.
All per share amounts are on a diluted per
common share and operating partnership (“OP”) unit basis unless
stated otherwise.
Third Quarter Operating and Financial
Highlights:
- Net Income attributable to common shareholders of $0.9 million,
or $0.02 per diluted share
- Funds from Operations (“FFO”) was $8.5 million, or $0.19 per
share
- FFO Core was $10.1 million or $0.23 per share
- Paid quarterly dividend of $0.105 per share
- Rental rates on comparable new and renewal leases signed for
the twelve months ended September 30, 2020 increased 4.9% and
12.1%, respectively, on a GAAP basis
- Same-store Net Operating Income (“NOI”) decreased 4.5% and 4.4%
for the three and nine month periods, respectively
- Reduced real estate debt by $9.5 million
COVID-19 Update Summary (as of October
26, 2020)
- All 53 community centers are open and have remained open
throughout the pandemic
- 97% of tenants are open and operating (based on ABR)
- 90% of third quarter 2020 contractual rents have been
collected
- 90% of total October contractual rents have been collected to
date
- Entered into rent deferral agreements representing 3% of third
quarter 2020 revenue
- Grew cash and cash equivalents by 11% since March 31, 2020 to
$40.7 million
- Bad debt/uncollectable revenue for the quarter was
$1.4 million, or $0.03 per share, primarily due to COVID-19
pandemic and included $125,000 non-cash straight-line
receivables
Jim Mastandrea, Chairman and Chief Executive
Officer of Whitestone REIT, commented, “We continue to produce
strong operating results and lead the shopping center sector in
cash rental collections. Our business has performed well during the
pandemic as our entrepreneurial tenants persevere through these
uncertain times. Our team has worked tirelessly to help our
service-focused, community-centered tenants find creative ways to
utilize our open-air properties to serve their local
neighborhoods. Our focus remains on protecting our employees,
tenants, and communities and the value we have created for the
stakeholders we serve.”
Financial Results
Reconciliations of Net Income Attributable to
Whitestone REIT to FFO and FFO Core are included herein.
Net income attributable to common shareholders
for the quarter ended September 30, 2020 was $0.9 million, or
$0.02 per diluted share, inclusive of $1.4 million, or $0.03
per share, related to credit loss and straight-line rent reserve,
primarily due to the impact of the COVID-19 pandemic. Net
income attributable to common shareholders for the quarter ended
September 30, 2019 was $1.8 million, or $0.04 per share.
FFO for the quarter ended September 30,
2020 was $8.5 million, or $0.19 per share, as compared to $9.2
million, or $0.22 per share for the quarter ended
September 30, 2019. The decrease is primarily due to the
$1.4 million of bad debt/uncollectable revenue primarily
related to the impact of the COVID-19 pandemic. FFO Core for
the quarter ended September 30, 2020 was $10.1 million or
$0.23 per share, compared to $11.0 million, or $0.26 per share for
the quarter ended September 30, 2019.
Operating Results
For the periods ending September 30, 2020
and 2019, the Company’s operating highlights were as follows:
|
Third Quarter 2020 |
Third Quarter 2019 |
Occupancy: |
|
|
Wholly Owned Properties |
88.9% |
90.4% |
Same Store Property Net Operating Income Change(1) |
(4.5)% |
2.7% |
|
|
|
Rental Rate Growth - Total (GAAP Basis): |
11.0% |
14.4% |
New Leases |
2.9% |
6.6% |
Renewal Leases |
13.9% |
16.4% |
|
|
|
Leasing Transactions: |
|
|
Number of New Leases |
32 |
26 |
New Leases - Annualized Revenue (millions) |
$9.9 |
$9.3 |
Number of Renewal Leases |
46 |
42 |
Renewal Leases - Annualized Revenue (millions) |
$9.7 |
$9.4 |
(1) Excludes straight-line rent, amortization of
above/below market rates and lease termination fees in both
periods.
Real Estate Portfolio
Update
Community Centered
Properties™ Portfolio Statistics:
As of September 30, 2020, Whitestone wholly
owned 58 Community Centered Properties™ with 5.0 million
square feet of gross leasable area ("GLA"). Five of the 58
Community Centered Properties™ are land parcels held for
future development. The portfolio is comprised of 30 properties in
Texas, 27 in Arizona and one in Illinois. Whitestone’s Community
Centered Properties™ are located in Austin (4), San Antonio
(3), Chicago (1), Dallas-Fort Worth (8), Houston (15) and the
greater Phoenix metropolitan area (27). In addition to being
business friendly, these are six of the top markets in the country
in terms of size, economic strength and population growth. 2017
estimates show the projected 5-year population growth rates for
both Austin and Dallas-Fort Worth to be 9.7%, San Antonio to be
8.6%, Houston to be 8.0%, and Phoenix to be 6.6% (1). The Company’s
properties in these markets are generally located on the best
retail corners embedded in affluent communities. The Company also
owns an 81.4% equity interest in and manages eight properties
containing 0.9 million square feet of GLA through its investment in
Pillarstone OP.
At the end of the third quarter, the Company’s
diversified tenant base was comprised of 1,386 tenants, with the
largest tenant accounting for only 2.8% of annualized base rental
revenues. Lease terms range from less than one year for smaller
tenants to over 15 years for larger tenants. Whitestone’s leases
generally include minimum monthly lease payments and tenant
reimbursements for payment of taxes, insurance and maintenance, and
typically exclude restrictive lease clauses.
(1) Source: Claritas, as of April 2017.
COVID-19 Update Summary
During the third quarter of 2020, the COVID-19
pandemic continued to impact the Company’s operations. As of
the end of the third quarter, approximately 97% (% of ABR) of the
Company’s tenants were open for business. Cash collections for the
quarter totaled 90% of contractual rents, up from 81% in the prior
quarter. These strong collections are a result of the
Company’s strategic locations, well-crafted tenant mix and the
efforts of its team members in proactively working with tenants to
assist them through these difficult times. Cash collections in
October are 90% collected to date.
Balance Sheet and Liquidity
As of October 23, 2020, Whitestone had
$40.7 million in cash and cash equivalents, $13.0 million of
availability and $110.5 million of capacity under its credit
facility. At September 30, 2020, Whitestone had $39.0 million
of cash and cash equivalents on its balance sheet, $13.0 million of
availability and $110.5 million of capacity under its credit
facility.
In the third quarter of 2020, Whitestone repaid
a $9 million mortgage loan at maturity, resulting in no real estate
debt maturing until 2022.
The Company has undepreciated real estate assets
of $1.1 billion at September 30, 2020.
At September 30, 2020, 51 of the Company’s
wholly owned 58 properties were unencumbered by mortgage debt, with
an undepreciated cost basis of $824.6 million. At
September 30, 2020, the Company had total real estate debt,
net of cash, of $628.3 million, of which approximately 84% was
subject to fixed interest rates. The Company’s weighted average
interest rate on all fixed rate debt as of the end of the third
quarter was 4.1% and the weighted average remaining term was 4.6
years.
Dividend
On September 22, 2020, the Company declared a
quarterly cash distribution of $0.105 per common share and OP unit
for the fourth quarter of 2020, to be paid in three equal
installments of $0.035 in October, November, and December of 2020.
Going forward, Whitestone’s Board of Trustees will continue to
evaluate dividend declarations each quarter. Whitestone
intends to maintain compliance with REIT taxable income
distribution requirements.
Conference Call Information
In conjunction with the issuance of its
financial results, the Company invites you to listen to the its
earnings release conference call to be broadcast live on Tuesday,
October 27, 2020 at 8:30 A.M. Eastern Time. The call will be led by
James C. Mastandrea, Chairman and Chief Executive Officer, and
David K. Holeman, Chief Financial Officer. Conference call access
information is as follows:
Dial-in number
for domestic participants: |
(800)
263-0877 |
Dial-in number for international participants: |
(646) 828-8143 |
The conference call will be recorded, and a
telephone replay will be available through Tuesday, November 10,
2020. Replay access information is as follows:
Replay number
for domestic participants: |
(844)
512-2921 |
Replay number for international participants: |
(412) 317-6671 |
Passcode (for all participants): |
7032366 |
To listen to a webcast of the conference call,
click on the Investor Relations tab of the Company’s website,
www.whitestonereit.com, and then click on the webcast link. A
replay of the call will be available on Whitestone’s website via
the webcast link until the Company’s next earnings release.
Additional information about Whitestone can be found on the
Company’s website.
The third quarter earnings release and
supplemental data package will be located in the Investor Relations
section of the Company’s website. For those without internet
access, the 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.
Supplemental Financial
Information
Supplemental materials and details regarding
Whitestone's results of operations, communities and tenants are
available on the Company's website at www.whitestonereit.com.
About Whitestone REIT
Whitestone is a community-centered shopping
center REIT that acquires, owns, manages, develops and redevelops
high-quality open-air neighborhood centers primarily in the
largest, fastest-growing and most affluent markets in the Sunbelt.
Whitestone seeks to create communities that thrive through creating
local connections between consumers in the surrounding communities
and a well-crafted mix of national, regional and local tenants that
provide daily necessities, needed services, entertainment and
experiences. Whitestone is a monthly dividend paying stock and has
consistently paid dividends for over 15 years. Whitestone’s strong,
balanced and managed capital structure provides stability and
flexibility for growth and positions Whitestone to perform well
through economic cycles. For additional information, please visit
www.whitestonereit.com.
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 include statements about our earnings
guidance, future liquidity, performance growth and expectations and
other matters and can generally be identified by the Company’s use
of forward-looking terminology, such as “may,” “will,” “plan,”
“expect,” “intend,” “anticipate,” “believe,” “continue,” “goals” or
similar words or phrases that are predictions of future events or
trends and which do not relate solely to historical matters.
The following are additional 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: uncertainties related to the COVID-19 pandemic,
including the unknown duration and economic, operational and
financial impacts of the COVID-19 pandemic, and the actions taken
or contemplated by U.S. and local governmental authorities or
others in response to the pandemic on the Company’s business,
employees and tenants, including, among others, (a) changes in
tenant demand for the Company’s properties, (b) financial
challenges confronting major tenants, including as a result of
decreased customers’ willingness to frequent, and mandated stay in
place orders that have prevented customers from frequenting, some
of Company’s tenants’ businesses and the impact of these issues on
the Company’s ability to collect rent from its tenants; (c)
operational changes implemented by the Company, including remote
working arrangements, which may put increased strain on IT systems
and create increased vulnerability to cybersecurity incidents, (d)
significant reduction in the Company’s liquidity due to the lack of
further availability under its revolving credit facility and
limited ability to access the capital markets and other sources of
financing on attractive terms or at all, and (e) prolonged measures
to contain the spread of COVID-19 or the premature easing of
government-imposed restrictions implemented to contain the spread
of COVID-19; adverse economic or real estate developments or
conditions in Texas or Arizona, Houston and Phoenix in particular,
including as a result of a surge in COVID-19 cases in such areas
and the impact on our tenants’ ability to pay their rent, which
could result in bad debt allowances or straight-line rent reserve
adjustments; the imposition of federal income taxes if we fail to
qualify as a real estate investment trust (“REIT”) in any taxable
year or forego an opportunity to ensure REIT status; the
Company's ability to meet its long-term goals, 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; its ability to successfully identify, finance
and consummate suitable acquisitions, and the impact of such
acquisitions, including financing developments, capitalization
rates and internal rates of return; the Company’s ability to reduce
or otherwise effectively manage its general and administrative
expenses; the Company’s ability to fund from cash flows or
otherwise distributions to its shareholders at current rates or at
all; current adverse market and economic conditions including, but
not limited to, the significant volatility and disruption in the
global financial markets caused by the COVID-19 pandemic and
potential volatility as a result of the upcoming U.S. presidential
election; 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, legislative and
regulatory changes, including changes to laws governing REITs
and the impact of the legislation commonly known as the Tax Cuts
and Jobs Act; 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 of 1986, as
amended; 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 from time to time.
Non-GAAP Financial Measures
This release contains supplemental financial
measures that are not calculated pursuant to U.S. generally
accepted accounting principles (“GAAP”) including EBITDA, FFO, FFO
Core, and NOI. Following are explanations and reconciliations of
these metrics to their most comparable GAAP metric.
EBITDA: Earnings Before Interest, Tax,
Depreciation and Amortization: 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), adjustments for unconsolidated real estate
partnership 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.
FFO: Funds From Operations: Management believes
that FFO is a useful measure of the Company's operating
performance. The Company computes FFO as defined by NAREIT, which
states that FFO should represent net income (loss) (calculated in
accordance with GAAP), excluding depreciation and amortization
related to real estate, gains or losses from the sale of certain
real estate assets, gains and losses from change in control, and
impairment write-downs of certain real estate assets and
investments in entities when the impairment is directly
attributable to decreases in the value of depreciable real estate
held by the entity. 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: Funds From Operations 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, proxy contest
fees, debt extension costs, non-cash share-based compensation
expense and rent support agreement payments received from sellers
on acquired assets. In addition, the Company believes that FFO Core
is a useful supplemental measure for the investing community to use
in comparing the Company to other REITs as many REITs provide some
form of adjusted or modified FFO. 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: Net Operating Income: 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, pro rata share of NOI of unconsolidated
entities 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.
Same Store NOI: Management believes that Same
Store NOI is a useful measure of the Company’s property operating
performance because it includes only the properties that have been
owned for the entire period being compared, and that it is
frequently used by the investment community. Same Store NOI assists
in eliminating differences in NOI due to the acquisition or
disposition of properties during the period being presented,
providing a more consistent measure of the Company’s performance.
The Company defines Same Store NOI as operating revenues (rental
and other revenues, excluding straight-line rent adjustments,
amortization of above/below market rents, and lease termination
fees) less property and related expenses (property operation and
maintenance and real estate taxes), Non-Same Store NOI, and NOI of
our investment in Pillarstone OP (pro rata). We define “Non-Same
Stores” as properties that have been acquired since the beginning
of the period being compared and properties that have been sold,
but not classified as discontinued operations. Other REITs may use
different methodologies for calculating Same Store NOI, and
accordingly, the Company's Same Store NOI may not be comparable to
that of other REITs.
Investors Contact:Kevin Reed, Director of
Investor RelationsWhitestone REIT(713)
435-2219ir@whitestonereit.com
Whitestone REIT and Subsidiaries |
CONSOLIDATED BALANCE SHEETS |
(in thousands, except per share data) |
|
|
|
September 30, 2020 |
|
December 31, 2019 |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Real estate assets, at cost |
|
Property |
|
$ |
1,104,963 |
|
|
$ |
1,099,955 |
|
Accumulated depreciation |
|
|
(157,303 |
) |
|
|
(137,933 |
) |
Total real estate assets |
|
|
947,660 |
|
|
|
962,022 |
|
Investment in real estate partnership |
|
|
34,849 |
|
|
|
34,097 |
|
Cash and cash equivalents |
|
|
38,990 |
|
|
|
15,530 |
|
Restricted cash |
|
|
128 |
|
|
|
113 |
|
Escrows and acquisition deposits |
|
|
7,866 |
|
|
|
8,388 |
|
Accrued rents and accounts receivable, net of allowance for
doubtful accounts (1) |
|
|
23,604 |
|
|
|
22,854 |
|
Receivable due from related party |
|
|
1,302 |
|
|
|
477 |
|
Unamortized lease commissions, legal fees and loan costs |
|
|
8,082 |
|
|
|
8,960 |
|
Prepaid expenses and other assets(2) |
|
|
2,444 |
|
|
|
3,819 |
|
Total assets |
|
$ |
1,064,925 |
|
|
$ |
1,056,260 |
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
Notes payable |
|
$ |
666,516 |
|
|
$ |
644,699 |
|
Accounts payable and accrued expenses(3) |
|
|
49,861 |
|
|
|
39,336 |
|
Payable due to related party |
|
|
845 |
|
|
|
307 |
|
Tenants' security deposits |
|
|
6,915 |
|
|
|
6,617 |
|
Dividends and distributions payable |
|
|
4,528 |
|
|
|
12,203 |
|
Total liabilities |
|
|
728,665 |
|
|
|
703,162 |
|
Commitments and contingencies: |
|
|
- |
|
|
|
- |
|
Equity: |
|
|
|
|
Preferred shares, $0.001 par value per share; 50,000,000 shares
authorized; none issued and outstanding as of September 30, 2020
and December 31, 2019 |
|
|
- |
|
|
|
- |
|
Common shares, $0.001 par value per share; 400,000,000 shares
authorized; 42,353,309 and 41,492,117 issued and outstanding as of
September 30, 2020 and December 31, 2019, respectively |
|
|
42 |
|
|
|
41 |
|
Additional paid-in capital |
|
|
560,129 |
|
|
|
554,816 |
|
Accumulated deficit |
|
|
(214,468 |
) |
|
|
(204,049 |
) |
Accumulated other comprehensive loss |
|
|
(15,707 |
) |
|
|
(5,491 |
) |
Total Whitestone REIT shareholders' equity |
|
|
329,996 |
|
|
|
345,317 |
|
Noncontrolling interest in subsidiary |
|
|
6,264 |
|
|
|
7,781 |
|
Total equity |
|
|
336,260 |
|
|
|
353,098 |
|
Total liabilities and equity |
|
$ |
1,064,925 |
|
|
$ |
1,056,260 |
|
|
|
|
|
|
|
September 30, 2020 |
|
December 31, 2019 |
(1) Accrued rents and
accounts receivable, net of allowance for doubtful
accounts |
|
|
|
|
Tenant receivables |
|
$ |
22,944 |
|
|
$ |
16,741 |
|
Accrued rents and other recoveries |
|
|
15,926 |
|
|
|
16,983 |
|
Allowance for doubtful accounts |
|
|
(15,465 |
) |
|
|
(11,173 |
) |
Other receivables |
|
|
199 |
|
|
|
303 |
|
Total accrued rents and accounts receivable, net of allowance for
doubtful accounts |
|
$ |
23,604 |
|
|
$ |
22,854 |
|
|
|
|
|
(2) Operating lease right of use assets (net) |
|
$ |
813 |
|
|
$ |
1,328 |
|
(3) Operating lease liabilities |
|
$ |
819 |
|
|
$ |
1,331 |
|
|
Whitestone REIT and
SubsidiariesCONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)(in
thousands) |
|
|
|
|
|
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|
|
2020 |
|
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenues |
|
|
|
|
|
Rental(1) |
$ |
28,868 |
|
|
$ |
29,368 |
|
$ |
86,116 |
|
$ |
87,527 |
|
Management, transaction, and other fees |
|
1,032 |
|
|
|
511 |
|
|
1,965 |
|
|
1,624 |
|
Total revenues |
|
29,900 |
|
|
|
29,879 |
|
|
88,081 |
|
|
89,151 |
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
Depreciation and amortization |
|
7,171 |
|
|
|
6,789 |
|
|
21,112 |
|
|
19,865 |
|
Operating and maintenance |
|
5,029 |
|
|
|
5,118 |
|
|
15,021 |
|
|
14,760 |
|
Real estate taxes |
|
4,670 |
|
|
|
4,410 |
|
|
13,591 |
|
|
12,474 |
|
General and administrative |
|
5,860 |
|
|
|
5,597 |
|
|
15,604 |
|
|
16,514 |
|
Total operating expenses |
|
22,730 |
|
|
|
21,914 |
|
|
65,328 |
|
|
63,613 |
|
|
|
|
|
|
|
Other expenses
(income) |
|
|
|
|
|
Interest expense |
|
6,400 |
|
|
|
6,679 |
|
|
19,561 |
|
|
19,738 |
|
Loss on sale or disposal of assets and assets held for sale |
|
18 |
|
|
|
- |
|
|
882 |
|
|
115 |
|
Interest, dividend and other investment income |
|
(71 |
) |
|
|
(141 |
) |
|
(206 |
) |
|
(550 |
) |
Total other expense |
|
6,347 |
|
|
|
6,538 |
|
|
20,237 |
|
|
19,303 |
|
|
|
|
|
|
|
Income before equity investments in real estate
partnerships and income tax |
|
823 |
|
|
|
1,427 |
|
|
2,516 |
|
|
6,235 |
|
|
|
|
|
|
|
Equity in earnings of real estate partnership |
|
196 |
|
|
|
524 |
|
|
752 |
|
|
1,480 |
|
Provision for income tax |
|
(105 |
) |
|
|
(102 |
) |
|
(288 |
) |
|
(324 |
) |
Income from continuing
operations |
|
914 |
|
|
|
1,849 |
|
|
2,980 |
|
|
7,391 |
|
|
|
|
|
|
|
Gain on sale of property from discontinued operations |
|
- |
|
|
|
- |
|
|
- |
|
|
701 |
|
Income from
discontinued operations |
|
- |
|
|
|
- |
|
|
- |
|
|
701 |
|
|
|
|
|
|
|
Net
income |
|
914 |
|
|
|
1,849 |
|
|
2,980 |
|
|
8,092 |
|
|
|
|
|
|
|
Less: Net income attributable to noncontrolling interests |
|
14 |
|
|
|
42 |
|
|
58 |
|
|
184 |
|
|
|
|
|
|
|
Net income
attributable to Whitestone REIT |
$ |
900 |
|
|
$ |
1,807 |
|
$ |
2,922 |
|
$ |
7,908 |
|
|
|
|
|
|
|
Whitestone REIT and
SubsidiariesCONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)(in thousands,
except per share data) |
|
|
|
|
|
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|
|
2020 |
|
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Basic Earnings Per
Share: |
|
|
|
|
|
Income from continuing
operations attributable to Whitestone REIT, excluding amounts
attributable to unvested restricted shares |
$ |
0.02 |
|
|
$ |
0.04 |
|
$ |
0.07 |
|
$ |
0.18 |
|
Income from discontinued
operations attributable to Whitestone REIT |
|
0.00 |
|
|
|
0.00 |
|
|
0.00 |
|
|
0.02 |
|
Net income attributable to common shareholders, excluding amounts
attributable to unvested restricted shares |
$ |
0.02 |
|
|
$ |
0.04 |
|
$ |
0.07 |
|
$ |
0.20 |
|
Diluted Earnings Per
Share: |
|
|
|
|
|
Income from continuing
operations attributable to Whitestone REIT, excluding amounts
attributable to unvested restricted shares |
$ |
0.02 |
|
|
$ |
0.04 |
|
$ |
0.07 |
|
$ |
0.17 |
|
Income from discontinued
operations attributable to Whitestone REIT |
|
0.00 |
|
|
|
0.00 |
|
|
0.00 |
|
|
0.02 |
|
Net income attributable to
common shareholders, excluding amounts attributable to unvested
restricted shares |
$ |
0.02 |
|
|
$ |
0.04 |
|
$ |
0.07 |
|
$ |
0.19 |
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding: |
|
|
|
|
|
Basic |
|
42,346 |
|
|
|
40,187 |
|
|
42,202 |
|
|
39,942 |
|
Diluted |
|
43,440 |
|
|
|
41,446 |
|
|
43,040 |
|
|
41,084 |
|
|
|
|
|
|
|
Consolidated
Statements of Comprehensive Income (Loss) |
|
|
|
|
|
|
|
|
|
|
|
Net
income |
$ |
914 |
|
|
$ |
1,849 |
|
$ |
2,980 |
|
$ |
8,092 |
|
|
|
|
|
|
|
Other comprehensive
income (loss) |
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) on cash
flow hedging activities |
|
1,241 |
|
|
|
(2,235 |
) |
|
(10,395 |
) |
|
(11,740 |
) |
|
|
|
|
|
|
Comprehensive income
(loss) |
|
2,155 |
|
|
|
(386 |
) |
|
(7,415 |
) |
|
(3,648 |
) |
|
|
|
|
|
|
Less: Net income attributable
to noncontrolling interests |
|
14 |
|
|
|
42 |
|
|
58 |
|
|
184 |
|
Less: Comprehensive income
(loss) attributable to noncontrolling interests |
|
43 |
|
|
|
(51 |
) |
|
(203 |
) |
|
(266 |
) |
|
|
|
|
|
|
Comprehensive income
(loss) attributable to Whitestone REIT |
$ |
2,098 |
|
|
$ |
(377 |
) |
$ |
(7,270 |
) |
$ |
(3,566 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Whitestone REIT and
SubsidiariesCONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)(in
thousands) |
|
|
|
|
|
|
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|
|
2020 |
|
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
(1) Rental |
|
|
|
|
|
Rental revenues |
$ |
21,808 |
|
|
$ |
21,623 |
|
$ |
65,591 |
|
$ |
64,752 |
|
Recoveries |
|
8,339 |
|
|
|
8,240 |
|
|
24,976 |
|
|
23,701 |
|
Bad debt |
|
(1,279 |
) |
|
|
(495 |
) |
|
(4,451 |
) |
|
(926 |
) |
Total rental |
$ |
28,868 |
|
|
$ |
29,368 |
|
$ |
86,116 |
|
$ |
87,527 |
|
|
|
|
|
|
|
|
|
|
|
|
Whitestone REIT and Subsidiaries CONSOLIDATED STATEMENTS OF
CASH FLOWS (in thousands) |
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
|
2019 |
|
Cash flows from
operating activities: |
|
|
|
|
Net income from continuing
operations |
|
$ |
2,980 |
|
|
$ |
7,391 |
|
Net income from discontinued
operations |
|
|
- |
|
|
|
701 |
|
Net income |
|
|
2,980 |
|
|
|
8,092 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
|
Depreciation and
amortization |
|
|
21,112 |
|
|
|
19,865 |
|
Amortization of deferred loan
costs |
|
|
839 |
|
|
|
814 |
|
Loss on sale or disposal of
assets and assets held for sale |
|
|
882 |
|
|
|
115 |
|
Bad debt |
|
|
4,451 |
|
|
|
926 |
|
Share-based compensation |
|
|
3,980 |
|
|
|
4,548 |
|
Equity in earnings of real
estate partnership |
|
|
(752 |
) |
|
|
(1,480 |
) |
Changes in operating assets
and liabilities: |
|
|
|
|
Escrows and acquisition
deposits |
|
|
522 |
|
|
|
48 |
|
Accrued rents and accounts
receivable |
|
|
(6,123 |
) |
|
|
(1,762 |
) |
Receivable due from related
party |
|
|
(825 |
) |
|
|
15 |
|
Distributions from real estate
partnership |
|
|
- |
|
|
|
1,005 |
|
Unamortized lease commissions,
legal fees and loan costs |
|
|
(958 |
) |
|
|
(202 |
) |
Prepaid expenses and other
assets |
|
|
2,145 |
|
|
|
(6,838 |
) |
Accounts payable and accrued
expenses |
|
|
131 |
|
|
|
5,206 |
|
Payable due to related
party |
|
|
538 |
|
|
|
15 |
|
Tenants' security
deposits |
|
|
298 |
|
|
|
310 |
|
Net cash provided by operating
activities |
|
|
29,220 |
|
|
|
29,976 |
|
Cash flows from
investing activities: |
|
|
|
|
Additions to real estate |
|
|
(5,808 |
) |
|
|
(9,953 |
) |
Proceeds from note
receivable |
|
|
922 |
|
|
|
- |
|
Net cash used in investing
activities |
|
|
(4,886 |
) |
|
|
(9,953 |
) |
Net cash provided by investing
activities of discontinued operations |
|
|
- |
|
|
|
701 |
|
Cash flows from
financing activities: |
|
|
|
|
Distributions paid to common
shareholders |
|
|
(20,771 |
) |
|
|
(34,047 |
) |
Distributions paid to OP unit
holders |
|
|
(430 |
) |
|
|
(793 |
) |
Proceeds from issuance of
common shares, net of offering costs |
|
|
2,241 |
|
|
|
8,546 |
|
Payments of exchange offer
costs |
|
|
(43 |
) |
|
|
(5 |
) |
Proceeds from notes
payable |
|
|
1,734 |
|
|
|
- |
|
Proceeds from bonds
payable |
|
|
- |
|
|
|
100,000 |
|
Net proceeds from (payments
of) credit facility |
|
|
30,000 |
|
|
|
(90,200 |
) |
Repayments of notes
payable |
|
|
(11,514 |
) |
|
|
(7,502 |
) |
Payments of loan origination
costs |
|
|
- |
|
|
|
(4,088 |
) |
Repurchase of common
shares |
|
|
(2,076 |
) |
|
|
(776 |
) |
Net cash used in financing
activities |
|
|
(859 |
) |
|
|
(28,865 |
) |
Net increase (decrease) in
cash, cash equivalents and restricted cash |
|
|
23,475 |
|
|
|
(8,141 |
) |
Cash, cash equivalents and
restricted cash at beginning of period |
|
|
15,643 |
|
|
|
13,786 |
|
Cash, cash equivalents and
restricted cash at end of period (1) |
|
$ |
39,118 |
|
|
$ |
5,645 |
|
|
|
|
|
|
|
|
|
|
|
(1) For a
reconciliation of cash, cash equivalents and restricted cash, see
supplemental disclosures below. |
|
|
|
|
|
|
|
|
|
|
Whitestone REIT and
SubsidiariesCONSOLIDATED STATEMENTS OF CASH
FLOWSSupplemental Disclosures(in
thousands) |
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
|
2019 |
|
Supplemental
disclosure of cash flow information: |
|
|
|
|
Cash paid for interest |
|
$ |
18,790 |
|
|
$ |
19,176 |
|
Cash paid for taxes |
|
$ |
353 |
|
|
$ |
396 |
|
Non cash investing and
financing activities: |
|
|
|
|
Disposal of fully depreciated
real estate |
|
$ |
34 |
|
|
$ |
203 |
|
Financed insurance
premiums |
|
$ |
1,431 |
|
|
$ |
1,238 |
|
Value of shares issued under
dividend reinvestment plan |
|
$ |
74 |
|
|
$ |
104 |
|
Value of common shares
exchanged for OP units |
|
$ |
1,138 |
|
|
$ |
37 |
|
Change in fair value of cash
flow hedge |
|
$ |
(10,395 |
) |
|
$ |
(11,740 |
) |
|
|
|
|
|
|
|
September 30, |
|
|
|
2020 |
|
|
|
2019 |
|
Cash, cash equivalents
and restricted cash |
|
|
|
|
Cash and cash equivalents |
|
$ |
38,990 |
|
|
$ |
5,539 |
|
Restricted cash |
|
|
128 |
|
|
|
106 |
|
Total cash, cash equivalents
and restricted cash |
|
$ |
39,118 |
|
|
$ |
5,645 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, |
|
September 30, |
FFO (NAREIT) AND FFO CORE |
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Net income attributable to Whitestone REIT |
$ |
900 |
|
$ |
1,807 |
|
|
$ |
2,922 |
|
|
$ |
7,908 |
|
Adjustments to reconcile to FFO: |
|
Depreciation and amortization of real estate |
|
7,125 |
|
|
6,718 |
|
|
|
20,943 |
|
|
|
19,657 |
|
Depreciation and amortization of real estate assets of real estate
partnership (pro rata) |
|
386 |
|
|
651 |
|
|
|
1,262 |
|
|
|
1,921 |
|
Loss on disposal or impairment of assets and properties of
continuing operations, net |
|
18 |
|
|
- |
|
|
|
882 |
|
|
|
115 |
|
Gain on sale of property from discontinued operations, net |
|
- |
|
|
- |
|
|
|
- |
|
|
|
(701 |
) |
Loss on sale or disposal of properties or assets of real estate
partnership (pro rata) |
|
24 |
|
|
13 |
|
|
|
78 |
|
|
|
20 |
|
Net income attributable to noncontrolling interests |
|
14 |
|
|
42 |
|
|
|
58 |
|
|
|
184 |
|
FFO (NAREIT) |
|
8,467 |
|
|
9,231 |
|
|
|
26,145 |
|
|
|
29,104 |
|
Adjustments to reconcile to FFO Core: |
|
Share-based compensation expense |
|
1,645 |
|
|
1,719 |
|
|
|
4,167 |
|
|
|
4,770 |
|
|
|
|
|
|
|
|
FFO Core |
$ |
10,112 |
|
$ |
10,950 |
|
|
$ |
30,312 |
|
|
$ |
33,874 |
|
|
|
|
|
|
|
|
FFO PER SHARE AND OP UNIT CALCULATION |
|
Numerator: |
|
|
|
|
|
|
FFO |
$ |
8,467 |
|
$ |
9,231 |
|
|
$ |
26,145 |
|
|
$ |
29,104 |
|
Distributions paid on unvested restricted common shares |
|
- |
|
|
- |
|
|
|
- |
|
|
|
(41 |
) |
FFO excluding amounts attributable to unvested restricted common
shares |
$ |
8,467 |
|
$ |
9,231 |
|
|
$ |
26,145 |
|
|
$ |
29,063 |
|
FFO Core excluding amounts attributable to unvested restricted
common shares |
$ |
10,112 |
|
$ |
10,950 |
|
|
$ |
30,312 |
|
|
$ |
33,833 |
|
Denominator: |
|
|
|
|
|
|
Weighted average number of total common shares - basic |
|
42,346 |
|
|
40,187 |
|
|
|
42,202 |
|
|
|
39,942 |
|
Weighted average number of total noncontrolling OP units -
basic |
|
776 |
|
|
927 |
|
|
|
836 |
|
|
|
927 |
|
Weighted average number of total common shares and noncontrolling
OP units - basic |
|
43,122 |
|
|
41,114 |
|
|
|
43,038 |
|
|
|
40,869 |
|
|
Effect of dilutive securities: |
|
Unvested restricted shares |
|
1,094 |
|
|
1,259 |
|
|
|
838 |
|
|
|
1,142 |
|
Weighted average number of total common shares and noncontrolling
OP units - diluted |
|
44,216 |
|
|
42,373 |
|
|
|
43,876 |
|
|
|
42,011 |
|
|
|
|
|
|
|
|
FFO per common share and OP unit - basic |
$ |
0.20 |
|
$ |
0.22 |
|
|
$ |
0.61 |
|
|
$ |
0.71 |
|
FFO per common share and OP unit - diluted |
$ |
0.19 |
|
$ |
0.22 |
|
|
$ |
0.60 |
|
|
$ |
0.69 |
|
|
FFO Core per common share and OP unit - basic |
$ |
0.23 |
|
$ |
0.27 |
|
|
$ |
0.70 |
|
|
$ |
0.83 |
|
FFO Core per common share and OP unit - diluted |
$ |
0.23 |
|
$ |
0.26 |
|
|
$ |
0.69 |
|
|
$ |
0.81 |
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, |
|
September 30, |
PROPERTY NET OPERATING INCOME |
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Net income attributable to Whitestone REIT |
$ |
900 |
|
$ |
1,807 |
|
|
$ |
2,922 |
|
|
$ |
7,908 |
|
General and administrative expenses |
|
5,860 |
|
|
5,597 |
|
|
|
15,604 |
|
|
|
16,514 |
|
Depreciation and amortization |
|
7,171 |
|
|
6,789 |
|
|
|
21,112 |
|
|
|
19,865 |
|
Equity in earnings of real estate partnership |
|
(196 |
) |
|
(524 |
) |
|
|
(752 |
) |
|
|
(1,480 |
) |
Interest expense |
|
6,400 |
|
|
6,679 |
|
|
|
19,561 |
|
|
|
19,738 |
|
Interest, dividend and other investment income |
|
(71 |
) |
|
(141 |
) |
|
|
(206 |
) |
|
|
(550 |
) |
Provision for income taxes |
|
105 |
|
|
102 |
|
|
|
288 |
|
|
|
324 |
|
Gain on sale of property from discontinued operations, net |
|
- |
|
|
- |
|
|
|
- |
|
|
|
(701 |
) |
Management fee, net of related expenses |
|
81 |
|
|
(14 |
) |
|
|
246 |
|
|
|
(64 |
) |
Loss on sale or disposal of assets and assets held for sale of
continuing operations, net |
|
18 |
|
|
- |
|
|
|
882 |
|
|
|
115 |
|
NOI of real estate partnership (pro rata) |
|
990 |
|
|
1,714 |
|
|
|
3,250 |
|
|
|
5,152 |
|
Net income attributable to noncontrolling interests |
|
14 |
|
|
42 |
|
|
|
58 |
|
|
|
184 |
|
NOI |
|
21,272 |
|
|
22,051 |
|
|
|
62,965 |
|
|
|
67,005 |
|
Non-Same Store NOI |
|
(421 |
) |
|
16 |
|
|
|
(1,434 |
) |
|
|
116 |
|
NOI of real estate partnership (pro rata) |
|
(990 |
) |
|
(1,714 |
) |
|
|
(3,250 |
) |
|
|
(5,152 |
) |
NOI less Non-Same Store NOI and NOI of real estate
partnership (pro rata) |
|
19,861 |
|
|
20,353 |
|
|
|
58,281 |
|
|
|
61,969 |
|
Same Store straight-line rent adjustments |
|
(50 |
) |
|
(178 |
) |
|
|
640 |
|
|
|
(919 |
) |
Same Store amortization of above/below market rents |
|
(148 |
) |
|
(226 |
) |
|
|
(589 |
) |
|
|
(690 |
) |
Same Store lease termination fees |
|
(727 |
) |
|
(127 |
) |
|
|
(1,028 |
) |
|
|
(401 |
) |
Same Store NOI |
$ |
18,936 |
|
$ |
19,822 |
|
|
$ |
57,304 |
|
|
$ |
59,959 |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, |
|
September 30, |
EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND
AMORTIZATION |
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
Net income attributable to Whitestone REIT |
$ |
900 |
|
$ |
1,807 |
|
|
$ |
2,922 |
|
|
$ |
7,908 |
|
Depreciation and amortization |
|
7,171 |
|
|
6,789 |
|
|
|
21,112 |
|
|
|
19,865 |
|
Equity in earnings of real estate partnership |
|
(196 |
) |
|
(524 |
) |
|
|
(752 |
) |
|
|
(1,480 |
) |
Interest expense |
|
6,400 |
|
|
6,679 |
|
|
|
19,561 |
|
|
|
19,738 |
|
Provision for income taxes |
|
105 |
|
|
102 |
|
|
|
288 |
|
|
|
324 |
|
Gain on sale of property from discontinued operations, net |
|
- |
|
|
- |
|
|
|
- |
|
|
|
(701 |
) |
Management fee, net of related expenses |
|
81 |
|
|
(14 |
) |
|
|
246 |
|
|
|
(64 |
) |
Loss on sale or disposal of assets and assets held for sale of
continuing operations, net |
|
18 |
|
|
- |
|
|
|
882 |
|
|
|
115 |
|
EBITDA adjustments for real estate partnership |
|
804 |
|
|
1,651 |
|
|
|
2,690 |
|
|
|
4,900 |
|
Net income attributable to noncontrolling interests |
|
14 |
|
|
42 |
|
|
|
58 |
|
|
|
184 |
|
EBITDA |
$ |
15,297 |
|
$ |
16,532 |
|
|
$ |
47,007 |
|
|
$ |
50,789 |
|
|
|
|
|
|
|
|
Whitestone REIT (NYSE:WSR)
Historical Stock Chart
From Apr 2024 to May 2024
Whitestone REIT (NYSE:WSR)
Historical Stock Chart
From May 2023 to May 2024