Whitestone REIT (NYSE: WSR) (“Whitestone” or the “Company”) today
announced that it has filed its definitive proxy materials with the
Securities and Exchange Commission (“SEC”) in connection with its
2024 Annual Meeting of Stockholders scheduled to be held on May
14th, 2024. Shareholders of record as of February 21, 2024, will be
entitled to vote at the meeting.
In conjunction with the definitive proxy filing, Whitestone has
mailed a letter to the Company’s shareholders. Highlights from the
letter include:
- Stock Outperformance. Whitestone’s stock has
continued to outperform its peers and the MSCI US REIT Index. Since
changing CEOs in 2022, Whitestone has the #1 performing stock on a
1-year and 3-year Total Shareholder Return basis and has
outperformed on a 5-year basis when compared to peers and the MSCI
US REIT Index
- High Same Store NOI. Whitestone has achieved
some of the highest Same Store Net Operating Income (NOI) growth
among peers since 2022, driven by a high-quality portfolio and a
management team that is laser-focused on delivering consistent
results
- Strong Core FFO Outlook. Whitestone is
positioned to continue delivering strong results with the midpoint
of 2024 guidance indicating 11% year over year Core Funds From
Operations (FFO) per share growth; and
- No Value Added from Erez. We have concerns
regarding Erez Asset Management’s short-term focus, failure to
bring forward any new, value-enhancing ideas for Whitestone and we
believe the election of Erez’s nominees would disrupt Whitestone’s
substantial business momentum to-date and diminish the quality and
strength of the Board of Trustees
Whitestone’s definitive proxy materials and other materials
regarding the Board’s recommendation for the 2024 Annual Meeting
can be found at:
https://ir.whitestonereit.com/financial-reporting/documents/default.aspx
The full text of the letter being mailed to shareholders
follows:
Dear Fellow Shareholder,
Led by Whitestone’s revised strategy and the leadership of our
CEO David Holeman since January 2022, we are pleased to share that
our Company has been consistently executing on a strategy that is
driving value and delivering superior shareholder returns. Today,
Whitestone’s Total Shareholder Return performance is the #1 stock
amongst our peers on a 1-year and 3-year basis and has outperformed
on a 5-year basis. Our Revenue, Same Store NOI, Occupancy Rate,
Annual Net Effective Average Base Rent and Leasing metrics are all
up while our leverage is down. We’ve also successfully resolved
recent litigation, which provides the Company an additional
tailwind to improve its balance sheet. Simply put, the plan
outlined by Mr. Holeman when he took over as CEO and overseen by
our Board is working and our objective is to continue executing on
our current plan to deliver shareholder value.
However, this wasn’t always the case before 2022. Our prior CEO
was putting his own interest ahead of shareholders, unable to lead
effectively and his impact on our Company’s performance was
detrimental. Accordingly, your Board took action in a deliberate
and decisive manner and terminated the prior CEO for cause. Under
our new plan, we have paved the path forward to maximize value for
Whitestone shareholders. Since appointing Mr. Holeman as CEO, the
Board has been better aligned with our shareholders through
governance improvements and has undergone extensive refreshment
with three new trustees, each bringing unique and differentiated
perspectives into our boardroom. The management team has been
focused on improving operational and financial performance,
strengthening our balance sheet to reduce leverage and monetizing
our equity investment in the Pillarstone Partnership.
Despite our superior performance, Erez Asset Management
(“Erez”), a new opportunistic asset manager with a very limited
track record, is attempting to disrupt our progress. Instead of
proposing constructive ideas to build on our progress and further
enhance value for all shareholders, Erez has demanded a change in
Whitestone’s Board with the sole purpose of embarking on an
immediate sale or liquidation of our Company without offering any
substantive operational, financial or strategic ideas for
improvement. While the Whitestone Board is open to all avenues to
drive shareholder value, including evaluating a sale of the
Company, given the current financial market conditions and in light
of the momentum our Company is realizing, we believe that Erez is
prioritizing short term gains at the expense of long-term value
creation. Erez has nominated two individuals, Bruce Schanzer and
Catherine Clark. Our Board thoroughly evaluated and interviewed
each candidate and concluded that they lacked additive skills and
have no history of creating shareholder value at other companies
they have been affiliated with. The facts could not be clearer:
Erez’s campaign is not in the best interest of all
shareholders.
Under the leadership of your Board and experienced management
team, the Company was its own change agent, implementing a
deliberate and long-term strategy that has delivered industry
leading total shareholder returns and positioned Whitestone for an
even brighter future. Our results confirm that this is the right
strategy for Whitestone, and the financial results are the product
of our clearly defined strategy and relentless execution.
Erez’s campaign unnecessarily risks derailing our trajectory,
stalling our momentum and potentially destroying the value we have
created for you.
A vote for Whitestone’s trustees is a vote for the right
strategy, the right execution and the right Board. Voting for each
of Whitestone’s nominees on the WHITE proxy card is in the best
interests of all shareholders.
IN 2022, WHITESTONE APPOINTED NEW
LEADERSHIP TO DRIVE OUR NEW STRATEGY FOR THE
BENEFIT OF ALL SHAREHOLDERS
CEO David Holeman began 2022 by assembling the right team to
lead Whitestone, and ensuring that all employees were focused on
the Company’s core strategy:
By focusing on community and convenience with service-oriented
tenants in high-income, sun belt-located shopping centers,
Whitestone can achieve earnings growth at or near the top of its
peer set.
A number of specific actions were taken in order to drive
greater performance:
- Increased accountability
- Streamlined and strengthened the regional leasing and property
management teams with clear goals and priorities
- Eliminated micro-management, allowing for faster and better
execution
- Restored key relationships within the real estate community,
especially with the brokers, dramatically increasing transaction
flow
- Focused on the right talent that ultimately resulted in
reducing headcount by over 25% versus 2019
These actions resulted in higher morale throughout the
organization with employees having more ownership and effective
tools for success, and clear objectives that were aligned with the
management team, resulting in greater productivity.
These actions have produced substantial results:
- Occupancy has increased 290 basis points (year-end 2021 to
year-end 2023), bringing occupancy up to a record 94.2%
- Straight line leasing spreads have now exceeded 17% for seven
consecutive quarters
- Same Store Net Operating Income grew 7.9% in 2022, followed by
2.7% in 2023, amongst the highest within the peer group
In addition to operational improvements, management aggressively
strengthened the Company’s balance sheet by:
- Amending and extending the Company’s $515 million credit
facility, ensuring that the bulk of the Company maturities extended
to 2027 and beyond
- Obtaining the Company’s first investment grade credit
rating
- Utilizing earnings growth and free cash flow to rapidly improve
the Company’s Debt/EBITDAre ratio from 10.2x (2020) to 7.8x
(2023)
At the beginning of 2022, Whitestone also was saddled with an
investment in Pillarstone Capital REIT Operating Partnership, an
entity controlled by our former CEO that was riddled with conflict
and dilutive to Whitestone shareholders. The new management team
immediately moved to exit this troubled investment. Our multiple
litigation wins include a favorable court ruling, which has
resulted in a multi-million dollar damage award. We are currently
in the process of collecting on that award.
SINCE OUR CEO CHANGE, WHITESTONE REIT HAS
A TRACK RECORD OF SUPERIOR PERFORMANCE
Total Shareholder Returns v MSCI US REIT
Index
Source: FactSet as of March 26, 2024.Note: Total returns include
the reinvestment of dividends on the ex-date.(1) RMS represents the
total return performance of the MSCI US REIT Index.
Total Shareholder Returns v Peers
Source: FactSet as of March 26, 2024.Note: Total returns include
the reinvestment of dividends on the ex-date.(1) PECO began trading
on the NASDAQ on July 15, 2021.(2) RMS represents the total return
performance of the MSCI US REIT Index.(3) IVT began trading on the
NYSE on October 12, 2021.
OUR STRONG, THOUGHTFULLY REFRESHED BOARD
HAS OVERSEEN A STRATEGY DRIVING SUSTAINABLE VALUE
The Whitestone Board of Trustees brings strong real estate,
capital markets, legal, financial and investor relations
experience. The majority of the Trustees’ real estate experience is
specific to Whitestone’s markets, which is vital to understanding
ongoing investments and Company operations. All of our board
members have met with shareholders and are committed to translating
shareholder feedback into shareholder value.
The board has undergone significant refreshment with 3 of 6
trustees added over the past 2 years. Each of our Board nominees
are members added over the last 7 years. This refreshment has:
- Achieved a balance of deep institutional knowledge, diversity
and fresh perspectives that complement our long term growth
strategy
- Created the right mix of relevant expertise and experience to
drive Whitestone forward
Whitestone’s independent board members also have a track record
of taking action to protect shareholders, reflected by recent
corporate governance and management changes and naming David
Holeman as CEO in January 2022.
Most importantly, the Board is overseeing a strategy that is
driving value and producing results.
MAKE NO MISTAKE, EREZ’S CAMPAIGN IS
DETRIMENTAL TO ALL SHAREHOLDERS
As previously mentioned, Erez’s mission seems to
be to establish Bruce Schanzer’s credibility in the REIT activism
arena and use Whitestone REIT as proof-of-concept. To date, Erez
has accumulated approximately 1% of our shares outstanding and is
seeking to deploy its one tactic on all shareholders. Erez’s single
purpose is to sell the Company – an ill-advised and potentially
value destructive action against the current macro backdrop.
In short, Erez’s founder, Mr. Bruce Schanzer,
only has one page in his playbook from his days at CEO of Cedar
Realty Trust. Through numerous communications (including his
initial letter to us), Erez offered no concrete, actionable,
outside-in strategies to deliver value to Whitestone shareholders
other than advocating for a sale or liquidation of the Company.
Mr. Schanzer has stated he has no intention of considering
differences in current market conditions, interest rates, valuation
levels, transaction activity and debt financing that are
dramatically different versus when the Cedar transaction was
launched in late 2021 and signed in early 2022.
The Whitestone Board reviews all avenues to
drive shareholder value. Erez seems detached from the reality of
2024: with interest rates at multi-year highs, a slow transaction
market and a wide bid-ask spread between buyers and sellers. To set
the record straight, we carefully evaluate and consider all offers
for our Company and are committed to our fiduciary duties to
maximize shareholder value. But we do question why Erez is so
fixated on effecting an immediate sale or monetization of assets
under sub-optimal market conditions and chooses to completely
ignore the embedded upside within our portfolio.
THE CHOICE IS CLEAR, WHITESTONE REIT HAS
THE RIGHT TEAM AND PLAN TO DRIVE SHAREHOLDER VALUE
Whitestone has led the MSCI US REIT index with over 30%
total shareholder return since the management change in January
2022. This performance has been driven by outstanding operational
results:
- Occupancy up 290 basis points over two years to a record
94.2%
- Straight line leasing spreads in excess of 17% for seven
consecutive quarters
- Strong Same Store Net Operating Income
Whitestone has a laser-focused strategy that is clearly working.
Your vote is critical to ensure the Company’s momentum is not
interrupted and shareholder value destroyed.
Vote on the WHITE proxy card for Whitestone’s proposals:
- Elect all 6 of our trustee nominees
- Approve Say on Pay
- Ratify Auditors
Sincerely,
The Whitestone Board of
Trustees:
David T. Taylor Nandita V. Berry Julia B.
Buthman Amy S. Feng David K. Holeman Jeffrey A. Jones
About Whitestone REIT
Whitestone REIT (NYSE: WSR) is a community-centered real estate
investment trust (REIT) that acquires, owns, operates, and develops
open-air, retail centers located in some of the fastest growing
markets in the country: Phoenix, Austin, Dallas-Fort Worth, Houston
and San Antonio.
Our centers are convenience focused: merchandised with a mix of
service-oriented tenants providing food (restaurants and grocers),
self-care (health and fitness), services (financial and logistics),
education and entertainment to the surrounding communities. The
Company believes its strong community connections and deep tenant
relationships are key to the success of its current centers and its
acquisition strategy. For additional information, please visit
www.whitestonereit.com.
Important Additional Information and Where to Find
It
Whitestone REIT has filed a definitive proxy statement on
Schedule 14A (the “2024 Proxy Statement”) and a WHITE proxy card
with the U.S. Securities and Exchange Commission (the “SEC”) in
connection with the solicitation of proxies for its 2024 Annual
Meeting of Shareholders (the “2024 Annual Meeting”). SHAREHOLDERS
ARE STRONGLY ENCOURAGED TO READ THE 2024 PROXY STATEMENT (INCLUDING
ANY AMENDMENTS OR SUPPLEMENTS THERETO), THE WHITE PROXY CARD, AND
ANY OTHER DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Shareholders may
obtain a free copy of the 2024 Proxy Statement, any amendments or
supplements to the 2024 Proxy Statement and other documents that
the Company files with the SEC from the SEC’s website at
www.sec.gov or the Company’s website at
https://ir.whitestonereit.com/corporate-profile/default.aspx as
soon as reasonably practicable after such materials are
electronically filed with, or furnished to, the SEC.
Certain Information Regarding Participants in
Solicitation
Whitestone REIT, its trustees and certain of its executive
officers may be deemed to be participants in the solicitation of
proxies from Company shareholders in connection with the matters to
be considered at the 2024 Annual Meeting Information regarding the
direct and indirect interests, by security holdings or otherwise,
of the persons who may, under the rules of the SEC, be considered
participants in the solicitation of shareholders in connection with
the 2024 Annual Meeting is included in the 2024 Proxy Statement of
the, which was filed with the SEC on April 4, 2024. To the extent
securities holdings by the Company’s trustees and executive
officers as reported in the 2024 Proxy Statement have changed, such
changes have been or will be reflected on Statements of Change in
Ownership on Forms 3, 4 or 5 filed with the SEC, which can also be
found through the Company’s website
(https://ir.whitestonereit.com/corporate-profile/default.aspx) in
the section “Investor Relations” or through the SEC’s website.
These documents are available free of charge as described
above.
Forward-Looking Statements
This Report contains forward-looking statements within the
meaning of the federal securities laws, including discussion and
analysis of our financial condition and results of operations,
statements related to our expectations regarding the performance of
our business, and other matters. These forward-looking statements
are not historical facts but are the intent, belief or current
expectations of our management based on its knowledge and
understanding of our business and industry. Forward-looking
statements are typically identified by the use of terms such as
“may,” “will,” “should,” “potential,” “predicts,” “anticipates,”
“expects,” “intends,” “plans,” “believes,” “seeks,” “estimates” or
the negative of such terms and variations of these words and
similar expressions, although not all forward-looking statements
include these words. These statements are not guarantees of future
performance and are subject to risks, uncertainties and other
factors, some of which are beyond our control, are difficult to
predict and could cause actual results to differ materially from
those expressed or forecasted in the forward-looking
statements.
Factors that could cause actual results to differ materially
from any forward-looking statements made in this Report include:
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; uncertainties related to the
national economy, the real estate industry in general and in our
specific markets; legislative or regulatory changes, including
changes to laws governing REITs; adverse economic or real estate
developments or conditions in Texas or Arizona, Houston and Phoenix
in particular, including the potential impact of public health
emergencies, such as COVID-19, on our tenants’ ability to pay their
rent, which could result in bad debt allowances or straight-line
rent reserve adjustments; increases in interest rates, including as
a result of inflation operating costs or general and
administrative expenses; our current geographic concentration in
the Houston and Phoenix metropolitan area makes us susceptible to
local economic downturns and natural disasters, such as floods and
hurricanes, which may increase as a result of climate change,
increasing focus by stakeholders on environmental, social, and
governance matters, financial institution
disruption; availability and terms of capital and financing,
both to fund our operations and to refinance our indebtedness as it
matures; decreases in rental rates or increases in vacancy rates;
harm to our reputation, ability to do business and results of
operations as a result of improper conduct by our employees, agents
or business partners; litigation risks; lease-up risks, including
leasing risks arising from exclusivity and consent provisions in
leases with significant tenants; our inability to renew tenant
leases or obtain new tenant leases upon the expiration of existing
leases; risks related to generative artificial intelligence tools
and language models, along with the potential interpretations and
conclusions they might make regarding our business and prospects,
particularly concerning the spread of misinformation; our inability
to generate sufficient cash flows due to market conditions,
competition, uninsured losses, changes in tax or other applicable
laws; geopolitical conflicts, such as the ongoing conflict between
Russia and Ukraine, the conflict in the Gaza Strip and unrest in
the Middle East; the need to fund tenant improvements or other
capital expenditures out of operating cash flow; the extent to
which our estimates regarding Pillarstone REIT Operating
Partnership LP's financial condition and results of operations
differ from actual results; and the risk that we are unable to
raise capital for working capital, acquisitions or other uses on
attractive terms or at all 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 EBITDAre, FFO, NOI and net debt.
Following are explanations and reconciliations of these metrics to
their most comparable GAAP metric.
EBITDAre: The National Association of Real Estate Investment
Trusts (“NAREIT”) defines EBITDAre as net income computed in
accordance with GAAP, plus interest expense, income tax expense,
depreciation and amortization and impairment write-downs of
depreciable property and of investments in unconsolidated
affiliates caused by a decrease in value of depreciable property in
the affiliate, plus or minus losses and gains on the disposition of
depreciable property, including losses/gains on change in control
and adjustments to reflect the entity’s share of EBITDAre of the
unconsolidated affiliates and consolidated affiliates with
non-controlling interests. The Company calculates EBITDAre in a
manner consistent with the NAREIT definition. Management believes
that EBITDAre represents a supplemental non-GAAP performance
measure that provides investors with a relevant basis for comparing
REITs. There can be no assurance the EBITDAre as presented by the
Company is comparable to similarly titled measures of other REITs.
EBITDAre should not be considered as an alternative to net
income or other measurements under GAAP as indicators of operating
performance or to cash flows from operating, investing or financing
activities as measures of liquidity. EBITDAre does not reflect
working capital changes, cash expenditures for capital improvements
or principal payments on indebtedness.
FFO: Funds From Operations: The National Association of Real
Estate Investment Trusts (“NAREIT”) defines FFO as 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. We calculate FFO in a manner consistent with
the NAREIT definition and also include adjustments for our
unconsolidated real estate partnership.
Core Funds from Operations (“Core FFO”) is a non-GAAP measure.
From time to time, we report or provide guidance with respect
to “Core FFO” which removes the impact of certain
non-recurring and non-operating transactions or other items we do
not consider to be representative of our core operating results
including, without limitation, default interest on debt of real
estate partnership, extinguishment of debt cost, gains or losses
associated with litigation involving the Company that is not in the
normal course of business, and proxy contest professional
fees.
Management uses FFO and Core FFO as a supplemental measure to
conduct and evaluate our business because there are certain
limitations associated with using GAAP net income (loss) alone as
the primary measure of our operating performance. Historical cost
accounting for real estate assets in accordance with GAAP
implicitly assumes that the value of real estate assets diminishes
predictably over time. Because real estate values instead have
historically risen or fallen with market conditions, management
believes that the presentation of operating results for real estate
companies that use historical cost accounting is insufficient by
itself. In addition, securities analysts, investors and other
interested parties use FFO and Core FFO as the primary metric
for comparing the relative performance of equity REITs.
FFO and Core FFO should not be considered as an alternative to
net income or other measurements under GAAP, as an indicator of our
operating performance or to cash flows from operating, investing or
financing activities as a measure of liquidity. FFO and Core
FFO do not reflect working capital changes, cash expenditures for
capital improvements or principal payments on indebtedness.
Although our calculation of FFO is consistent with that of
NAREIT, there can be no assurance that FFO and Core FFO
presented by us is comparable to similarly titled measures of other
REITs.
NOI: Net Operating Income: Management believes that NOI is
a useful measure of our property operating performance. We define
NOI as operating revenues (rental and other revenues) less property
and related expenses (property operation and maintenance and real
estate taxes). Other REITs may use different methodologies for
calculating NOI and, accordingly, our NOI may not be comparable to
other REITs. Because NOI excludes general and administrative
expenses, depreciation and amortization, equity or deficit in
earnings of real estate partnership, interest expense, interest,
dividend and other investment income, provision for income taxes,
gain on sale of property from discontinued
operations, management fee (net of related expenses)
and gain or loss on sale or disposition of assets, and
includes NOI of real estate partnership (pro rata) and net
income attributable to noncontrolling interest, 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. We use NOI to evaluate our operating performance
since NOI allows us to evaluate the impact that factors such as
occupancy levels, lease structure, lease rates and tenant base have
on our results, margins and returns. In addition, management
believes that NOI provides useful information to the investment
community about our 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 our
overall financial performance since it does not reflect the level
of capital expenditure and leasing costs necessary to maintain the
operating performance of our properties, including general and
administrative expenses, depreciation and amortization, equity or
deficit in earnings of real estate partnership, interest expense,
interest, dividend and other investment income, provision for
income taxes, gain on sale of property from discontinued
operations, management fee (net of related expenses) and gain or
loss on sale or disposition of assets.
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 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.
Net debt: We present net debt, which we define as total debt net
of insurance financing less cash plus our proportional share
of net debt of real estate partnership, and net debt to pro forma
EBITDAre, which we define as net debt divided by EBITDAre because
we believe they are helpful as supplemental measures in assessing
our ability to service our financing obligations and in evaluating
balance sheet leverage against that of other REITs. However, net
debt and net debt to pro forma EBITDAre should not be viewed as a
stand-alone measure of our overall liquidity and leverage. In
addition, other REITs may use different methodologies for
calculating net debt and net debt to pro forma EBITDAre, and
accordingly our net debt and net debt to pro forma EBITDAre may not
be comparable to that of other REITs.
Whitestone REIT and Subsidiaries |
RECONCILIATION OF NON-GAAP MEASURES |
Initial Full Year Guidance for 2024 |
(in thousands, except per share and per unit
data) |
|
|
|
|
Projected Range Full Year 2024 |
|
Low |
High |
FFO (NAREIT) and Core
FFO per diluted share and OP unit |
|
|
|
|
|
Net income attributable to Whitestone REIT |
$ |
16,600 |
|
$ |
19,600 |
|
Adjustments to reconcile to
FFO (NAREIT) |
|
|
Depreciation and amortization of real estate assets |
|
34,252 |
|
|
34,252 |
|
Depreciation and amortization of real estate assets of real estate
partnership (pro rata) |
|
133 |
|
|
133 |
|
FFO (NAREIT) |
$ |
50,985 |
|
$ |
53,985 |
|
Adjustments to reconcile to
Core FFO |
|
|
Adjustments |
|
— |
|
|
— |
|
Core FFO |
$ |
50,985 |
|
$ |
53,985 |
|
|
|
|
Dilutive shares |
|
51,262 |
|
|
51,262 |
|
OP Units |
|
695 |
|
|
695 |
|
Dilutive share and OP
Units |
|
51,957 |
|
|
51,957 |
|
|
|
|
Net income attributable to
Whitestone REIT per diluted share |
$ |
0.32 |
|
$ |
0.38 |
|
FFO (NAREIT) per diluted share
and OP Unit |
$ |
0.98 |
|
$ |
1.04 |
|
|
|
|
Net income attributable to
Whitestone REIT per diluted share |
$ |
0.32 |
|
$ |
0.38 |
|
Core FFO per diluted share and
OP Unit |
$ |
0.98 |
|
$ |
1.04 |
|
Whitestone REIT and Subsidiaries |
RECONCILIATION OF NON-GAAP MEASURES |
(continued) |
(in thousands) |
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
2023 |
|
|
|
2022 |
|
PROPERTY NET OPERATING INCOME |
|
|
|
|
Net
income attributable to Whitestone REIT |
|
$ |
19,180 |
|
|
$ |
35,270 |
|
General and administrative expenses |
|
|
20,653 |
|
|
|
18,066 |
|
Depreciation and amortization |
|
|
32,966 |
|
|
|
31,707 |
|
(Equity) deficit in earnings of real estate partnership (1) |
|
|
3,155 |
|
|
|
(239 |
) |
Interest expense |
|
|
32,866 |
|
|
|
27,193 |
|
Interest, dividend and other investment income |
|
|
(51 |
) |
|
|
(65 |
) |
Provision for income taxes |
|
|
450 |
|
|
|
422 |
|
(Gain) loss on sale of properties, net |
|
|
(9,006 |
) |
|
|
(16,950 |
) |
Management fee, net of related expenses |
|
|
16 |
|
|
|
112 |
|
Loss on disposal of assets, net |
|
|
522 |
|
|
|
192 |
|
NOI of real estate partnership (pro rata)(1) |
|
|
2,553 |
|
|
|
3,023 |
|
Net income attributable to noncontrolling interests |
|
|
270 |
|
|
|
530 |
|
NOI |
|
$ |
103,574 |
|
|
$ |
99,261 |
|
Non-Same Store NOI (2) |
|
|
(4,370 |
) |
|
|
(3,322 |
) |
NOI of real estate partnership (pro rata) (1) |
|
|
(2,553 |
) |
|
|
(3,023 |
) |
NOI less Non-Same Store NOI and NOI of real estate
partnership (pro rata) |
|
|
96,651 |
|
|
|
92,916 |
|
Same Store straight-line rent adjustments |
|
|
(2,284 |
) |
|
|
(1,466 |
) |
Same Store amortization of above/below market rents |
|
|
(862 |
) |
|
|
(933 |
) |
Same Store lease termination fees |
|
|
(698 |
) |
|
|
(135 |
) |
Same Store NOI (3) |
|
$ |
92,807 |
|
|
$ |
90,382 |
|
Whitestone REIT and Subsidiaries |
RECONCILIATION OF NON-GAAP MEASURES |
(continued) |
(in thousands) |
|
Year Ended December 31, |
|
|
2023 |
|
|
|
2020 |
|
EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND
AMORTIZATION FOR REAL ESTATE (EBITDAre) |
|
|
|
|
Net
income attributable to Whitestone REIT |
$ |
19,180 |
|
|
$ |
6,034 |
|
Depreciation and amortization |
|
32,966 |
|
|
|
28,303 |
|
Interest expense |
|
32,866 |
|
|
|
25,770 |
|
Provision for income taxes |
|
450 |
|
|
|
379 |
|
Net income attributable to noncontrolling interests |
|
270 |
|
|
|
117 |
|
(Equity) deficit in earnings of real estate partnership (1) |
|
3,155 |
|
|
|
(921 |
) |
EBITDAre adjustments for real estate partnership (1) |
|
617 |
|
|
|
3,484 |
|
Loss (gain) loss on sale or disposal of assets, net |
|
(8,484 |
) |
|
|
364 |
|
Gain on loan forgiveness |
|
— |
|
|
|
(1,734 |
) |
EBITDAre |
|
81,020 |
|
|
|
61,796 |
|
|
|
|
|
|
Year Ended December 31, |
Debt/EBITDAre Ratio |
|
2023 |
|
|
|
2020 |
|
Outstanding debt |
$ |
640,549 |
|
|
$ |
645,163 |
|
Less: Cash |
|
(4,572 |
) |
|
|
(25,777 |
) |
Deposit due to real estate partnership debt default |
|
(13,633 |
) |
|
|
- |
|
Add: Proportional share of net debt of unconsolidated real estate
partnership (1) |
|
8,685 |
|
|
|
8,912 |
|
Total Net Debt |
$ |
631,029 |
|
|
$ |
628,298 |
|
|
|
|
|
EBITDAre |
$ |
81,020 |
|
|
$ |
61,796 |
|
|
|
|
|
Ratio of debt to pro forma EBITDAre |
|
7.8 |
|
|
|
10.2 |
|
(1) We rely on reporting provided to us by our third-party
partners for financial information regarding the Company's
investment in Pillarstone OP. Because Pillarstone OP financial
statements as of December 31, 2023 and 2022 have not been made
available to us, we have estimated proportional share of net deb
based on the information available to us at the time.
Investor and Media Contact:
David MordyDirector of Investor RelationsWhitestone REIT(713)
435-2219ir@whitestonereit.com
Photos accompanying this announcement are available at:
https://www.globenewswire.com/NewsRoom/AttachmentNg/be5fbb20-d9af-476a-86cf-22a945ed1e44
https://www.globenewswire.com/NewsRoom/AttachmentNg/68364c3c-4fc0-4b3e-a041-b69e81ffbac8
https://www.globenewswire.com/NewsRoom/AttachmentNg/c90fbed0-f978-47e9-9de2-feb6358e28c3
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