Whitestone REIT - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - April 27, 2016

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CORPORATE PROFILE
 
 
 
 
 
 
 
 
 
NYSE: WSR
 
Whitestone REIT (NYSE: WSR) is a fully integrated real estate investment trust that owns,
Common Shares
 
redevelops, repositions, leases, manages and operates value-add Community Centered Properties TM.
 
 
As of March 31, 2016, we owned 69 Community Centered PropertiesTM with approximately
69 Community Centers
 
5.9 million square feet of gross leasable area, located in six of the top markets in the United
5.9 Million Sq. Ft. of gross
 
States in terms of population growth: Austin, Chicago, Dallas-Fort Worth, Houston, Phoenix
leasable area
 
and San Antonio. Headquartered in Houston, Texas, we were founded in 1998.
1,465 Tenants
 
 
 
 
We focus on value creation in our properties, as we market, lease and manage our properties. We
6 Top Growth Markets
 
invest in properties that are or can become Community Centered Properties TM from which our tenants
Austin
 
deliver needed services to the surrounding community. We focus on properties with smaller rental
Chicago
 
spaces that present opportunities for attractive returns.
Dallas-Fort Worth
 
 
Houston
 
Our strategic efforts target entrepreneurial, service-oriented tenants at each property who provide
Phoenix
 
services to their respective surrounding communities. Operations include an internal management
San Antonio
 
structure providing cost-effective services to locally-oriented, smaller space tenants. Multi-cultural
 
 
community focus sets us apart from traditional commercial real estate operators. We value diversity
Fiscal Year End
 
on our team and maintain in-house leasing, property management, marketing, construction and
12/31
 
maintenance departments with culturally diverse and multi-lingual associates who understand the
 
 
particular needs of our tenants and neighborhoods.
Common Shares &
 
 
Units Outstanding*:
 
We have a diverse tenant base concentrated on service offerings such as specialty retail, grocery,
Common Shares: 27.4 Million
 
restaurants and medical, educational and financial services. These tenants tend to occupy smaller spaces
Operating Partnership Units:
 
(less than 3,000 square feet) and, as of March 31, 2016, provided a 47% premium rental rate
     0.5 Million
 
compared to our larger space tenants. The largest of our 1,465 tenants comprised less than 2.6% of our
 
 
annualized base rental revenues for the three months ended March 31, 2016.
 
 
 
 
 
 
 
 
 
 
 
 
Distribution (per share / unit):
 
Investor Relations:
 
 
 
 
Quarter: $ 0.2850
 
Whitestone REIT
 
 
 
 
 
ICR Inc.
Annualized: $ 1.1400
 
Bob Aronson, Director of Investor Relations
 
 
 
Brad Cohen
Dividend Yield: 8.6%**
 
2600 South Gessner, Suite 500, Houston, Texas 77063
 
 
 
203.682.8211
 
 
713.435.2219 email: ir@whitestonereit.com
 
 
Board of Trustees:
 
website: www.whitestonereit.com
 
 
James C. Mastandrea
 
 
 
 
Daryl J. Carter
 
Analyst Coverage:
 
 
 
 
 
 
Donald F. Keating
 
BMO Capital Markets
 
Hilliard Lyons
 
JMP Securities
 
Ladenburg Thalmann
Paul T. Lambert
 
Paul Adornato, CFA
 
Carol L. Kemple
 
Mitch Germain
 
Daniel P. Donlan
Jack L. Mahaffey
 
212.885.4170
 
502.588.1839
 
212.906.3546
 
212.409.2056
Trustee Emeritus:
 
Paul.Adornato@bmo.com
 
ckemple@hilliard.com
 
mgermain@jmpsecurities.com
 
ddonlan@ladenburg.com
Daniel G. DeVos
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
* As of April 26, 2016
 
Maxim Group
 
Robert W. Baird & Co.
 
SunTrust Robinson Humphrey
 
Wunderlich Securities, Inc.
** Based on common share price
 
Michael Diana
 
RJ Milligan
 
Ki Bin Kim, CFA
 
Craig Kucera
of $13.23 as of close of market on
 
212.895.3641
 
813.273.8252
 
212.303.4124
 
540.277.3366
April 26, 2016.
 
mdiana@maximgrp.com
 
rjmilligan@rwbaird.com
 
kibin.kim@suntrust.com
 
ckucera@wundernet.com

1

NEWS RELEASE

Whitestone REIT Reports Solid Start with Q1 2016 FFO Core of $0.34 per share; “e-commerce resistant” Business Model Generates Year-Over-Year Increases of 19.7% in Revenues, 21.2% in NOI and 18.5% in FFO Core

-Company Reiterates 2016 Guidance-

Houston, Texas, April 27, 2016 - Whitestone REIT (NYSE: WSR) (“Whitestone” or the “Company”) today announced operating results for the first quarter ended March 31, 2016. All per share amounts presented in this news release are on a diluted per common share and operating partnership (“OP”) unit basis unless stated otherwise.

Company Highlights

First Quarter 2016 Compared to First Quarter 2015:

•
19.7% growth in revenues
•
21.2% increase in net operating income (“NOI”)
•
213.9% increase in net income (including $2.9 million gain from sale of properties)
•
18.5% increase in Funds From Operations (“FFO”) Core
•
4% same store NOI growth
•
12.8% increase in rental rates on new and renewal leases signed during the quarter (GAAP basis)
•
FFO Core and net income of $0.34 and $0.18 on a per share basis, respectively
•
81.0% dividend to FFO Core ratio
•
89.3% occupancy in the Company’s retail properties, up 150 basis points

Whitestone Overview

A quality portfolio of neighborhood retail centers with upside potential meeting the daily necessities of fast-growing communities. Whitestone’s optimal mix of tenants who provide convenience and high-demand services reduces risk and generates superior financial results for both customers and Whitestone investors.

CEO Comments

“We produced another strong quarter of profitable growth, driven by our innovative, sustainable and scalable business model,” stated Jim Mastandrea, Chairman and Chief Executive Officer. “Our unique model develops service-based retail properties, which are located in desirable neighborhoods with an overall median household income in excess of $75,000, to serve as destinations for the community. This strategy has led to properties that are relatively ‘e-commerce resistant’ and less affected by the trend towards online shopping.”

Mr. Mastandrea concluded, “We took a meaningful step during the quarter in our ongoing transition to a pure-play owner of neighborhood retail centers by completing the sale of another one of our non-core properties. On an invested capital basis, our portfolio currently stands at approximately 90% retail and 10% warehouse, flex space and office. As we continue to dispose of non-core properties, we plan to recycle the proceeds into acquiring attractive properties located in fast growing cities where we currently own real estate or other similar markets in business friendly states in our efforts to create long-term value for our shareholders.”
 

2

Real Estate Portfolio Update

Community Centered PropertiesTM Portfolio Statistics:
As of March 31, 2016, Whitestone owned 69 Community Centered PropertiesTM with 5.9 million square feet of gross leasable area producing annual NOI of approximately $70.0 million. The portfolio is comprised of 43 properties in Texas, 25 in Arizona and one in Illinois that offer significant growth potential meeting the daily necessities of fast-growing communities. In Texas and Arizona, Whitestone’s Community Centered PropertiesTM are located in Austin (4), San Antonio (3), Dallas-Fort Worth (7), Houston (29) and Phoenix (25). In addition to being business friendly, these are five of the top markets in the country in terms of size, economic strength and population growth. Between 2000 and 2014, all of these cities experienced double-digit growth in population, with Austin at +35.8%, San Antonio at +23.4%, Dallas-Fort Worth at +20.5%, Phoenix at +15.8% and Houston at +13.2%. The neighborhood centers in these markets are located on the best retail corners embedded in affluent communities.

With its consumer-centric discipline, the Company strives for a tenant mix of national, regional and local tenants at each of its properties that meet the daily needs of the residents living in the surrounding neighborhoods. At the end of the first quarter, the Company's diversified tenant base was comprised of 1,465 tenants, with the largest tenant accounting for only 2.6% of annualized base rental revenues.  Lease terms range from less than one year for smaller tenants to over 15 years for larger tenants.  The leases generally include minimum monthly lease payments and tenant reimbursements for payment of taxes, insurance and maintenance, and typically exclude restrictive lease clauses.

Leasing Activity:
During the first quarter, the leasing team signed 122 leases totaling 285,202 square feet in new, expansion and renewal leases, compared to 76 leases totaling 196,401 square feet in the first quarter of 2015. The total lease value added during the quarter was $16.1 million compared to $8.6 million during the same period last year.

The Company's operating portfolio occupancy and total occupancy stood at 87.7% and 86.9%, respectively, at quarter end.

Acquisition and Disposition Activity:
There was no acquisition activity in the first quarter.

On February 17, 2016, the Company completed the sale of approximately 0.5 acres of its 4.5 acre Pinnacle Phase II development parcel located in Scottsdale, Arizona, for $1.1 million. A gain of $1.0 million was recorded on the sale.

On March 3, 2016, Whitestone continued with its transition to a pure-play retail portfolio with the sale of Brookhill, a non-core property located in Houston, Texas, for $3.1 million. A gain of $1.9 million was recorded on the sale.
 

Balance Sheet and Liquidity

Balance Sheet:
Reflecting the Company’s selective development and redevelopment activity during the quarter, offset somewhat by the sale of a non-core asset, at March 31, 2016, the Company had undepreciated real estate assets of $838.3 million compared to $835.5 million at December 31, 2015.


3

Liquidity, Debt and Credit Facility:
At March 31, 2016, 49 of the Company’s 69 properties were unencumbered by mortgage debt, with an undepreciated cost basis of $586.5 million. The Company had total real estate debt of $506.2 million, of which $371.6 million, or approximately 73%, was subject to fixed interest rates. The Company's weighted average interest rate on all fixed rate debt as of the end of the first quarter was 3.9% and the weighted average remaining term was 6.1 years.

At quarter end, Whitestone had $2.4 million of cash available on its balance sheet and $165.4 million of available capacity under its credit facility, before the $200 million accordion option.

Dividend

On March 14, 2016, the Company declared a quarterly cash distribution of $0.285 per common share and OP unit for the second quarter of 2016, to be paid in three equal installments of $0.095 in April, May and June of 2016.

2016 FFO Core Guidance

The Company’s FFO Core guidance for 2016 is a range of $1.33 to $1.39 per share. This guidance reflects the Board’s and management’s view of current and future market conditions, as well as the earnings impact of events referenced elsewhere in this release and during the Company’s conference call. This guidance does not include the operational or capital impact of any future unannounced acquisition or disposition activity. Please refer to the “2016 Financial Guidance” section of the supplemental data package for the full list of guidance information.

Conference Call Information

In conjunction with the issuance of its financial results, you are invited to listen to the Company’s earnings release conference call to be broadcast live on Thursday, April 28, 2016 at 11:00 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:         (877) 591-4951
Dial-in number for international participants:    (719) 325-4904

The conference call will be recorded and a telephone replay will be available through Thursday, May 12, 2016. Replay access information is as follows:

Replay number for domestic participants:        (877) 870-5176
Replay number for international participants:    (858) 384-5517
Pass Code (for all participants):            5614356

To listen to a live 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 first 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.

4


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 REIT (NYSE: WSR) is a fully integrated real estate investment trust ("REIT") that acquires, owns, leases and manages a quality portfolio of neighborhood retail centers with upside potential meeting the daily necessities of fast-growing communities. Whitestone’s optimal mix of tenants who provide convenience and high-demand services reduces risk and generates superior financial results for both customers and Whitestone investors. Founded in 1998, the Company is internally managed with a portfolio of 69 commercial properties in Texas, Arizona and Illinois. For additional information about the Company, 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 can generally be identified by the Company's use of forward-looking terminology, such as "may," "will," "plan," "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.

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 meet its assumptions regarding its earnings guidance, 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; 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 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.

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


5

Non-GAAP Financial Measures

This release contains supplemental financial measures that are not calculated pursuant to U.S. generally accepted accounting principles ("GAAP") including FFO, FFO Core, and NOI. Following are explanations 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 NAREIT, which states that FFO should represent net income available to common shareholders (computed in accordance with GAAP) excluding gains or losses from sales of operating assets, impairment charges and extraordinary items, plus depreciation and amortization of operating properties, including the Company's share of unconsolidated real estate joint ventures and partnerships. 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: 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, non-cash share-based compensation expense, rent support agreement payments received from sellers on acquired assets and acquisition costs. 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.


6

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). 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 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.

Contact Whitestone REIT:
Bob Aronson
Director of Investor Relations
Direct: (713) 435-2219; Mobile: (832) 364-8314


7


Whitestone REIT and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)

 
 
March 31, 2016
 
December 31, 2015
 
 
(unaudited)
 
 
ASSETS
Real estate assets, at cost
 
 
 
 
Property
 
$
838,220

 
$
835,538

Accumulated depreciation
 
(93,942
)
 
(89,580
)
Total real estate assets
 
744,278

 
745,958

Cash and cash equivalents
 
2,447

 
2,587

Restricted cash
 
210

 
121

Marketable securities
 
430

 
435

Escrows and acquisition deposits
 
7,675

 
6,668

Accrued rents and accounts receivable, net of allowance for doubtful accounts
 
16,471

 
15,466

Unamortized lease commissions and loan costs
 
8,005

 
8,178

Prepaid expenses and other assets
 
3,445

 
2,672

Total assets
 
$
782,961

 
$
782,085

 
 
 
 
 
LIABILITIES AND EQUITY
Liabilities:
 
 
 
 
Notes payable
 
$
505,337

 
$
497,955

Accounts payable and accrued expenses
 
25,019

 
24,051

Tenants' security deposits
 
5,434

 
5,254

Dividends and distributions payable
 
7,962

 
7,834

Total liabilities
 
543,752

 
535,094

Commitments and contingencies:
 
—

 
—

Equity:
 
 
 
 
Preferred shares, $0.001 par value per share; 50,000,000 shares authorized; none issued and outstanding as of March 31, 2016 and December 31, 2015, respectively
 
—

 
—

Common shares, $0.001 par value per share; 400,000,000 shares authorized; 27,426,480 and 26,991,493 issued and outstanding as of March 31, 2016 and December 31, 2015, respectively
 
27

 
27

Additional paid-in capital
 
361,250

 
359,971

Accumulated deficit
 
(119,765
)
 
(116,895
)
Accumulated other comprehensive loss
 
(6,067
)
 
(129
)
Total Whitestone REIT shareholders' equity
 
235,445

 
242,974

Noncontrolling interest in subsidiary
 
3,764

 
4,017

Total equity
 
239,209

 
246,991

Total liabilities and equity
 
$
782,961

 
$
782,085





8

Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(unaudited)
(in thousands, except per share data)

 
 
Three Months Ended March 31,
 
 
2016
 
2015
Property revenues
 
 
 
 
Rental revenues
 
$
19,422

 
$
16,465

Other revenues
 
6,013

 
4,787

Total property revenues
 
25,435

 
21,252

 
 
 
 
 
Property expenses
 
 
 
 
Property operation and maintenance
 
4,794

 
4,083

Real estate taxes
 
3,354

 
2,904

Total property expenses
 
8,148

 
6,987

 
 
 
 
 
Other expenses (income)
 
 
 
 
General and administrative
 
4,836

 
4,485

Depreciation and amortization
 
5,392

 
4,564

Interest expense
 
4,804

 
3,408

Interest, dividend and other investment income
 
(97
)
 
(9
)
Total other expense
 
14,935

 
12,448

 
 
 
 
 
Income from continuing operations before gain (loss) on sale or disposal of properties or assets and income taxes
 
2,352

 
1,817

 
 
 
 
 
Provision for income taxes
 
(156
)
 
(83
)
Gain on sale of properties
 
2,890

 
—

Gain (loss) on sale or disposal of assets
 
2

 
(105
)
Income from continuing operations
 
5,088

 
1,629

 
 
 
 
 
Loss from discontinued operations
 
—

 
(8
)
Loss from discontinued operations
 
—

 
(8
)
 
 
 
 
 
Net income
 
5,088

 
1,621

 
 
 
 
 
Less: Net income attributable to noncontrolling interests
 
91

 
27

 
 
 
 
 
Net income attributable to Whitestone REIT
 
$
4,997

 
$
1,594


9

Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(unaudited)
(in thousands, except per share data)

 
 
Three Months Ended March 31,
 
 
2016
 
2015
Basic Earnings Per Share:
 
 
 
 
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares
 
$
0.18

 
$
0.07

Income from discontinued operations attributable to Whitestone REIT
 
0.00

 
0.00

Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares
 
$
0.18

 
$
0.07

Diluted Earnings Per Share:
 
 
 
 
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares
 
$
0.18

 
$
0.06

Income from discontinued operations attributable to Whitestone REIT
 
0.00

 
0.00

Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares
 
$
0.18

 
$
0.06

 
 
 
 
 
Weighted average number of common shares outstanding:
 
 
 
 
Basic
 
26,604

 
22,577

Diluted
 
27,489

 
23,226

 
 
 
 
 
Distributions declared per common share / OP unit
 
$
0.2850

 
$
0.2850

 
 
 
 
 
Consolidated Statements of Comprehensive Income (Loss)
 
 
 
 
 
 
 
 
 
Net income
 
$
5,088

 
$
1,621

 
 
 
 
 
Other comprehensive gain (loss)
 
 
 
 
 
 
 
 
 
Unrealized loss on cash flow hedging activities
 
(6,041
)
 
(319
)
Unrealized gain (loss) on available-for-sale marketable securities
 
(5
)
 
41

 
 
 
 
 
Comprehensive income (loss)
 
(958
)
 
1,343

 
 
 
 
 
Less: Comprehensive income (loss) attributable to noncontrolling interests
 
(17
)
 
23

 
 
 
 
 
Comprehensive income (loss) attributable to Whitestone REIT
 
$
(941
)
 
$
1,320



Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
 
 
Three Months Ended March 31,
 
 
2016
 
2015
Cash flows from operating activities:
 
 
 
 
Net income from continuing operations
 
$
5,088

 
$
1,629

Net income (loss) from discontinued operations
 
—

 
(8
)
Net income
 
5,088

 
1,621

Adjustments to reconcile net income to net cash provided by operating activities:
 
 

 
 

Depreciation and amortization
 
5,392

 
4,564

Amortization of deferred loan costs
 
315

 
300

Amortization of notes payable discount
 
72

 
74

Loss (gain) on sale or disposal of assets and properties
 
(2,892
)
 
105

Bad debt expense
 
372

 
184

Share-based compensation
 
2,025

 
1,699

Changes in operating assets and liabilities:
 
 
 
 
Escrows and acquisition deposits
 
1,853

 
706

Accrued rent and accounts receivable
 
(1,377
)
 
(538
)
Unamortized lease commissions
 
(382
)
 
(273
)
Prepaid expenses and other assets
 
191

 
145

Accounts payable and accrued expenses
 
(5,161
)
 
(1,122
)
Tenants' security deposits
 
180

 
46

Net cash provided by operating activities
 
5,676

 
7,519

Net cash used in operating activities of discontinued operations
 
—

 
(8
)
Cash flows from investing activities:
 
 

 
 

Acquisitions of real estate
 
—

 
(6,300
)
Additions to real estate
 
(4,364
)
 
(2,876
)
Proceeds from sale of property
 
1,097

 
—

Net cash used in investing activities
 
(3,267
)
 
(9,176
)
Net cash used in investing activities of discontinued operations
 
—

 
—

Cash flows from financing activities:
 
 

 
 

Distributions paid to common shareholders
 
(7,711
)
 
(6,526
)
Distributions paid to OP unit holders
 
(139
)
 
(113
)
Proceeds from revolving credit facility, net
 
7,000

 
9,000

Repayments of notes payable
 
(739
)
 
(612
)
Change in restricted cash
 
(89
)
 
—

Repurchase of common shares
 
(871
)
 
—

Net cash provided by (used in) financing activities
 
(2,549
)
 
1,749

Net cash used in financing activities of discontinued operations
 
—

 
—

Net increase (decrease) in cash and cash equivalents
 
(140
)
 
84

Cash and cash equivalents at beginning of period
 
2,587

 
4,236

Cash and cash equivalents at end of period
 
$
2,447

 
$
4,320





Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Supplemental Disclosure
(unaudited)
(in thousands)
 
 
Three Months Ended March 31,
 
 
2016
 
2015
Supplemental disclosure of cash flow information:
 
 

 
 

Cash paid for interest
 
$
4,602

 
$
3,132

Non cash investing and financing activities:
 
 

 
 

Disposal of fully depreciated real estate
 
$
187

 
$
41

Financed insurance premiums
 
$
1,060

 
$
1,057

Value of shares issued under dividend reinvestment plan
 
$
27

 
$
23

Value of common shares exchanged for OP units
 
$
98

 
$
64

Change in fair value of available-for-sale securities
 
$
(5
)
 
$
41

Change in fair value of cash flow hedge
 
$
(6,041
)
 
$
(319
)
Proceeds from 1031 exchange transaction
 
$
2,860

 
$
—



10

Whitestone REIT and Subsidiaries
RECONCILIATION OF NON-GAAP MEASURES
(in thousands, except per share and per unit data)

 
 
Three Months Ended
 
 
March 31,
FFO AND FFO CORE
 
2016
 
2015
Net income attributable to Whitestone REIT
 
$
4,997

 
$
1,594

Depreciation and amortization of real estate assets
 
5,311

 
4,540

(Gain) loss on sale or disposal of assets and properties
 
(2,892
)
 
105

Net income attributable to noncontrolling interests
 
91

 
27

FFO
 
7,507

 
6,266

 
 
 
 
 
Non cash share-based compensation expense
 
2,025

 
1,674

Acquisition costs
 
170

 
244

FFO Core
 
$
9,702

 
$
8,184

 
 
 
 
 
FFO PER SHARE AND OP UNIT CALCULATION
 
 
 
 
Numerator:
 
 
 
 
FFO
 
$
7,507

 
$
6,266

Distributions paid on unvested restricted common shares
 
(155
)
 
(107
)
FFO excluding amounts attributable to unvested restricted common shares
 
7,352

 
6,159

FFO Core excluding amounts attributable to unvested restricted common shares
 
$
9,547

 
$
8,077

 
 
 
 
 
Denominator:
 
 
 
 
Weighted average number of total common shares - basic
 
26,604

 
22,577

Weighted average number of total noncontrolling OP units - basic
 
491

 
393

Weighted average number of total commons shares and noncontrolling OP units - basic
 
27,095

 
22,970

 
 
 
 
 
Effect of dilutive securities:
 
 
 
 
Unvested restricted shares
 
885

 
649

Weighted average number of total common shares and noncontrolling OP units - dilutive
 
27,980

 
23,619

 
 
 
 
 
FFO per common share and OP unit - basic
 
$
0.27

 
$
0.27

FFO per common share and OP unit - diluted
 
$
0.26

 
$
0.26

 
 
 
 
 
FFO Core per common share and OP unit - basic
 
$
0.35

 
$
0.35

FFO Core per common share and OP unit - diluted
 
$
0.34

 
$
0.34


Whitestone REIT and Subsidiaries
RECONCILIATION OF NON-GAAP MEASURES
(continued)
(in thousands, except per share and per unit data)

 
 
Three Months Ended
 
 
March 31,
 
 
2016
 
2015
PROPERTY NET OPERATING INCOME
 
 
 
 
 
 
 
 
 
Net income attributable to Whitestone REIT
 
$
4,997

 
$
1,594

General and administrative expenses
 
4,836

 
4,485

Depreciation and amortization
 
5,392

 
4,564

Interest expense
 
4,804

 
3,408

Interest, dividend and other investment income
 
(97
)
 
(9
)
Provision for income taxes
 
156

 
83

Gain on sale of properties
 
(2,890
)
 
—

(Gain) loss on disposal of assets
 
(2
)
 
105

Income from discontinued operations
 
—

 
8

Net income attributable to noncontrolling interests
 
91

 
27

NOI
 
$
17,287

 
$
14,265


EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION
 
 
 
 
 
 
 
 
 
Net income attributable to Whitestone REIT
 
$
4,997

 
$
1,594

Depreciation and amortization
 
5,392

 
4,564

Interest expense
 
4,804

 
3,408

Provision for income taxes
 
156

 
83

Gain on sale of properties
 
(2,890
)
 
—

(Gain) loss on disposal of assets
 
(2
)
 
105

Net income attributable to noncontrolling interests
 
91

 
27

EBITDA (1)
 
$
12,548

 
$
9,781


 
 
Three Months Ended
 
 
March 31,
 
December 31,
 
September 30,
 
June 30,
 
 
2016
 
2015
 
2015
 
2015
Net income attributable to Whitestone REIT
 
$
4,997

 
$
2,051

 
$
1,570

 
$
1,534

Depreciation and amortization
 
5,392

 
5,373

 
5,149

 
4,675

Interest expense
 
4,804

 
4,246

 
3,740

 
3,516

Provision for income taxes
 
156

 
98

 
100

 
91

Gain on sale of properties
 
(2,890
)
 
—

 
—

 
—

(Gain) loss on disposal of assets
 
(2
)
 
(63
)
 
148

 
(5
)
Net income attributable to noncontrolling interests
 
91

 
38

 
25

 
26

EBITDA (1)
 
$
12,548

 
$
11,743

 
$
10,732

 
$
9,837




(1) 
Earnings Before Interest, Tax, Depreciation and Amortization (“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. 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.


11

Whitestone REIT and Subsidiaries
SAME STORE PROPERTY ANALYSIS
(in thousands)

 
 
Three Months Ended
 
 
 
 
 
 
March 31,
 
Increase
 
% Increase
 
 
2016
 
2015
 
(Decrease)
 
(Decrease)
Same store (51 properties, exclusive of land held for development) (1)
 
 
 
 
 
 
 
 
Property revenues
 
 
 
 
 
 
 
 
Rental revenues
 
$
16,904

 
$
16,464

 
$
440

 
3
 %
Other revenues
 
4,942

 
4,787

 
155

 
3
 %
Total property revenues
 
21,846

 
21,251

 
595

 
3
 %
 
 
 
 
 
 
 
 
 
Property expenses
 
 
 
 
 
 
 
 
Property operation and maintenance
 
4,305

 
4,083

 
222

 
5
 %
Real estate taxes
 
2,716

 
2,904

 
(188
)
 
(6
)%
Total property expenses
 
7,021

 
6,987

 
34

 
0
 %
 
 
 
 
 
 
 
 
 
Total same store net operating income
 
14,825

 
14,264

 
561

 
4
 %
 
 
 
 
 
 
 
 
 
New store (13 properties, exclusive of land held for development)(2)
 
 
 
 
 
 
 
 
Property revenues
 
 
 
 
 
 
 
 
Rental revenues
 
2,518

 
1

 
2,517

 
Not meaningful

Other revenues
 
1,071

 
—

 
1,071

 
Not meaningful

Total property revenues
 
3,589

 
1

 
3,588

 
Not meaningful

 
 
 
 
 
 
 
 
 
Property expenses
 
 
 
 
 
 
 
 
Property operation and maintenance
 
489

 
—

 
489

 
Not meaningful

Real estate taxes
 
638

 
—

 
638

 
Not meaningful

Total property expenses
 
1,127

 
—

 
1,127

 
Not meaningful

 
 
 
 
 
 
 
 
 
Total new store net operating income
 
2,462

 
1

 
2,461

 
Not meaningful

 
 
 
 
 
 
 
 
 
Total property net operating income
 
17,287

 
14,265

 
3,022

 
21
 %
 
 
 
 
 
 
 
 
 
Less total other expenses, provision for income taxes, gain on sale of properties and loss on disposal of assets
 
12,199

 
12,636

 
(437
)
 
(3
)%
 
 
 
 
 
 
 
 
 
Income from continuing operations
 
5,088

 
1,629

 
3,459

 
212
 %
Loss from discontinued operations, net of taxes
 
—

 
(8
)
 
8

 
(100
)%
 
 
 
 
 
 
 
 
 
Net income
 
$
5,088

 
$
1,621

 
$
3,467

 
214
 %






12

(1) 
We define “Same Stores” as properties that have been owned since the beginning of the period being compared. For purposes of comparing the three months ended March 31, 2016 to the three months ended March 31, 2015, Same Stores include properties currently owned before January 1, 2015.

(2) 
We define “New Stores” as properties that have been owned since the beginning of the period being compared. For purposes of comparing the three months ended March 31, 2016 to the three months ended March 31, 2015, New Stores include properties acquired between January 1, 2015 and March 31, 2016.

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

 
 
Three Months Ended
 
 
March 31,
 
 
2016
 
2015
Other Financial Information:
 
 
 
 
 
 
 
 
 
Tenant improvements (1)
 
$
458

 
$
869

Leasing commissions
 
$
436

 
$
242

Maintenance capital
 
$
591

 
$
514

Scheduled debt principal payments
 
$
501

 
$
402

Straight line rent income
 
$
476

 
$
198

Market rent amortization income (loss) from acquired leases
 
$
(25
)
 
$
39

Non-cash share-based compensation expense
 
$
2,025

 
$
1,674

Non-real estate depreciation and amortization
 
$
82

 
$
23

Amortization of loan fees
 
$
315

 
$
300

Acquisition costs
 
$
170

 
$
244

Undepreciated value of unencumbered properties
 
$
586,616

 
$
433,698

Number of unencumbered properties
 
49

 
44

Full time employees
 
96

 
86


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


Whitestone REIT and Subsidiaries
MARKET CAPITALIZATION AND SELECTED RATIOS
(in thousands, except per share amounts and percentages)
 
 
As of March 31, 2016
MARKET CAPITALIZATION:
 
Percent of Total Equity
 
Total Market Capitalization
 
Percent of Total Market Capitalization
Equity Capitalization:
 
 
 
 
 
 
Common shares outstanding
 
98.3
%
 
27,426

 
 
Operating partnership units outstanding
 
1.7
%
 
485

 
 
Total
 
100.0
%
 
27,911

 
 
 
 
 
 
 
 
 
Market price of common shares as of
 
 
 
 
 
 
March 31, 2016
 
 
 
$
12.57

 
 
 
 
 
 
 
 
 
Total equity capitalization
 
 
 
350,841

 
41
%
 
 
 
 
 
 
 
Debt Capitalization:
 
 
 
 
 
 
Outstanding debt
 
 
 
$
507,053

 
 
Less: Cash and cash equivalents
 
 
 
(2,447
)
 
 
 
 
 
 
504,606

 
59
%
 
 
 
 
 
 
 
Total Market Capitalization as of
 
 
 
 
 
 
March 31, 2016
 
 
 
$
855,447

 
100
%


SELECTED RATIOS:
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
March 31,
 
December 31,
 
September 30,
 
June 30,
 
 
2016
 
2015
 
2015
 
2015
INTEREST COVERAGE RATIO
 
 
 
 
 
 
 
 
EBITDA/Interest Expense
 
 
 
 
 
 
 
 
EBITDA (1)
 
$
12,548

 
$
11,743

 
$
10,732

 
$
9,837

Interest expense, excluding amortization of loan fees (1)
 
4,489

 
3,936

 
3,439

 
3,215

Ratio of EBITDA to interest expense
 
2.8

 
3.0

 
3.1

 
3.1

 
 
 
 
 
 
 
 
 
LEVERAGE RATIO
 
 
 
 
 
 
 
 
Debt/Undepreciated Book Value
 
 
 
 
 
 
 
 
Outstanding debt (1)
 
$
507,053

 
$
499,747

 
$
498,468

 
$
403,287

Less: Cash
 
(2,447
)
 
(2,587
)
 
(5,660
)
 
(6,251
)
Outstanding debt after cash
 
$
504,606

 
$
497,160

 
$
492,808

 
$
397,036

 
 
 
 
 
 
 
 
 
Undepreciated real estate assets (1)
 
$
838,220

 
$
835,538

 
$
831,425

 
$
730,165

 
 
 
 
 
 
 
 
 
Ratio of debt to real estate assets
 
60
%
 
60
%
 
59
%
 
54
%

Whitestone REIT and Subsidiaries
MARKET CAPITALIZATION AND SELECTED RATIOS
(continued)
(in thousands, except per share amounts and percentages)

 
 
Three Months Ended
 
 
March 31,
 
December 31,
 
September 30,
 
June 30,
 
 
2016
 
2015
 
2015
 
2015
Debt/EBITDA Ratio
 
 
 
 
 
 
 
 
Outstanding debt (1)
 
$
507,053

 
$
499,747

 
$
498,468

 
$
403,287

Less: Cash
 
(2,447
)
 
(2,587
)
 
(5,660
)
 
(6,251
)
Outstanding debt after cash
 
504,606

 
497,160

 
492,808

 
397,036

 
 
 
 
 
 
 
 
 
EBITDA (1)
 
$
12,548

 
$
11,743

 
$
10,732

 
$
9,837

Non-cash share based compensation
 
2,025

 
2,137

 
1,859

 
1,669

EBITDA, adjusted
 
14,573

 
13,880

 
12,591

 
11,506

 
 
 
 
 
 
 
 
 
Impact of partial quarter acquisitions and dispositions
 
—

 
—

 
515

 
516

 
 
 
 
 
 
 
 
 
Pro forma quarterly EBITDA
 
14,573

 
13,880

 
13,106

 
12,022

 
 
 
 
 
 
 
 
 
Pro forma annualized EBITDA (2)
 
58,292

 
55,520

 
52,424

 
48,088

 
 
 
 
 
 
 
 
 
Ratio of debt to EBITDA
 
8.66

 
8.95

 
9.40

 
8.26


(1)  
Includes amounts from discontinued operations.

(2) 
Pro forma annualized EBITDA represents pro forma quarterly EBITDA multiplied by four.


13

 Whitestone REIT and Subsidiaries
SUMMARY OF OUTSTANDING DEBT AND DEBT MATURITIES
TOTAL OUTSTANDING DEBT
(in thousands)

Description
 
March 31, 2016
 
December 31, 2015
Fixed rate notes
 
 
 
 
$10.5 million, LIBOR plus 2.00% Note, due September 24, 2018 (1)
 
$
10,160

 
$
10,220

$50.0 million, 0.84% plus 1.35% to 1.90% Note, due October 30, 2020 (2)
 
50,000

 
50,000

$50.0 million, 1.50% plus 1.35% to 1.90% Note, due January 29, 2021 (3)
 
50,000

 
50,000

$100.0 million, 1.73% plus 1.65% to 2.25% Note, due October 30, 2022 (4)
 
100,000

 
100,000

$37.0 million 3.76% Note, due December 1, 2020
 
34,904

 
35,146

$6.5 million 3.80% Note, due January 1, 2019
 
6,148

 
6,190

$19.0 million 4.15% Note, due December 1, 2024
 
19,000

 
19,000

$20.2 million 4.28% Note, due June 6, 2023
 
19,957

 
20,040

$14.0 million 4.34% Note, due September 11, 2024
 
14,000

 
14,000

$14.3 million 4.34% Note, due September 11, 2024
 
14,300

 
14,300

$16.5 million 4.97% Note, due September 26, 2023
 
16,450

 
16,450

$15.1 million 4.99% Note, due January 6, 2024
 
15,060

 
15,060

$9.2 million, Prime Rate less 2.00% Note, due December 29, 2017 (5)
 
7,882

 
7,886

$2.6 million 5.46% Note, due October 1, 2023
 
2,541

 
2,550

$11.1 million 5.87% Note, due August 6, 2016
 
11,228

 
11,305

$1.1 million 2.97% Note, due November 28, 2016
 
823

 
—

Floating rate notes
 
 
 
 
Unsecured line of credit, LIBOR plus 1.40% to 1.95%, due October 30, 2019
 
134,600

 
127,600

Total notes payable principal
 
507,053

 
499,747

Less deferred financing costs, net of accumulated amortization
 
(1,716
)
 
(1,792
)
 
 
$
505,337

 
$
497,955


(1)
Promissory note includes an interest rate swap that fixed the interest rate at 3.55% for the duration of the term.

(2)
Promissory note includes an interest rate swap that fixed the LIBOR portion of our five-year $50 million term loan under our unsecured credit facility at 0.84% through February 3, 2017 and 1.75% beginning February 3, 2015 through October 30, 2020.

(3) 
Promissory note includes an interest rate swap that fixed the LIBOR portion of our six-year $50 million term loan under our unsecured credit facility at 1.50%.

(4) 
Promissory note includes an interest rate swap that fixed the LIBOR portion of our $100 million term loan under our unsecured credit facility at 1.73%.

(5) 
Promissory note includes an interest rate swap that fixed the interest rate at 5.72% for the duration of the term. As part of our acquisition of Paradise Plaza in August 2012, we recorded a discount on the note of $1.3 million, which amortizes into interest expense over the life of the loan and results in an imputed interest rate of 4.13%.


14

SCHEDULE OF DEBT MATURITIES AS OF MARCH 31, 2016
(in thousands)
 
Year
 
Scheduled Amortization Payments
 
Scheduled Maturities
 
Total Scheduled Maturities
 
Percentage of Debt Maturing
 
 
 
 
 
 
 
 
 
2016
 
$
2,458

 
$
11,125

 
$
13,583

 
2.7
%
2017
 
2,374

 
7,839

 
10,213

 
2.0
%
2018
 
2,576

 
9,560

 
12,136

 
2.4
%
2019
 
2,392

 
140,257

 
142,649

 
28.1
%
2020
 
2,876

 
79,951

 
82,827

 
16.3
%
Thereafter
 
6,362

 
239,283

 
245,645

 
48.5
%
Total
 
$
19,038

 
$
488,015

 
$
507,053

 
100.0
%

15

Whitestone REIT and Subsidiaries
SUMMARY OF OCCUPANCY AND TOP TENANTS

 
 
Gross Leasable Area as of
 
Occupancy % as of
 
 
March 31,
 
March 31,
 
December 31,
 
September 30,
 
June 30,
Community Centered Properties
 
2016
 
2016
 
2015
 
2015
 
2015
Retail
 
4,002,644

 
89
%
 
90
%
 
88
%
 
88
%
Office/Flex
 
1,115,647

 
85
%
 
85
%
 
84
%
 
87
%
Office
 
521,134

 
81
%
 
80
%
 
79
%
 
77
%
Total - Operating Portfolio
 
5,639,425

 
88
%
 
88
%
 
86
%
 
87
%
Redevelopment, New Acquisitions (1)
 
242,329

 
68
%
 
74
%
 
81
%
 
83
%
Total
 
5,881,754

 
87
%
 
87
%
 
86
%
 
86
%
 
(1) 
Includes (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.

16

Whitestone REIT and Subsidiaries
SUMMARY OF OCCUPANCY AND TOP TENANTS
(continued)
Tenant Name
 
Location
 
Annualized Base Rental Revenue (in thousands)(1)
 
Percentage of Total Annualized Base Rental Revenues
 
Initial Lease Date
 
Year Expiring
Safeway Stores Incorporated (2)
 
Phoenix, Houston and Austin
 
$
2,022

 
2.6
%
 
11/14/1982, 5/8/1991, 7/1/2000, 4/1/2014 and 4/1/2014
 
2017, 2020, 2021, 2024 and 2034
Bashas' Inc. (3)
 
Phoenix
 
936

 
1.2
%
 
10/9/2004 and 4/1/2009
 
2024 and 2029
Haggens Food & Pharmacy (4)
 
Phoenix
 
660

 
0.9
%
 
2/27/1996 and 7/12/2000
 
2020 and 2022
Wells Fargo & Company (5)
 
Phoenix
 
645

 
0.9
%
 
10/24/1996 and 4/16/1999
 
2016 and 2018
Alamo Drafthouse Cinema
 
Austin
 
639

 
0.8
%
 
2/1/2012
 
2027
Dollar Tree (6)
 
Phoenix and Houston
 
552

 
0.7
%
 
8/10/1999, 6/29/2001, 11/8/2009, 12/17/2009 and 5/21/2013
 
2016, 2017, 2020, 2020 and 2023
University of Phoenix
 
San Antonio
 
530

 
0.7
%
 
10/18/2010
 
2018
Walgreens & Co. (7)
 
Phoenix and Houston
 
530

 
0.7
%
 
11/14/1982, 11/2/1987 and 11/3/1996
 
2017, 2027 and 2049
Petco (8)
 
Phoenix and Houston
 
484

 
0.6
%
 
7/6/1998 and 10/15/2006
 
2019 and 2026
Kroger Co.
 
Dallas
 
483

 
0.6
%
 
12/15/2000
 
2022
Ross Dress for Less, Inc. (9)
 
San Antonio, Phoenix and Houston
 
472

 
0.6
%
 
2/11/2009, 6/18/2012 and 2/7/2013
 
2020, 2023 and 2023
Paul's Ace Hardware
 
Phoenix
 
460

 
0.6
%
 
3/1/2008
 
2018
Rock Solid Images
 
Houston
 
372

 
0.5
%
 
4/1/2004
 
2016
Sterling Jewelers Inc.
 
Phoenix
 
354

 
0.5
%
 
11/23/2004
 
2020
Super Bravo, Inc.
 
Houston
 
349

 
0.5
%
 
6/15/2011
 
2023
 
 
 
 
$
9,488

 
12.4
%
 
 
 
 

 (1) 
Annualized Base Rental Revenues represents the monthly base rent as of March 31, 2016 for each applicable tenant multiplied by 12.



17

(2) 
As of March 31, 2016, we had five leases with the same tenant occupying space at properties located in Phoenix, Houston and Austin. The annualized rental revenue for the lease that commenced on April 1, 2014, and is scheduled to expire in 2034, was $997,000, which represents 1.3% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on April 1, 2014, and is scheduled to expire in 2024, was $42,000, which represents less than 0.1% of our annualized base rental revenue. The annualized rental revenue for the lease that commenced on May 8, 1991, and is scheduled to expire in 2021, was $344,000, which represents 0.5% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on July 1, 2000, and is scheduled to expire in 2020, was $321,000, which represents 0.4% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on November 14, 1982, and is scheduled to expire in 2017, was $318,000, which represents 0.4% of our total annualized base rental revenue.

(3) 
As of March 31, 2016, we had two leases with the same tenant occupying space at properties located in Phoenix. The annualized rental revenue for the lease that commenced on October 9, 2004, and is scheduled to expire in 2024, was $232,000, which represents 0.3% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on April 1, 2009, and is scheduled to expire in 2029, was $704,000, which represents 0.9% of our total annualized base rental revenue.

(4) 
As of March 31, 2016, we had two leases with the same tenant occupying space at properties located in Phoenix. The annualized rental revenue for the lease that commenced on February 27, 1996, and is scheduled to expire in 2022, was $235,000, which represents 0.3% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on July 12, 2000, and is scheduled to expire in 2020, was $425,000, which represents 0.6% of our total annualized base rental revenue.

(5) 
As of March 31, 2016, we had two leases with the same tenant occupying space at properties located in Phoenix. The annualized rental revenue for the lease that commenced on October 24, 1996, and is scheduled to expire in 2016, was $114,000, which represents 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on April 16, 1999, and is scheduled to expire in 2018, was $531,000, which represents 0.7% of our total annualized base rental revenue.

(6) 
As of March 31, 2016, we had five leases with the same tenant occupying space at properties in Houston and Phoenix. The annualized rental revenue for the lease that commenced on June 29, 2001, and is scheduled to expire in 2016, was $108,000, which represents 0.1% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on November 8, 2009, and is scheduled to expire in 2017, was $146,000, which represents 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on August 10, 1999, and is scheduled to expire in 2020, was $77,000, which represents less than 0.1% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on December 17, 2009, and is scheduled to expire in 2020, was $110,000, which represents 0.2% of our total annualized base rental revenue. The lease that commenced on May 21, 2013, and is scheduled to expire in 2023, was $110,000, which represents 0.2% of our total annualized base rental revenue.

(7) 
As of March 31, 2016, we had three leases with the same tenant occupying space at properties located in Phoenix and Houston. The annualized rental revenue for the lease that commenced on November 3, 1996, and is scheduled to expire in 2049, was $279,000, which represents 0.4% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on November 2, 1987, and is scheduled to expire in 2027, was $169,000, which represents 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on November 14, 1982, and is scheduled to expire in 2017, was $82,000, which represents 0.1% of our total annualized base rental revenue.

(8) 
As of March 31, 2016, we had two leases with the same tenant occupying space at properties located in Phoenix and Houston. The annualized rental revenue for the lease that commenced on October 15, 2006, and is scheduled to expire in 2026, was $260,000, which represents 0.3% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on July 6, 1998, and is scheduled to expire in 2019, was $224,000, which represents 0.3% of our total annualized base rental revenue.

(9) 
As of March 31, 2016, we had three leases with the same tenant occupying space at properties located in San Antonio, Phoenix and Houston. The annualized rental revenue for the lease that commenced on June 18, 2012, and is scheduled to expire in 2023, was $175,000, which represents 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on February 11, 2009, and is scheduled to expire in 2020, was $187,000, which represents 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on February 7, 2013, and is scheduled to expire in 2023, was $110,000, which represents 0.2% of our total annualized base rental revenue.
Whitestone REIT and Subsidiaries
SUMMARY OF LEASING ACTIVITY

 
 
Three Months Ended
 
 
March 31,
 
 
2016
 
2015
RENEWALS
 
 
 
 
Number of Leases
 
80

 
44

Total Square Feet (1)
 
176,447

 
83,250

Average Square Feet
 
2,206

 
1,892

Total Lease Value
 
$
8,340,000

 
$
3,361,000

NEW LEASES
 
 
 
 
Number of Leases
 
42

 
32

Total Square Feet (1)
 
108,755

 
113,151

Average Square Feet
 
2,589

 
3,536

Total Lease Value
 
$
7,761,000

 
$
5,189,000

TOTAL LEASES
 
 
 
 
Number of Leases
 
122

 
76

Total Square Feet (1)
 
285,202

 
196,401

Average Square Feet
 
2,338

 
2,584

Total Lease Value
 
$
16,101,000

 
$
8,550,000


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


18

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 Sq. Ft.
 
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:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2016
 
90

 
$
10,387,956

 
207,065

 
3.1

 
$
416,376

 
$
2.01

 
$
13.99

 
$
13.29

 
$
144,276

 
5.3
 %
 
$
335,284

 
12.8
 %
4th Quarter 2015
 
69

 
9,141,269

 
151,437

 
3.2

 
575,486

 
3.80

 
16.62

 
16.60

 
3,581

 
0.1
 %
 
132,699

 
5.5
 %
3rd Quarter 2015
 
71

 
10,628,119

 
164,753

 
3.4

 
434,254

 
2.64

 
16.27

 
15.92

 
57,850

 
2.2
 %
 
197,144

 
8.0
 %
2nd Quarter 2015
 
91

 
9,872,988

 
205,989

 
3.1

 
429,689

 
2.09

 
13.56

 
12.46

 
226,025

 
8.8
 %
 
387,419

 
15.8
 %
Total - 12 months
 
321

 
$
40,030,332

 
729,244

 
3.2

 
$
1,855,805

 
$
2.54

 
$
14.93

 
$
14.34

 
$
431,732

 
4.1
 %
 
$
1,052,546

 
10.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Comparable New Leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2016
 
11

 
$
1,813,074

 
27,167

 
4.6

 
$
140,487

 
$
5.17

 
$
14.50

 
$
12.37

 
$
57,977

 
17.2
 %
 
$
87,898

 
28.5
 %
4th Quarter 2015
 
16

 
1,543,395

 
29,291

 
3.6

 
237,044

 
8.09

 
13.29

 
14.09

 
(23,438
)
 
(5.7
)%
 
(3,214
)
 
(0.8
)%
3rd Quarter 2015
 
18

 
3,075,982

 
44,348

 
3.3

 
185,976

 
4.19

 
17.61

 
18.91

 
(57,268
)
 
(6.9
)%
 
16,681

 
2.2
 %
2nd Quarter 2015
 
16

 
2,048,659

 
49,713

 
4.3

 
123,958

 
2.49

 
9.55

 
9.29

 
12,940

 
2.8
 %
 
42,780

 
9.7
 %
Total - 12 months
 
61

 
$
8,481,110

 
150,519

 
3.9

 
$
687,465

 
$
4.57

 
$
13.55

 
$
13.61

 
$
(9,789
)
 
(0.4
)%
 
$
144,145

 
7.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
 
 
 
 
 
 
 
Comparable Renewal Leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2016
 
79

 
$
8,574,882

 
179,898

 
2.9

 
$
275,889

 
$
1.53

 
$
13.91

 
$
13.43

 
$
86,299

 
3.6
 %
 
$
247,386

 
10.7
 %
4th Quarter 2015
 
53

 
7,597,874

 
122,146

 
3.1

 
338,442

 
2.77

 
17.42

 
17.20

 
$
27,019

 
1.3
 %
 
135,913

 
6.6
 %
3rd Quarter 2015
 
53

 
7,552,137

 
120,405

 
3.4

 
248,278

 
2.06

 
15.77

 
$
14.82

 
115,118

 
6.4
 %
 
180,463

 
10.6
 %
2nd Quarter 2015
 
75

 
7,824,329

 
156,276

 
2.8

 
305,731

 
1.96

 
14.83

 
13.47

 
213,085

 
10.1
 %
 
344,639

 
17.2
 %
Total - 12 months
 
260

 
$
31,549,222

 
578,725

 
3.0

 
$
1,168,340

 
$
2.02

 
$
15.29

 
$
14.53


$
441,521

 
5.2
 %
 
$
908,401

 
11.3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

19

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 Sq. Ft.
 
Contractual Rent Per Sq. Ft. (4)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-comparable:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-Comparable Total Leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2016
 
32

 
$
6,597,013

 
111,090

 
4.9

 
$
1,314,254

 
$
11.83

 
$
10.35

 
 
 
 
 
 
 
 
 
 
4th Quarter 2015
 
35

 
9,933,418

 
110,320

 
5.5

 
2,216,295

 
20.09

 
14.28

 
 
 
 
 
 
 
 
 
 
3rd Quarter 2015
 
40

 
7,623,794

 
110,471

 
4.7

 
1,051,225

 
9.52

 
13.63

 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
26

 
6,105,128

 
62,156

 
5.6

 
978,342

 
15.74

 
16.87

 
 
 
 
 
 
 
 
 
 
Total - 12 months
 
133

 
$
30,259,353

 
394,037

 
5.1

 
$
5,560,116

 
$
14.11

 
$
13.40

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-Comparable New Leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2016
 
31

 
$
6,521,851

 
109,815

 
4.9

 
$
1,313,601

 
$
11.96

 
$
10.25

 
 
 
 
 
 
 
 
 
 
4th Quarter 2015
 
32

 
9,593,047

 
103,458

 
5.7

 
2,202,576

 
21.29

 
14.20

 
 
 
 
 
 
 
 
 
 
3rd Quarter 2015
 
37

 
7,054,633

 
99,099

 
4.9

 
1,017,351

 
10.27

 
13.29

 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
24

 
6,040,110

 
59,466

 
5.8

 
978,342

 
16.45

 
16.96

 
 
 
 
 
 
 
 
 
 
Total - 12 months
 
124

 
$
29,209,641

 
371,838

 
5.3

 
$
5,511,870

 
$
14.82

 
$
13.23

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-Comparable Renewal Leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2016
 
1

 
$
75,162

 
1,275

 
3.0

 
$
653

 
$
0.51

 
$
19.65

 
 
 
 
 
 
 
 
 
 
4th Quarter 2015
 
3

 
340,371

 
6,862

 
3.0

 
13,719

 
2.00

 
15.55

 
 
 
 
 
 
 
 
 
 
3rd Quarter 2015
 
3

 
569,161

 
11,372

 
2.8

 
33,874

 
2.98

 
16.61

 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
2

 
65,018

 
2,690

 
1.6

 
—

 
—

 
14.71

 
 
 
 
 
 
 
 
 
 
Total - 12 months
 
9

 
$
1,049,712

 
22,199

 
2.7

 
$
48,246

 
$
2.17

 
$
16.23

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

20

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 Sq. Ft.
 
Contractual Rent Per Sq. Ft. (4)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New & Renewal
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2016
 
122

 
$
16,984,969

 
318,155

 
3.7

 
$
1,730,630

 
$
5.44

 
$
12.72

 
 
 
 
 
 
 
 
 
 
4th Quarter 2015
 
104

 
19,074,687

 
261,757

 
4.2

 
2,791,781

 
10.67

 
15.64

 
 
 
 
 
 
 
 
 
 
3rd Quarter 2015
 
111

 
18,251,913

 
275,224

 
3.7

 
1,485,479

 
5.40

 
15.21

 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
117

 
15,978,116

 
268,145

 
3.2

 
1,408,031

 
5.25

 
14.33

 
 
 
 
 
 
 
 
 
 
Total - 12 months
 
454

 
$
70,289,685

 
1,123,281

 
3.9

 
$
7,415,921

 
$
6.60

 
$
14.39

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2016
 
42

 
$
8,334,925

 
136,982

 
4.8

 
$
1,454,088

 
$
10.62

 
$
11.09

 
 
 
 
 
 
 
 
 
 
4th Quarter 2015
 
48

 
11,136,442

 
132,749

 
5.2

 
2,439,620

 
18.38

 
14.00

 
 
 
 
 
 
 
 
 
 
3rd Quarter 2015
 
55

 
10,130,615

 
143,447

 
4.4

 
1,203,327

 
8.39

 
14.63

 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
40

 
8,088,769

 
109,179

 
5.1

 
1,102,300

 
10.10

 
13.59

 
 
 
 
 
 
 
 
 
 
Total - 12 months
 
185

 
$
37,690,751

 
522,357

 
4.9

 
$
6,199,335

 
$
11.87

 
$
13.32

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Renewal
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1st Quarter 2016
 
80

 
$
8,650,044

 
181,173

 
2.9

 
$
276,542

 
$
1.53

 
$
13.95

 
 
 
 
 
 
 
 
 
 
4th Quarter 2015
 
56

 
7,938,245

 
129,008

 
3.1

 
352,161

 
2.73

 
17.32

 
 
 
 
 
 
 
 
 
 
3rd Quarter 2015
 
56

 
8,121,298

 
131,777

 
3.4

 
282,152

 
2.14

 
15.84

 
 
 
 
 
 
 
 
 
 
2nd Quarter 2015
 
77

 
7,889,347

 
158,966

 
2.7

 
305,731

 
1.92

 
14.83

 
 
 
 
 
 
 
 
 
 
Total - 12 months
 
269

 
$
32,598,934

 
600,924

 
3.0

 
$
1,216,586

 
$
2.02

 
$
15.32

 
 
 
 
 
 
 
 
 
 

(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 lease term 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.


21

Whitestone REIT and Subsidiaries
LEASE EXPIRATIONS(1) 

 
 
 
 
 
 
 
 
Annualized Base Rent(2)
 
 
 
 
Gross Leasable Area
 
as of March 31, 2016
Year
 
Number of
Leases
 
Square Feet
 
Percent
of Gross Leasable Area
 
Amount
(in thousands)
 
Percent of
Total
 
Per Square Foot
2016
 
310

 
795,788

 
13.5
%
 
$
10,355

 
13.6
%
 
$
13.01

2017
 
286

 
796,426

 
13.5
%
 
12,428

 
16.3
%
 
15.60

2018
 
252

 
842,343

 
14.3
%
 
13,124

 
17.2
%
 
15.58

2019
 
207

 
594,075

 
10.1
%
 
10,101

 
13.3
%
 
17.00

2020
 
157

 
698,913

 
11.9
%
 
9,987

 
13.1
%
 
14.29

2021
 
106

 
392,121

 
6.7
%
 
5,807

 
7.6
%
 
14.81

2022
 
48

 
303,243

 
5.2
%
 
3,899

 
5.1
%
 
12.86

2023
 
28

 
189,753

 
3.2
%
 
2,135

 
2.8
%
 
11.25

2024
 
26

 
188,295

 
3.2
%
 
2,813

 
3.7
%
 
14.94

2025
 
21

 
66,352

 
1.1
%
 
1,394

 
1.8
%
 
21.01

Total
 
1,441

 
4,867,309

 
82.7
%
 
$
72,043

 
94.5
%
 
$
14.80


(1) 
Lease expirations table reflects rents in place as of March 31, 2016, and does not include option periods.

(2) 
Annualized Base Rent represents the monthly base rent as of March 31, 2016 for each tenant multiplied by 12.


22

Whitestone REIT and Subsidiaries
2016 Financial Guidance
 
 
 
 
 
2016 Guidance
FFO Core per common share and OP unit - diluted
 
$1.33 - $1.39
FFO per common share and OP unit - diluted
 
$1.06 - $1.12
Same Store Property NOI
 
3% - 5%
Total Operating Portfolio Occupancy at Year End
 
89% - 91%


Note: Guidance reflects management’s view of current and future market conditions, as well as the earnings impact of events referenced in our earnings release and supplemental data package. This guidance does not include the operational or capital impact of any future unannounced acquisition or disposition activity. We will update our guidance, on a quarterly basis, or more often as needed, reflecting the impact of acquisition volume and other factors.



23


Reconciliation of NAREIT FFO and FFO Guidance to Net Income
(per diluted share and OP Unit)
 
 
 
 
 
Funds from Operations Guidance:
 
2016 Guidance
Net income attributable to Whitestone REIT
 
$
0.43

 
$
0.49

 
 
 
 
 
Adjustments to reconcile net income to NAREIT FFO:
 
 
 
 
Depreciation expense, amortization, gain on disposal of assets
 
0.63

 
0.63

    NAREIT FFO
 
$
1.06

 
$
1.12

 
 
 
 
 
Adjustments to reconcile net income to NAREIT FFO to FFO Core:
 
 
 
 
Development and acquisition pursuit costs
 
0.27

 
0.27

     FFO Core
 
$
1.33

 
$
1.39


Whitestone REIT and Subsidiaries
Property Details
As of March 31, 2016

 
 
Community Name
 
 
 
Location
 
 
Year Built/
Renovated
 
Gross Leasable
Square Feet
 
Percent
Occupied at
3/31/2016
 
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

 
92
%
 
$
918

 
$
13.73

 
$
13.24

Anthem Marketplace
 
Phoenix
 
2000
 
113,293

 
94
%
 
1,644

 
15.44

 
15.87

Bellnott Square
 
Houston
 
1982
 
73,930

 
43
%
 
316

 
9.94

 
10.22

Bissonnet Beltway
 
Houston
 
1978
 
29,205

 
92
%
 
351

 
13.06

 
12.80

Centre South
 
Houston
 
1974
 
39,134

 
67
%
 
215

 
8.20

 
8.43

The Citadel
 
Phoenix
 
2013
 
28,547

 
95
%
 
383

 
14.12

 
16.37

City View Village
 
San Antonio
 
2005
 
17,870

 
100
%
 
510

 
28.54

 
28.76

Corporate Park Woodland II
 
Houston
 
1972
 
16,220

 
95
%
 
223

 
14.47

 
14.47

Desert Canyon
 
Phoenix
 
2000
 
62,533

 
90
%
 
739

 
13.13

 
13.56

Fountain Hills Plaza
 
Phoenix
 
2009
 
111,289

 
88
%
 
1,647

 
16.82

 
17.43

Fountain Square
 
Phoenix
 
1986
 
118,209

 
89
%
 
1,550

 
14.73

 
15.75

Fulton Ranch Towne Center
 
Phoenix
 
2005
 
113,281

 
86
%
 
1,767

 
18.14

 
18.48

Gilbert Tuscany Village
 
Phoenix
 
2009
 
49,415

 
88
%
 
772

 
17.75

 
17.94

Heritage Trace Plaza
 
Dallas
 
2006
 
70,431

 
100
%
 
1,498

 
21.27

 
22.11

Holly Knight
 
Houston
 
1984
 
20,015

 
85
%
 
327

 
19.22

 
18.40

Headquarters Village
 
Dallas
 
2009
 
89,134

 
98
%
 
2,287

 
26.18

 
29.09

Keller Place
 
Dallas
 
2001
 
93,541

 
93
%
 
890

 
10.23

 
11.00

Kempwood Plaza
 
Houston
 
1974
 
101,008

 
92
%
 
856

 
9.21

 
9.60

Lion Square
 
Houston
 
2014
 
117,592

 
86
%
 
1,088

 
10.76

 
11.55

The Marketplace at Central
 
Phoenix
 
2012
 
111,130

 
98
%
 
901

 
8.27

 
8.39

Market Street at DC Ranch
 
Phoenix
 
2003
 
242,459

 
91
%
 
4,036

 
18.29

 
19.72

Mercado at Scottsdale Ranch
 
Phoenix
 
1987
 
118,730

 
67
%
 
1,569

 
19.72

 
20.14

Paradise Plaza
 
Phoenix
 
1983
 
125,898

 
92
%
 
1,601

 
13.82

 
14.06

Parkside Village North
 
Austin
 
2005
 
27,045

 
100
%
 
781

 
28.88

 
29.88

Parkside Village South
 
Austin
 
2012
 
90,101

 
100
%
 
2,252

 
24.99

 
26.59

Pinnacle of Scottsdale
 
Phoenix
 
1991
 
113,108

 
96
%
 
1,953

 
17.99

 
18.11

Providence
 
Houston
 
1980
 
90,327

 
98
%
 
859

 
9.70

 
9.69

Quinlan Crossing
 
Austin
 
2012
 
109,892

 
96
%
 
2,429

 
23.02

 
24.13

Shaver
 
Houston
 
1978
 
21,926

 
85
%
 
252

 
13.52

 
12.98

Shops at Pecos Ranch
 
Phoenix
 
2009
 
78,767

 
93
%
 
1,460

 
19.93

 
20.71

Shops at Starwood
 
Dallas
 
2006
 
55,385

 
97
%
 
1,593

 
29.65

 
28.89

The Shops at Williams Trace
 
Houston
 
1985
 
132,991

 
95
%
 
1,707

 
13.51

 
14.16

South Richey
 
Houston
 
1980
 
69,928

 
96
%
 
742

 
11.05

 
9.30

Spoerlein Commons
 
Chicago
 
1987
 
41,455

 
82
%
 
658

 
19.36

 
20.33

The Strand at Huebner Oaks
 
San Antonio
 
2000
 
73,920

 
94
%
 
1,449

 
20.85

 
21.85

SugarPark Plaza
 
Houston
 
1974
 
95,032

 
85
%
 
943

 
11.67

 
11.69

Sunridge
 
Houston
 
1979
 
49,359

 
82
%
 
432

 
10.67

 
10.28

Sunset at Pinnacle Peak
 
Phoenix
 
2000
 
41,530

 
90
%
 
581

 
15.54

 
16.29

Terravita Marketplace
 
Phoenix
 
1997
 
102,733

 
94
%
 
1,334

 
13.81

 
13.69

Torrey Square
 
Houston
 
1983
 
105,766

 
83
%
 
732

 
8.34

 
8.49

Town Park
 
Houston
 
1978
 
43,526

 
93
%
 
844

 
20.85

 
20.95

Village Square at Dana Park
 
Phoenix
 
2009
 
323,026

 
90
%
 
5,850

 
20.12

 
20.68

Webster Pointe
 
Houston
 
1984
 
26,060

 
74
%
 
205

 
10.63

 
11.36

Westchase
 
Houston
 
1978
 
49,573

 
70
%
 
462

 
13.31

 
13.05

Williams Trace Plaza
 
Houston
 
1983
 
129,222

 
95
%
 
1,721

 
14.02

 
14.78

Windsor Park
 
San Antonio
 
2012
 
196,458

 
82
%
 
1,836

 
11.40

 
10.95

Total/Weighted Average
 
 
 
 
 
4,002,644

 
89
%
 
57,163

 
16.05

 
16.54

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Office Communities:
 
 
 
 
 
  
 
 
 
  
 
  
 
 
9101 LBJ Freeway
 
Dallas
 
1985
 
125,874

 
74
%
 
$
1,394

 
$
14.97

 
$
14.28

Pima Norte
 
Phoenix
 
2007
 
35,110

 
62
%
 
366

 
16.81

 
18.19

Uptown Tower
 
Dallas
 
1982
 
253,981

 
80
%
 
3,592

 
17.68

 
18.02

Woodlake Plaza
 
Houston
 
1974
 
106,169

 
96
%
 
1,723

 
16.91

 
16.09

Total/Weighted Average
 
 
 
 
 
521,134

 
81
%
 
7,075

 
16.76

 
16.65

Office/Flex Communities:
 
 
 
 
 
  
 
 
 
  
 
  
 
 
Corporate Park Northwest
 
Houston
 
1981
 
174,359

 
86
%
 
$
1,811

 
$
12.08

 
$
12.04

Corporate Park West
 
Houston
 
1999
 
175,665

 
85
%
 
1,540

 
10.31

 
10.23

Corporate Park Woodland
 
Houston
 
2000
 
99,937

 
88
%
 
837

 
9.52

 
10.11

Dairy Ashford
 
Houston
 
1981
 
42,902

 
99
%
 
267

 
6.29

 
6.22

Holly Hall Industrial Park
 
Houston
 
1980
 
90,000

 
91
%
 
739

 
9.02

 
8.30

Interstate 10 Warehouse
 
Houston
 
1980
 
151,000

 
99
%
 
724

 
4.84

 
4.71

Main Park
 
Houston
 
1982
 
113,410

 
84
%
 
716

 
7.52

 
7.45

Plaza Park
 
Houston
 
1982
 
105,530

 
54
%
 
525

 
9.21

 
10.27

Westbelt Plaza
 
Houston
 
1978
 
65,619

 
86
%
 
571

 
10.12

 
10.22

Westgate Service Center
 
Houston
 
1984
 
97,225

 
85
%
 
640

 
7.74

 
7.65

Total/Weighted Average
 
 
 
 
 
1,115,647

 
85
%
 
8,370

 
8.83

 
8.83

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total/Weighted Average - Operating Portfolio
 
 
 
 
 
5,639,425

 
88
%
 
72,608

 
14.63

 
14.98

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Davenport Village
 
Austin
 
1999
 
128,934

 
83
%
 
$
2,490

 
$
23.27

 
$
26.06

Gilbert Tuscany Village Hard Corner
 
Phoenix
 
2009
 
14,603

 
—
%
 
—

 
—

 
—

The Promenade at Fulton Ranch
 
Phoenix
 
2007
 
98,792

 
60
%
 
1,077

 
18.17

 
18.02

Total/Weighted Average - Development Portfolio (4)
 
 
 
 
 
242,329

 
68
%
 
3,567

 
21.65

 
23.39

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Anthem Marketplace
 
Phoenix
 
N/A
 
—

 
—

 
$
—

 
$
—

 
$
—

Dana Park Development
 
Phoenix
 
N/A
 
—

 
—

 
—

 
—

 
—

Fountain Hills
 
Phoenix
 
N/A
 
—

 
—

 
—

 
—

 
—

Market Street at DC Ranch
 
Phoenix
 
N/A
 
—

 
—

 
—

 
—

 
—

Pinnacle Phase II
 
Phoenix
 
N/A
 
—

 
—

 
—

 
—

 
—

Shops at Starwood Phase III
 
Dallas
 
N/A
 
—

 
—

 
—

 
—

 
—

Total/Weighted Average - Property Held For Development (5)
 
 
 
 
 
—

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Grand Total/Weighted Average
 
 
 
 
 
5,881,754

 
87
%
 
$
76,175

 
$
14.89

 
$
15.28


(1)   
Calculated as the tenant's actual March 31, 2016 base rent (defined as cash base rents including abatements) multiplied by 12. Excludes vacant space as of March 31, 2016. 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 March 31, 2016 equaled approximately $171,000 for the month ended March 31, 2016.
 
(2)   
Calculated as annualized base rent divided by gross leasable area leased as of March 31, 2016.  Excludes vacant space as of March 31, 2016.

(3) 
Represents (i) the contractual base rent for leases in place as of March 31, 2016, adjusted to 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 of March 31, 2016.

(4) 
Includes (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.

(5) 
As of March 31, 2016, these parcels of land were held for development and, therefore, had no gross leasable area.


24


Whitestone REIT Reports