Whitestone REIT - FORM 8-K - EX-99.2 - EXHIBIT 99.2

Attached files

file	filename
8-K - FORM 8-K - Whitestone REIT	wsr8-kxearningsrelease2012.htm
EX-99.1 - EXHIBIT 99.1 - Whitestone REIT	exhibit991pressreleaseofwh.htm



TABLE OF CONTENTS

	Page

Corporate Profile	1
Second Quarter 2012 Earnings Release	2
Financial Results
Consolidated Balance Sheets	6
Consolidated Statements of Operations and Comprehensive Income	7
Consolidated Statements of Cash Flows	9
Reconciliation of Non-GAAP Measures	10
Other Financial Information	12
Market Capitalization and Selected Ratios	13
Summary of Outstanding Debt & Debt Maturities	14
Occupancy Summary	15
Summary of Occupancy and Top Tenants	15
Summary of Leasing Activity	16
Lease Expirations	20
Property Details	21

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CORPORATE PROFILE

NYSE: WSR	Whitestone REIT (NYSE: WSR) is a fully integrated real estate investment trust that owns,
Common Shares	operates and redevelops Community Centered Properties^TM, which are visibly located properties in
	established or developing, culturally diverse neighborhoods. As of June 30, 2012, we owned
	46 Community Centered Properties^TM with approximately 3.6 million square feet of gross leasable area, located in five of the top markets in the United States in terms of population growth: Houston,
46 Community Centers	Dallas, San Antonio, Phoenix and Chicago. Headquartered in Houston, Texas, we were founded
3.6 Million Sq. Ft. of GLA	in 1998.
963 Tenants
	We focus on value-creation in our properties, as we market, lease and manage our properties. We
5 Top Growth Markets	invest in properties that are or can become Community Centered Properties^TM from which our
Houston	tenants deliver needed services to the surrounding community. We focus on niche properties with
Dallas	smaller rental spaces that present opportunities for attractive returns.
San Antonio
Phoenix	Our strategic efforts target entrepreneurial service-oriented tenants at each property who provide
Chicago	services to their respective surrounding communities. Operations include an internal management
	structure, providing cost-effective services to locally-oriented smaller space tenants. Multi-cultural
Fiscal Year End	community focus sets us apart from traditional commercial real estate operators. We value diversity
12/31	on our team and maintain in-house leasing, property management, marketing, construction and
	maintenance departments with culturally diverse and multi-lingual associates who understand the
Common Shares &	particular needs of our tenants and neighborhoods.
Units Outstanding:
Common Shares: 12.0 Million*	We have a diverse tenant base concentrated on service offerings such as medical,
Operating Partnership Units:	educational and casual dining. These tenants tend to occupy smaller spaces (less than
0.8 Million	3,000 square feet) and, as of June 30, 2012, provided a 60% premium rental rate
	compared to our larger space tenants. The largest of our 963 tenants comprises less
	than 2.0% of our revenues.

Distribution (per share / unit):	Investor Relations:
Quarter $0.2850	Whitestone REIT
Annualized $1.14	Anne I. Gregory, Vice President, Investor Relations & Marketing
Dividend Yield 8.4%**	2600 South Gessner Suite 500, Houston, Texas 77036
	713.435.2221 email: ir@whitestonereit.com		website: www.whitestonereit.com
Board of Trustees:
James C. Mastandrea	ICR Inc. - Brad Cohen 203.682.8211
Daryl J. Carter
Daniel G. DeVos	Analyst Coverage:
Donald F. Keating	BMO Capital Markets Corp.	J.J.B. Hilliard, W.L. Lyons, LLC	JMP Securities	Wunderlich Securities, Inc.
Jack L. Mahaffey	Paul Adornato, CFA	Carol L. Kemple	Mitch Germain	Merril Ross
	212.885.4170	502.588.1839	212.906.3546	703.669.9255
* As of August 2, 2012	Paul.Adornato@bmo.com	ckemple@hilliard.com	mgermain@jmpsecurities.com	mross@wundernet.com

				Ladenburg Thalmann & Co. Inc
** Based on common share price				Jeffrey S. Langbaum
of $13.65 as of close of market on				212.409.2056
August 2, 2012				jlangbaum@ladenburg.com

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PRESS RELEASE

Contact Whitestone REIT:

Anne Gregory, Vice President Marketing & Investor Relations

(713) 435 2221 ir@whitestonereit.com

WHITESTONE REIT ANNOUNCES OPERATING RESULTS FOR THE SECOND QUARTER 2012

Second Quarter Highlights (Year-Over-Year)


•	Total Portfolio Occupancy grew 6% to 87%


•	Total Operating Portfolio Occupancy grew 3% to 87%


•	Property net operating income increased 35% to $6.7 million


•	FFO-Core increased 45% to $2.9 million


•	EBITDA increased 53% to $4.9 million


•	Net income increased $627,000 to $431,000

Houston, Texas, August 6, 2012 - Whitestone REIT (NYSE: WSR - “Whitestone” or the “Company”), a fully integrated real estate company that owns, operates and re-develops Community Centered Properties^TM, which are visibly located in established or developing culturally diverse neighborhoods, announced its financial results for the second quarter of 2012.

"We continue to focus on our value-add internal growth initiatives, which include re-developing, re-positioning, and re-leasing our core properties, and ended the quarter by increasing occupancy to 87%, the highest it has been since our August 2010 initial public offering, up 6% versus the same reporting period a year ago. We expect our increased occupancy to lead to increased revenue, NOI and FFO over the balance of the year. We are pleased with our leasing results and operating strategy, which confirms the effectiveness of our Community Center Property focus on small service based tenants," said James C. Mastandrea, Whitestone's Chairman and Chief Executive Officer. "We also continue our external growth strategy to acquire value-add properties in markets with strong demographics. We closed on one acquisition of $6.4 million during the quarter, and have approximately $40 million of additional communities under contract that are expected to close. Our acquisitions pipeline, in addition to these properties remains substantial, and includes: properties in foreclosure; under distressed financial and operating pressure; and potential tenant in common exchanges for operating partnership units. These properties meet our criteria of having cash flow with a value-add component, and are each located in economically vibrant, resilient, and culturally diverse neighborhoods."

Highlights: Second Quarter 2012 Compared to Second Quarter 2011


•	Net income attributable to Whitestone REIT increased $627,000 to $431,000, or $0.04 per diluted common share, compared to a loss of $196,000 or $0.02 per diluted common share for the same period in 2011.


•	Funds from Operations ("FFO") increased 69% to $2.7 million, or $0.22 per diluted common share and operating partnership unit ("OP unit"), as compared to $1.6 million or $0.15 per diluted common share and OP unit for the second quarter 2011.


•	Funds from Operations-Core ("FFO-Core") increased 45% to $2.9 million, or $0.23 per diluted common share and OP unit, as compared to $2.0 million or $0.20 per diluted common share and OP unit for the second quarter 2011.


•	Property net operating income (“NOI”) increased 35% to $6.7 million as compared to $5.0 million for the same period in 2011. The increase of $1.7 million is primarily attributable to NOI of new acquisitions.


•	The Company declared a quarterly cash distribution of $0.285 per common share and OP unit, which was paid in three equal installments of $0.095 in April, May and June 2012. In May 2012, the Company also declared its second quarter cash distribution of $0.285 per common share and OP unit, which has been paid or will be paid in three equal installments of $0.095 in July, August and September 2012.

Second Quarter 2012 Leasing Highlights

The Company's total property occupancy increased 6% to 87% as compared to 81% at the same period in 2011. Total property occupancy includes properties under redevelopment, undergoing significant retenanting and recent acquisitions. Operating

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portfolio occupancy rate increased to 87% from 84% at the same period 2011. The Company defines Operating portfolio occupancy as physical occupancy in all properties, excluding (i) new acquisitions through the earlier of attainment of 90% occupancy or 18 months of ownership and (ii) properties that are undergoing significant redevelopment or re-tenanting.

The Company signed 92 new and renewal leases representing 190,000 square feet during the second quarter of 2012, primarily with service oriented entrepreneurial tenants that required less than 3,000 square feet in multi-cultural neighborhoods, which drives premium rents. A summary of leasing activity is shown below:


•	An 18% increase in total number of tenants to 963 from 813 for the same period 2011;


•	An increase of 19% in the number of new and renewal leases signed: 92 in the second quarter of 2012 versus 77 in the same period of 2011; and


•	Signed 190,000 square feet in new and renewal leases, with an average size of 2,060 square feet as compared to a total of 266,000 square feet and average size of 3,458 square feet in the same period of 2011.

Community Centered Properties^TM Portfolio Statistics

As of June 30, 2012, the Company owned 46 Community Centered Properties^TM with approximately 3.6 million square feet of gross leasable area, including two development land parcels, located in five of the top markets in the United States in terms of population growth: Houston, Dallas, San Antonio, Phoenix and Chicago.

The Company's strategic efforts target entrepreneurial service oriented tenants that target the neighborhoods within three to five miles from each Community Centered Property^TM. These tenants tend to occupy smaller spaces (less than 3,000 square feet) and, as of June 30, 2012, provided a 60% premium rental rate compared to the Company's larger space tenants. The Company currently services 963 tenants throughout its portfolio. No single tenant accounted for more than 1.5% of the Company's annualized base rental revenues as of June 30, 2012. The tenant base mix is diversified to Drive Traffic and Drive Value^TMwith service offerings concentrated in medical, educational, casual dining and convenience services.

Balance Sheet

The Company owned 20 properties unencumbered by debt as of June 30 2012, with an undepreciated cost basis of $121 million. The total undepreciated values of the Company's real estate assets and real estate indebtedness were $305 million and $140 million, respectively, as of June 30, 2012. As of June 30, 2012, 65% of the Company's debt was fixed-rate and the Company's weighted average interest rate for the quarter was 5.2%.

On February 27, 2012, Whitestone closed on a three-year $125 million unsecured revolving credit facility to replace an existing $20 million facility with Bank of Montreal. The Company plans to use the new facility for general corporate purposes, primarily for acquisitions and redevelopment of existing properties in its portfolio. BMO Capital Markets served as the Sole Lead Arranger and Sole Book Runner. Bank of Montreal also serves as the Administrative Agent. U.S. Bank National Association served as Syndication Agent, while Capital One, National Association, and Wells Fargo Bank, National Association served as Co-Documentation Agents. Also included in the lender group is MidFirst Bank. As of June 30, 2012, $101 million was available under the credit facility.

Supplemental Financial Information

Further details regarding Whitestone REIT's results of operations, Community Centers and tenants can be accessed at the Company's website at www.whitestonereit.com.

Webcast and Conference Call

The Company will host a conference call for investors and other interested parties on Monday, August 6, 2012 at 5:00 p.m. (Eastern Time). Interested parties can listen to the call live on the internet through the Investor Relations section of the Company's website, www.whitestonereit.com, using the News/Events - Press Releases tab. The call is also accessible via telephone by dialing 1-(877) 856-1956 for domestic participants or 1-(719) 325-4748 for international participants and entering the passcode 7738411. Listeners should go to the website at least 15 minutes prior to the call to download and install any necessary audio software. Those dialing in should call in at least 10 minutes prior to the start.

The conference call will be recorded and a telephone replay will be available through August 20, 2012, by dialing 1-(877) 870-5176 for domestic participants or 1-(858) 384-5517 for international participants and entering the passcode 7738411. The

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replay of the call will also be available on the Company's website.

The earnings release and supplemental data package will be located in the Investor Relations section of the website on the News/Events Press Releases tab. For those without internet access, the second quarter 2012 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) 435-2221.

About Whitestone REIT

Whitestone REIT (NYSE: WSR) is a fully integrated real estate investment trust that owns, operates and redevelops Community Centered Properties^TM, which are visibly located properties in established or developing culturally diverse neighborhoods. Whitestone focuses on value-creation in its Centers, as it markets, leases and manages its Centers to match tenants with the shared needs of surrounding neighborhoods. Operations are structured for providing cost-effective service to local service-oriented smaller space tenants (less than 3,000 square feet). Whitestone has a diversified tenant base concentrated on service offerings including medical, education, casual dining, and convenience services. The largest of its 963 tenants comprise less than 1.5% of its rental revenues. Headquartered in Houston, Texas and founded in 1998, the Company is internally managed with a portfolio of commercial properties in Texas, Arizona, and Illinois. For additional information about the Company, please visit www.whitestonereit.com. The Investor Relations section of the Company's website has links to SEC filings, news releases, financial reports and investor newsletters.

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"). We intend 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 can generally be identified by our use of forward-looking terminology, such as "may," "will," "expect," "intend," "anticipate," "believe," "continue" or similar words or phrases that are predictions of future events or trends and which do not relate solely to historical matters. Examples of such statements in this press release include, but are not limited to, the strength of the Company's leasing portfolio and lease renewal activities.

The following are some of the 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: the Company's ability to successfully identify and consummate suitable acquisitions; current adverse market and economic conditions; 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 and regulatory changes; 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; and other factors detailed in our most recent Annual Report on Form 10-K, quarterly reports on Form 10-Q and other documents we file with the Securities and Exchange Commission.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. We cannot guarantee the accuracy of any such forward-looking statements contained in this press release, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Non-GAAP Financial Measures

This release contains the supplemental non-GAAP financial measures of FFO, FFO-Core, NOI and EBITDA. Following are definitions and reconciliations of these metrics to their most comparable GAAP metric.

FFO: Management believes that FFO is a useful measure of the Company's operating performance. The Company computes FFO as defined by the National Association of Real Estate Investment Trusts, or NAREIT, which states that FFO should represent net income (loss) available to common shareholders (computed in accordance with GAAP) plus real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated

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partnerships and joint ventures and excluding gains or losses on the sale of operating real estate assets and extraordinary items. In October 2011, NAREIT communicated to its members that the exclusion of impairment writedowns of depreciable real estate is consistent with the definition of FFO, and prior periods should be restated to be consistent with this guidance. As the Company has not had any impairments in the past five years, the Company was not required to restate our FFO for prior periods. 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.

Further, 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. 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.

FFO-Core: Management believes that the computation of FFO in accordance with NAREIT's definition includes certain items that are not indicative of the results provided by the Company's operating portfolio and affect the comparability of the Company's period-over-period performance. These items include, but are not limited to, legal and professional fees, gains and losses on insurance claim settlements and acquisition costs. Therefore, in addition to FFO, management uses FFO-Core, which the Company defines to exclude such items. Management believes that these adjustments are appropriate in determining FFO-Core as they are not indicative of the operating performance of the Company's 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.

NOI: 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). Other REITs may use different methodologies for calculating NOI, and accordingly, the Company's NOI may not be comparable to other REITs. Because NOI excludes general and administrative expenses, depreciation and amortization, involuntary conversion, interest expense, interest income, provision for income taxes and gain or loss on sale or disposition of assets, 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 that 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.

EBITDA: 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) and general and administrative expenses. Other REITs may use different methodologies for calculating EBITDA, and accordingly, the Company's EBITDA may not be comparable to other REITs. 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.

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Whitestone REIT and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)



	June 30, 2012			December 31, 2011
	(unaudited)
ASSETS
Real estate assets, at cost
Property	$	304,517		$	292,360
Accumulated depreciation	(48,999		)	(45,472		)
Total real estate assets	255,518			246,888
Cash and cash equivalents	3,863			5,695
Marketable securities	2,786			5,131
Escrows and acquisition deposits	3,767			4,996
Accrued rents and accounts receivable, net of allowance for doubtful accounts	6,727			6,053
Unamortized lease commissions and loan costs	4,495			3,755
Prepaid expenses and other assets	1,481			975
Total assets	$	278,637		$	273,493
LIABILITIES AND EQUITY
Liabilities:
Notes payable	$	140,051		$	127,890
Accounts payable and accrued expenses	7,034			9,017
Tenants' security deposits	2,393			2,232
Dividends and distributions payable	3,655			3,647
Total liabilities	153,133			142,786
Commitments and contingencies:	—			—
Equity:
Preferred shares, $0.001 par value per share; 50,000,000 shares authorized; none issued and outstanding at June 30, 2012 and December 31, 2011, respectively	—			—
Class A common shares, $0.001 par value per share; 50,000,000 shares authorized; 0 and 2,603,292 issued and outstanding as of June 30, 2012 and December 31, 2011, respectively	—			2
Class B common shares, $0.001 par value per share; 350,000,000 shares authorized; 12,024,821 and 8,834,563 issued and outstanding as of June 30, 2012 and December 31, 2011, respectively	10			8
Additional paid-in capital	164,231			158,127
Accumulated other comprehensive loss	(497		)	(1,119		)
Accumulated deficit	(46,639		)	(41,060		)
Total Whitestone REIT shareholders' equity	117,105			115,958
Noncontrolling interest in subsidiary	8,399			14,749
Total equity	125,504			130,707
Total liabilities and equity	$	278,637		$	273,493

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Whitestone REIT and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(in thousands, except per share data)



	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Property revenues
Rental revenues	$	8,523		$	6,705		$	16,651		$	13,376
Other revenues	2,464			1,365			4,762			2,780
Total property revenues	10,987			8,070			21,413			16,156

Property expenses
Property operation and maintenance	2,759			1,998			5,111			3,952
Real estate taxes	1,503			1,108			2,813			2,128
Total property expenses	4,262			3,106			7,924			6,080

Other expenses (income)
General and administrative	1,863			1,778			3,504			3,242
Depreciation and amortization	2,663			1,976			5,207			3,965
Interest expense	1,734			1,445			3,446			2,847
Interest, dividend and other investment income	(83		)	(55		)	(153		)	(115		)
Total other expense	6,177			5,144			12,004			9,939

Income (loss) before loss on disposal of assets and income taxes	548			(180		)	1,485			137

Provision for income taxes	(70		)	(58		)	(135		)	(111		)
Loss on sale or disposal of assets	(16		)	—			(28		)	(18		)

Net income (loss)	462			(238		)	1,322			8

Less: Net income (loss) attributable to noncontrolling interests	31			(42		)	98			1

Net income (loss) attributable to Whitestone REIT	$	431		$	(196	)	$	1,224		$	7

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Whitestone REIT and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(in thousands, except per share data)



	Three Months Ended June 30,					Six Months Ended June 30,
	2012		2011			2012		2011
Basic and Diluted Earnings (Loss) Per Share:
Net income (loss) attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	0.04	$	(0.02	)	$	0.10	$	—

Weighted average number of common shares outstanding:
Basic	11,746		8,520			11,685		7,008
Diluted	11,754		8,520			11,696		7,008

Distributions declared per common share / OP unit	$	0.2850	$	0.2850		$	0.5700	$	0.5700

Consolidated Statements of Comprehensive Income (Loss)

Net income (loss)	$	462	$	(238	)	$	1,322	$	8

Other comprehensive gain (loss)

Unrealized gain (loss) on available-for-sale marketable securities	33		(209		)	799		(209		)

Comprehensive income (loss)	495		(447		)	2,121		(201		)

Less: Comprehensive income (loss) attributable to noncontrolling interests	30		(78		)	157		(41		)

Comprehensive income (loss) attributable to Whitestone REIT	$	465	$	(369	)	$	1,964	$	(160	)

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Whitestone REIT and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)



	Six Months Ended June 30,
	2012			2011

Cash flows from operating activities:
Net income	$	1,322		$	8
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	4,573			3,736
Amortization of deferred loan costs	634			229
Gain on sale of marketable securities	(32		)	(38		)
Loss on sale or disposal of assets	28			18
Bad debt expense	358			214
Share-based compensation	266			155
Changes in operating assets and liabilities:
Escrows and acquisition deposits	1,229			1,986
Accrued rent and accounts receivable	(1,064		)	(544		)
Unamortized lease commissions	(600		)	(402		)
Prepaid expenses and other assets	298			495
Accounts payable and accrued expenses	(1,917		)	(1,758		)
Tenants' security deposits	161			49
Net cash provided by operating activities	5,256			4,148

Cash flows from investing activities:
Acquisitions of real estate	(6,400		)	(8,650		)
Additions to real estate	(6,465		)	(2,066		)
Investments in marketable securities	(750		)	(10,461		)
Proceeds from sales of marketable securities	3,926			909
Net cash used in investing activities	(9,689		)	(20,268		)

Cash flows from financing activities:
Distributions paid to common shareholders	(6,684		)	(3,737		)
Distributions paid to OP unit holders	(559		)	(1,030		)
Proceeds from issuance of common shares	—			60,066
Payments of exchange offer costs	(306		)	—
Proceeds from notes payable	13,156			2,905
Repayments of notes payable	(1,819		)	(1,540		)
Payments of loan origination costs	(1,187		)	(359		)
Net cash provided by financing activities	2,601			56,305

Net increase (decrease) in cash and cash equivalents	(1,832		)	40,185
Cash and cash equivalents at beginning of period	5,695			17,591
Cash and cash equivalents at end of period	$	3,863		$	57,776

Whitestone REIT and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)



	Six Months Ended June 30,
	2012		2011
Supplemental disclosure of cash flow information:
Cash paid for interest	$	3,375	$	2,838
Cash paid for taxes	$	225	$	215
Non cash investing and financing activities:
Disposal of fully depreciated real estate	$	523	$	21
Financed insurance premiums	780		649
Value of shares issued under dividend reinvestment plan	45		—
Accrued offering costs	28		305
Value of Class B shares exchanged for OP units	6,224		—
Change in fair value of available-for-sale securities	799		(209		)

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Whitestone REIT and Subsidiaries

RECONCILIATION OF NON-GAAP MEASURES

(in thousands, expect per share and per unit data)



	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
FFO AND FFO-CORE
Net income (loss) attributable to Whitestone REIT	$	431		$	(196	)	$	1,224		$	7
Depreciation and amortization of real estate assets	2,254			1,827			4,503			3,677
Loss on disposal of assets	16			—			28			18
Net income (loss) attributable to noncontrolling interests	31			(42		)	98			1
FFO	2,732			1,589			5,853			3,703

Acquisition costs	130			141			$	194		$	142
Legal settlement	—			293			(131		)	356
FFO-Core	$	2,862		$	2,023		$	5,916		$	4,201

FFO PER SHARE AND OP UNIT CALCULATION:
Numerator:
FFO	$	2,732		$	1,589		$	5,853		$	3,703
Distributions paid on unvested restricted common shares	(2		)	(4		)	(6		)	(10		)
FFO excluding amounts attributable to unvested restricted common shares	2,730			1,585			5,847			3,693
FFO-Core excluding amounts attributable to unvested restricted common shares	$	2,860		$	2,019		5,910			4,191

Denominator:
Weighted average number of total common shares - basic	11,746			8,520			11,685			7,008
Weighted average number of total noncontrolling OP units - basic	882			1,815			937			1,815
Weighted average number of total commons shares and noncontrolling OP units - basic	12,628			10,335			12,622			8,823

Effect of dilutive securities:
Unvested restricted shares	8			—			11			—
Weighted average number of total common shares and noncontrolling OP units - dilutive	12,636			10,335			12,633			8,823

FFO per share and unit - basic	$	0.22		$	0.15		$	0.46		$	0.42
FFO per share and unit - diluted	$	0.22		$	0.15		$	0.46		$	0.42

FFO-Core per share and unit - basic	$	0.23		$	0.20		$	0.47		$	0.48
FFO-Core per share and unit - diluted	$	0.23		$	0.20		$	0.47		$	0.48

Table of Contents

Whitestone REIT and Subsidiaries

RECONCILIATION OF NON-GAAP MEASURES

(in thousands, except per share and per unit data)



	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011

PROPERTY NET OPERATING INCOME ("NOI")

Net income (loss) attributable to Whitestone REIT	$	431		$	(196	)	$	1,224		$	7
General and administrative expenses	1,863			1,778			3,504			3,242
Depreciation and amortization	2,663			1,976			5,207			3,965
Interest expense	1,734			1,445			3,446			2,847
Interest, dividend and other investment income	(83		)	(55		)	(153		)	(115		)
Provision for income taxes	70			58			135			111
Loss on disposal of assets	16			—			28			18
Net income (loss) attributable to noncontrolling interests	31			(42		)	98			1
NOI	$	6,725		$	4,964		$	13,489		$	10,076

EARNINGS BEFORE INTEREST, TAX, DEPRECIATION
AND AMORTIZATION ("EBITDA")

Net income (loss) attributable to Whitestone REIT	$	431		$	(196	)	$	1,224		$	7
Depreciation and amortization	2,663			1,976			5,207			3,965
Interest expense	1,734			1,445			3,446			2,847
Provision for income taxes	70			58			135			111
Loss on disposal of assets	16			—			28			18
Net income (loss) attributable to noncontrolling interests	31			(42		)	98			1
EBITDA	$	4,945		$	3,241		$	10,138		$	6,949



	Three Months Ended
	June 30,		March 31,		December 31,		September 30,
	2012		2012		2011		2011
Net income attributable to Whitestone REIT	$	431	$	793	$	556	$	578
Depreciation and amortization	2,663		2,544		2,239		2,161
Interest expense	1,734		1,712		1,451		1,430
Provision for income taxes	70		65		60		54
Loss (gain) on disposal of assets	16		12		129		(1		)
Net income attributable to noncontrolling interests	31		67		94		97
EBITDA	$	4,945	$	5,193	$	4,529	$	4,319

Table of Contents

Whitestone REIT and Subsidiaries OTHER FINANCIAL INFORMATION (in thousands, except number of properties and employees)

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011

Other Financial Information:

Tenant improvements⁽¹⁾	$	353	$	530	$	919	$	1,046
Leasing commissions⁽¹⁾	$	181	$	247	$	385	$	383
Scheduled debt principal payments	$	723	$	618	$	1,417	$	1,222
Straight line rent income (loss)	$	118	$	140	$	47	$	366
Market rent amortization income from acquired leases	$	7	$	14	$	11	$	23
Non-cash share-based compensation expense	$	188	$	77	$	266	$	155
Non-real estate depreciation and amortization	$	36	$	30	$	69	$	59
Amortization of loan fees	$	373	$	119	$	634	$	229
Acquisition costs	$	130	$	141	$	194	$	142
Undepreciated value of unencumbered properties	$	121,147	$	70,982	$	121,147	$	70,982
Number of unencumbered properties	20		14		20		14
Full time employees	56		56		56		56


⁽¹⁾	Does not include first generation costs for tenant improvements and leasing commission costs needed for new acquisitions or redevelopment of a property to bring the property to operating standards for its intended use.

Table of Contents

Whitestone REIT and Subsidiaries

MARKET CAPITALIZATION AND SELECTED RATIOS

(in thousands)



	As of June 30, 2012
MARKET CAPITALIZATION:	Percent of Total Equity		Total Market Capitalization			Percent of Total Market Capitalization
Equity Capitalization:
Common shares outstanding	93.9	%	12,025
Operating partnership units outstanding	6.1	%	786
Total	100.0	%	12,811

Market price of common shares as of
June 30, 2012			$	13.81

Total equity capitalization			176,920			57	%

Debt Capitalization:
Outstanding debt			$	140,051
Less: Cash and cash equivalents			(3,863		)
			136,188			43	%

Total Market Capitalization as of
June 30, 2012			$	313,108		100	%



SELECTED RATIOS: (dollars in thousands)
	Three Months Ended
	June 30,			March 31,			December 31,			September 30,
	2012			2012			2011			2011
INTEREST COVERAGE RATIO
EBITDA/Interest Expense
EBITDA	$	4,945		$	5,193		$	4,529		$	4,319
Interest expense	1,734			1,712			1,451			1,430
Ratio of interest expense to EBITDA	2.9			3.0			3.1			3.0

LEVERAGE RATIO
Debt/Undepreciated Book Value
Undepreciated real estate assets	$	304,517		$	295,184		$	292,360		$	241,488

Outstanding debt	$	140,051		$	134,208		$	127,890		$	102,234
Less: Cash	(3,863		)	(8,288		)	(5,695		)	(32,660		)
Outstanding debt after cash	$	136,188		$	125,920		$	122,195		$	69,574
Ratio of debt to real estate assets	45		%	43		%	42		%	29		%

Table of Contents

Whitestone REIT and Subsidiaries

SUMMARY OF OUTSTANDING DEBT AND DEBT MATURITIES

As of December 31, 2011

(in thousands)

TOTAL OUTSTANDING DEBT

(in thousands)



Description	June 30, 2012		December 31, 2011
Fixed rate notes
$1.4 million 5.00% Note, due 2012	$	1,352	$	1,318
$14.1 million 5.695% Note, due 2013	13,993		14,110
$3.0 million 6.00% Note, due 2021 ⁽¹⁾	2,961		2,978
$10.0 million 6.04% Note, due 2014	9,235		9,326
$1.5 million 6.50% Note, due 2014	1,458		1,471
$11.2 million 6.52% Note, due 2015	10,688		10,763
$21.4 million 6.53% Notes, due 2013	19,200		19,524
$24.5 million 6.56% Note, due 2013	23,370		23,597
$9.9 million 6.63% Notes, due 2014	9,075		9,221
$0.7 million 2.97% Note, due 2012	367		23
Floating rate notes
Unsecured line of credit, LIBOR plus 2.75% to 3.75%, due 2015	24,200		11,000
$26.9 million, LIBOR + 2.86% Note, due 2013	24,152		24,559
	$	140,051	$	127,890


⁽¹⁾	The 6.00% interest rate is fixed through March 30, 2016. On March 31, 2016, the interest rate will be reset to the rate of interest for a five-year balloon note with a thirty year amortization as published by the Federal Home Loan Bank.

SCHEDULE OF DEBT MATURITIES

(in thousands)



Year	Scheduled Amortization Payments		Scheduled Maturities		Total Scheduled Maturities		Percentage of Debt Maturing

2012	$	1,820	$	1,387	$	3,207	2.3	%
2013	2,649		77,677		80,326		57.4	%
2014	312		18,879		19,191		13.7	%
2015	169		34,346		34,515		24.6	%
2016	48		—		48		—	%
2017 and thereafter	239		2,525		2,764		2.0	%
Total	$	5,237	$	134,814	$	140,051	100.0	%

Table of Contents

Whitestone REIT and Subsidiaries SUMMARY OF OCCUPANCY AND TOP TENANTS

	Gross Leasable Area as of	Occupancy as of
Community Center Properties	June 30, 2012	June 30, 2012		March 31, 2012		December 31, 2011		September 30, 2011
Retail	1,649,847	90	%	90	%	90	%	90	%
Office/Flex	1,201,672	89	%	87	%	86	%	86	%
Office	631,841	79	%	79	%	79	%	80	%
Total - Operating Portfolio	3,483,360	87	%	87	%	87	%	86	%
Redevelopment, New Acquisitions ⁽¹⁾	153,478	68	%	51	%	50	%	47	%
Total	3,636,838	87	%	85	%	84	%	84	%


⁽¹⁾	Includes new acquisitions through the earlier of attainment of 90% occupancy or 18 months of ownership, and properties that are undergoing significant redevelopment or re-tenanting.



Tenant Name	Location	Annualized Base Rental Revenue (in thousands)		Percentage of Total Annualized Base Rental Revenues ⁽²⁾		Initial Lease Date	Year Expiring

Sports Authority	San Antonio	$	495	1.4	%	1/1/2004	2015
University of Phoenix	San Antonio	415		1.2	%	10/18/2010	2018
Air Liquide America, L.P.	Dallas	387		1.1	%	8/1/2001	2013
Safeway Stores, Incorporated	Phoenix	344		1.0	%	12/22/2011	2021
X-Ray X-Press Corporation	Houston	280		0.8	%	7/1/1998	2019
Walgreen's #3766	Phoenix	279		0.8	%	8/9/2011	2049
Rock Solid Images	Houston	249		0.7	%	4/1/2004	2012
Eligibility Services	Dallas	249		0.7	%	6/6/2000	2012
Marshall's	Houston	248		0.7	%	5/12/1983	2013
Merrill Corporation	Dallas	248		0.7	%	12/10/2001	2014
Albertson's #979	Phoenix	235		0.7	%	8/9/2011	2022
Compass Insurance	Dallas	222		0.6	%	1/1/2006	2013
River Oaks L-M, Inc.	Houston	217		0.6	%	10/15/1993	2014
Fitness Alliance, LLC	Phoenix	216		0.6	%	8/17/2011	2021
Petsmart, Inc.	San Antonio	199		0.6	%	1/1/2004	2018
		$	4,283	12.2	%


⁽²⁾	Annualized Base Rental Revenues represents the monthly base rent as of June 30, 2012 for each applicable tenant multiplied by 12.

Table of Contents

Whitestone REIT and Subsidiaries SUMMARY OF LEASING ACTIVITY

	Three Month Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
RENEWALS
Number of Leases	42		47		90		90
Total SF ⁽¹⁾	104,189		176,537		181,844		297,636
Average SF	2,481		3,756		2,020		3,307
Total Lease Value	$	5,867,551	$	7,144,537	$	8,713,551	$	9,868,537
NEW LEASES
Number of Leases	50		30		92		67
Total SF ⁽¹⁾	85,376		89,704		166,888		186,297
Average SF	1,708		2,990		1,814		2,781
Total Lease Value	$	3,598,577	$	6,661,244	$	7,582,577	$	9,934,244
TOTAL LEASES
Number of Leases	92		77		182		157
Total SF ⁽¹⁾	189,565		266,241		348,732		483,933
Average SF	2,060		3,458		1,916		3,082
Total Lease Value	$	9,466,128	$	13,805,781	$	16,296,128	$	19,802,781


⁽¹⁾	Represents the square footage as the result of new, renewal, expansion and contraction leases.

Table of Contents

Whitestone REIT and Subsidiaries SUMMARY OF LEASING ACTIVITY

Type	Number of Leases Signed	Lease Value Signed		GLA Signed	Weighted Average Lease Term ⁽²⁾	TI and Incentives ⁽³⁾		TI and Incentives per SF		Contractual Rent Per Sq. Ft. ⁽⁴⁾		Prior Contractual Rent Per Sq. Ft. ⁽⁵⁾			Annual Increase (Decrease) in Contractual Rent			Cash Basis Increase (Decrease) Over Prior Rent		Annual Increase (Decrease) in Straight-lined Rent			Straight-lined Basis Increase (Decrease) Over Prior Rent

Comparable:⁽¹⁾

Comparable Total Leases:
2nd Quarter 2012	54	$	5,900,931	132,857	3.8	$	388,076	$	2.92	$	11.62	$	11.47		$	5,121		1	%	$	79,903		6	%
1st Quarter 2012	55	3,193,832		103,905	2.2	93,657		0.90		10.83		11.31			(49,133		)	(4	)%	15,847			1	%
4th Quarter 2011	48	4,579,194		99,733	3.5	377,372		3.78		12.52		12.84			(25,744		)	(2	)%	147,687			12	%
3rd Quarter 2011	42	1,794,549		72,165	2.6	95,407		1.32		9.64		10.78			(91,856		)	(11	)%	(61,707		)	(5	)%
Total - 12 months	199	$	15,468,506	408,660	3.4	$	954,512	$	2.34	$	11.31	$	11.64		$	(161,612	)	(3	)%	$	181,730		5	%

Comparable New Leases:
2nd Quarter 2012	17	$	1,433,816	35,918	4.1	$	301,248	$	8.39	$	11.07	$	9.85		$	43,851		12	%	$	29,443		9	%
1st Quarter 2012	11	543,891		18,634	3.2	18,444		0.99		9.91		12.36			(45,645		)	(20	)%	(26,157		)	(12	)%
4th Quarter 2011	11	2,019,419		35,866	4.7	282,255		7.87		10.60		10.62			(6,506		)	—	%	112,079			38	%
3rd Quarter 2011	19	1,192,312		39,147	3.0	77,725		1.99		8.53		9.59			(44,416		)	(11	)%	(24,749		)	(6	)%
Total - 12 months	58	$	5,189,438	129,565	3.8	$	679,672	$	5.25	$	10.06	$	10.30		$	(52,716	)	(2	)%	$	90,616		7	%

Comparable Renewal Leases:
2nd Quarter 2012	37	$	4,467,115	96,939	3.6	$	86,828	$	0.90	$	11.82	$	12.06		$	(38,730	)	(2	)%	$	50,460		6	%
1st Quarter 2012	44	2,649,941		85,271	2.0	75,213		0.88		11.03		11.07			(3,488		)	—	%	42,004			5	%
4th Quarter 2011	37	2,559,775		63,867	2.7	95,117		1.49		13.59		14.18			(19,238		)	(4	)%	35,608			2	%
3rd Quarter 2011	23	602,237		33,018	2.1	17,682		0.54		10.95		12.34			(47,440		)	(11	)%	(36,958		)	(5	)%
Total - 12 months	141	$	10,279,068	279,095	3.2	$	274,840	$	0.98	$	11.88	$	12.28	0	$	(108,896	)	(3	)%	$	91,114		3	%

Table of Contents

Whitestone REIT and Subsidiaries SUMMARY OF LEASING ACTIVITY (continued)

Type	Number of Leases Signed	Lease Value Signed		GLA Signed	Weighted Average Lease Term ⁽²⁾	TI and Incentives ⁽³⁾		TI and Incentives per SF		Contractual Rent Per Sq. Ft. ⁽⁴⁾

Non-comparable

Non-Comparable Total Leases:
2nd Quarter 2012	38	$	3,565,197	99,396	3.6	$	509,581	$	5.13	$	10.26
1st Quarter 2012	35	3,636,434		96,600	4.1	492,660		5.10		9.03
4th Quarter 2011	40	2,628,065		127,943	7.7	683,094		5.34		9.11
3rd Quarter 2011	25	3,469,728		144,081	7.2	1,989,773		13.81		8.04
Total - 12 months	138	$	13,299,424	468,020	5.9	$	3,675,108	$	7.85	$	9.00

Non-Comparable New Leases:
2nd Quarter 2012	33	$	2,164,761	69,804	3.1	$	426,724	$	6.11	$	10.13
1st Quarter 2012	31	3,440,224		85,866	4.4	444,899		5.18		9.04
4th Quarter 2011	33	2,344,450		95,993	5.0	505,116		5.26		9.12
3rd Quarter 2011	20	2,490,258		116,625	8.0	1,973,200		16.92		7.77
Total - 12 months	117	$	10,439,693	368,288	5.5	$	3,349,939	$	9.10	$	8.85

Non-Comparable Renewal Leases:
2nd Quarter 2012	5	$	1,400,436	29,592	4.7	$	82,857	$	2.80	$	10.56
1st Quarter 2012	4	196,210		10,734	1.7	47,761		4.45		9.00
4th Quarter 2011	7	283,615		31,950	15.9	177,978		5.57		9.08
3rd Quarter 2011	5	979,470		27,456	3.9	16,573		0.60		9.19
Total - 12 months	21	$	2,859,731	99,732	7.7	$	325,169	$	3.26	$	9.54

Table of Contents

Whitestone REIT and Subsidiaries SUMMARY OF LEASING ACTIVITY (continued)

Type	Number of Leases Signed	Lease Value Signed		GLA Signed	Weighted Average Lease Term ⁽²⁾	TI and Incentives ⁽³⁾		TI and Incentives per SF		Contractual Rent Per Sq. Ft. ⁽⁴⁾

Total

New & Renewal
2nd Quarter 2012	92	$	9,466,128	232,253	3.7	$	897,657	$	3.86	$	11.04
1st Quarter 2012	90	6,830,266		200,505	3.1	586,317		2.92		9.96
4th Quarter 2011	88	7,207,259		227,676	5.8	1,060,466		4.66		10.61
3rd Quarter 2011	67	5,264,277		216,246	5.6	2,085,180		9.64		8.57
Total - 12 months	337	$	28,767,930	876,680	4.7	$	4,629,620	$	5.28	$	10.07

New
2nd Quarter 2012	50	$	3,598,577	105,722	3.4	$	727,972	$	6.89	$	10.45
1st Quarter 2012	42	3,984,115		104,500	4.2	463,343		4.43		9.19
4th Quarter 2011	44	4,363,869		131,859	4.9	787,371		5.97		9.58
3rd Quarter 2011	39	3,682,570		155,772	6.7	2,050,925		13.17		7.96
Total - 12 months	175	$	15,629,131	497,853	5.0	$	4,029,611	$	8.09	$	9.17

Renewal
2nd Quarter 2012	42	$	5,867,551	126,531	3.9	$	169,685	$	1.34	$	11.53
1st Quarter 2012	48	2,846,151		96,005	2.0	122,974		1.28		10.81
4th Quarter 2011	44	2,843,390		95,817	7.1	273,095		2.85		12.09
3rd Quarter 2011	28	1,581,707		60,474	2.9	34,255		0.57		10.15
Total - 12 months	162	$	13,138,799	378,827	4.4	$	600,009	$	1.58	$	11.27


⁽¹⁾	Comparable leases represent leases signed on spaces for which there was a former tenant within the last twelve months and the new or renewal square footage was within 25% of the expired square footage.


⁽²⁾	Weighted average is determined on the basis of square footage.


⁽³⁾	Estimated amount per signed lease. Actual cost of construction may vary. Does not include first generation costs for tenant improvements and leasing commission costs needed for new acquisitions or redevelopment of a property to bring the property to operating standards for its intended use.


⁽⁴⁾	Contractual rent represents contractual minimum rent under the new lease for the first month, excluding concessions.


⁽⁵⁾	Prior contractual rent represents contractual minimum rent under the prior lease for the final month.

Table of Contents

Whitestone REIT LEASE EXPIRATIONS

					Annualized Base Rent
		Gross Leasable Area			as of June 30, 2012
Year	Number of Leases	Square Feet	Percent of Leasable Square Feet		Amount (in thousands)		Percent of Total		Per Square Foot
2012	206	399,460	11.0	%	$	4,981	14.4	%	$	12.47
2013	203	575,995	15.8	%	6,771		19.6	%	11.76
2014	197	581,422	16.0	%	6,417		18.6	%	11.04
2015	126	428,621	11.8	%	4,306		12.5	%	10.05
2016	100	348,846	9.6	%	4,167		12.1	%	11.95
2017	67	238,746	6.6	%	2,511		7.3	%	10.52
2018	17	119,488	3.3	%	1,490		4.3	%	12.47
2019	9	63,326	1.7	%	670		1.9	%	10.58
2020	8	52,845	1.5	%	588		1.7	%	11.13
2021	10	114,983	3.2	%	1,030		3.0	%	8.96
Total	943	2,923,732	80.5	%	$	32,931	95.4	%	$	11.26


⁽¹⁾	Lease expirations table reflects rents in place as of June 30, 2012, and does not include option periods.


⁽²⁾	Annualized Base Rent represents the monthly base rent as of June 30, 2012 for each tenant multiplied by 12.

Table of Contents

Whitestone REIT and Subsidiaries Property Details As of June 30, 2012

Community Name	Location	Year Built/ Renovated	Gross Leasable Area	Percent Occupied at 06/30/2012		Annualized Base Rental Revenue (in thousands) ⁽¹⁾		Average Base Rental Revenue Per Sq. Ft. ⁽²⁾		Average Net Effective Annual Base Rent Per Leased Sq. Ft.⁽³⁾
Retail Communities:
Ahwatukee Plaza	Phoenix	1979	72,650	100	%	$	983	$	13.53	$	13.72
Bellnott Square	Houston	1982	73,930	43	%	307		9.66		9.69
Bissonnet/Beltway	Houston	1978	29,205	100	%	325		11.13		10.85
Centre South	Houston	1974	39,134	79	%	266		8.60		8.47
The Citadel	Phoenix	1985	28,547	70	%	125		6.26		13.96
Holly Knight	Houston	1984	20,015	100	%	332		16.59		16.74
Kempwood Plaza	Houston	1974	101,008	98	%	844		8.53		8.47
Lion Square	Houston	1980	117,592	95	%	938		8.40		9.62
MarketPlace At Central	Phoenix	2000	111,130	48	%	468		8.77		9.00
Pinnacle of Scottsdale	Phoenix	1991	113,108	99	%	2,227		19.89		20.62
Providence	Houston	1980	90,327	99	%	781		8.73		8.11
Shaver	Houston	1978	21,926	98	%	256		11.91		11.68
Shops at Starwood	Dallas	2006	55,385	96	%	1,402		26.37		27.48
South Richey	Houston	1980	69,928	78	%	552		10.12		8.67
Spoerlein Commons	Chicago	1987	41,455	96	%	777		19.52		19.32
SugarPark Plaza	Houston	1974	95,032	100	%	859		9.04		10.30
Sunridge	Houston	1979	49,359	99	%	435		8.90		9.25
Terravita Marketplace	Phoenix	1997	102,733	99	%	1,347		13.24		13.67
Torrey Square	Houston	1983	105,766	97	%	820		7.99		8.04
Town Park	Houston	1978	43,526	100	%	796		18.29		18.06
Webster Point	Houston	1984	26,060	100	%	293		11.24		10.90
Westchase	Houston	1978	49,573	85	%	481		11.42		12.55
Windsor Park	San Antonio	1992	192,458	95	%	1,434		7.84		8.86
			1,649,847	90	%	17,048		11.48		11.95
Office/Flex Communities:
Brookhill	Houston	1979	74,757	76	%	$	233	$	4.10	$	4.05
Corporate Park Northwest	Houston	1981	185,627	77	%	1,531		10.71		10.75
Corporate Park West	Houston	1999	175,665	88	%	1,401		9.06		8.77
Corporate Park Woodland	Houston	2000	99,937	100	%	851		8.52		8.58
Dairy Ashford	Houston	1981	42,902	94	%	224		5.55		5.58
Holly Hall	Houston	1980	90,000	100	%	730		8.11		8.26
Interstate 10	Houston	1980	151,000	97	%	677		4.62		4.96
Main Park	Houston	1982	113,410	81	%	519		5.65		5.69
Plaza Park	Houston	1982	105,530	84	%	764		8.62		8.64
Westbelt Plaza	Houston	1978	65,619	87	%	442		7.74		7.95
Westgate	Houston	1984	97,225	100	%	572		5.88		5.72
			1,201,672	89	%	7,944		7.43		7.45

Table of Contents

Whitestone REIT and Subsidiaries Property Details As of June 30, 2012 (continued)

Community Name	Location	Year Built/ Renovated	Gross Leasable Area	Percent Occupied at 06/30/2012		Annualized Base Rental Revenue (in thousands) ⁽¹⁾		Average Base Rental Revenue Per Sq. Ft. ⁽²⁾		Average Net Effective Annual Base Rent Per Leased Sq. Ft.⁽³⁾
Office Communities:
9101 LBJ Freeway	Dallas	1985	125,874	71	%	$	1,324	$	14.81	$	14.67
Featherwood	Houston	1983	49,760	91	%	931		20.56		18.11
Pima Norte	Phoenix	2007	33,417	18	%	103		17.12		16.79
Royal Crest	Houston	1984	24,900	70	%	219		12.56		12.34
Uptown Tower	Dallas	1982	253,981	82	%	3,708		17.80		17.28
Woodlake Plaza	Houston	1974	106,169	90	%	1,339		14.01		13.04
Zeta Building	Houston	1982	37,740	91	%	571		16.63		16.10
			631,841	79	%	8,195		16.42		15.71

Total - Operating Portfolio			3,483,360	87	%	33,187		10.95		11.07

Desert Canyon	Phoenix	2000	62,533	81	%	569		11.23		11.39
Gilbert Tuscany Village	Phoenix	2009	49,415	44	%	272		12.51		19.91
The Shops at Pinnacle Peak	Phoenix	2000	41,530	76	%	550		17.43		18.95
Total - Development Portfolio			153,478	68	%	1,391		13.33		15.41

Pinnacle Phase II	Phoenix		—	—	%	—		—		—
Shops at Starwood Phase III	Dallas		—	—	%	—		—		—
Total - Property Held For Development ⁽⁴⁾			—	—	%	—		—		—

Grand Totals			3,636,838	87	%	$	34,578	$	10.93	$	11.12

⁽¹⁾

Calculated as the tenant's actual June 30, 2012 base rent (defined as cash base rents including abatements) multiplied by 12. Excludes vacant space as of June 30, 2012. Because annualized base rental revenue is not derived from historical results that were accounted for in accordance with generally accepted accounting principles, historical results differ from the annualized amounts. Total abatements for leases in effect as of June 30, 2012 equaled approximately $94,000 for the month ended June 30, 2012.


⁽²⁾	Calculated as annualized base rent divided by net rentable square feet leased as of June 30, 2012. Excludes vacant space as of June 30, 2012.


⁽³⁾	Represents (i) the contractual base rent for leases in place as of June 30, 2012, calculated on a straight-line basis to reflect changes in rental rates throughout the lease term and amortize free rent periods and abatements, but without regard to tenant improvement allowances and leasing commissions, divided by (ii) square footage under commenced leases as of June 30, 2012.


⁽⁴⁾	As of June 30, 2012, these properties are held for development with no gross leasable area.

Whitestone REIT - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - August 6, 2012

Attached files

Whitestone REIT Reports