Whitestone REIT (NYSE:WSR) (“Whitestone” or the “Company”) today
announced that it has filed an investor presentation and has mailed
a letter to shareholders in connection with Whitestone’s upcoming
2018 Annual Meeting of Shareholders (“2018 Annual Meeting”) to be
held on May 17, 2018.
The presentation and other important information related to the
2018 Annual Meeting can be found on the Company’s website at
www.whitestonereit.com.
Highlights of the presentation include:
Whitestone’s Board and management team consistently
deliver shareholder value:
- Whitestone ranked #1 in total shareholder return (“TSR”) among
the 17 U.S. Public Shopping Center REITs in 2017. For the year
ended December 31, 2017, Whitestone achieved TSR rankings of #2 of
16 over a three-year period, and #5 of 15 over a five-year
period1.
- The Company distributed more than $40 million in dividends in
2017 and has paid a consistent dividend per share for 92
consecutive months since its IPO.
- Whitestone continues to generate increases in revenues, gross
assets, net operating income (“NOI”) and funds from
operations.
Whitestone’s Board and management are successfully
executing the Company’s e-commerce resistant business
strategy:
- Whitestone differentiates itself through its focus on
neighborhood and community shopping centers and limited exposure to
top retail power centers, allowing the Company to resist disruption
from e-commerce.
- The Company’s shopping centers meet neighborhood consumer needs
for local necessities and services such as specialty retail,
grocery, restaurants and medical, educational and financial
services.
- Whitestone’s goal is to become a leading provider of these
services within the fastest growing cities in business-friendly
states by acquiring, developing, redeveloping and operating
Community Centered Properties® in neighborhoods with high household
incomes.
Whitestone has the right Board in place to continue
advancing the Company’s strategy while focusing on the interests of
all shareholders:
- The Whitestone Board is proud of its gender, ethnic, age,
cognitive and professional diversity.
- Trustees come from a wide range of professional backgrounds,
reflecting the carefully considered mix of appropriate skills and
experience needed to deliver superior shareholder value.
- The Board includes current and former C-Level executives and
six out of seven independent trustees – four having previously
served on other public company boards.
- The recent additions of Nandita Berry, Najeeb Khan and David
Taylor as trustees bring new perspectives and freshen and
strengthen an already robust Board.
- Also, the Board’s Compensation Committee has adopted practices
that ensure executive compensation policies are aligned with
shareholder interests and Named Executive Officer (“NEO”)
compensation is in-line with Whitestone’s peers.
In contrast, KBS Strategic Opportunity REIT (“KBS”) has
nominated candidates who we view as weak, less qualified and not
independent of KBS, and in Whitestone’s opinion, mischaracterized
the facts to distract and mislead the Company’s
shareholders:
- KBS has nominated two trustee candidates who we believe are
underqualified, bring no additive value to the Whitestone Board,
and are deeply entwined with KBS.
- KBS’s affiliated external advisor has a track record of not
delivering value for its own investors relative to publicly-traded
peer companies and has not even delivered liquidity to its
shareholders – all the while paying itself over $700 million in
fees.
- KBS has failed to articulate a strategic plan for Whitestone.
KBS has not offered any actionable ideas or given
any compelling rationale to warrant representation on Whitestone’s
Board.
Whitestone’s Board unanimously recommends that shareholders vote
“FOR” ALL of Whitestone’s trustee
nominees listed on the WHITE proxy card.
The full text of the letter is as follows:
April 24, 2018
Dear Fellow Shareholder,
Whitestone’s 2018 Annual Meeting of Shareholders is rapidly
approaching, and your vote is critical to the future of the
Company, no matter how many shares you own. The Board of
Trustees unanimously recommends that you vote “FOR” the re-election
of ALL of Whitestone’s highly qualified trustee nominees on the
WHITE proxy card today.
KBS HAS MISCHARACTERIZED THE FACTS TO DISTRACT AND
CONFUSE SHAREHOLDERS
KBS Strategic Opportunity REIT (“KBS”), an externally managed,
non-traded real estate investment trust (“REIT”), is waging what we
believe is a self-serving proxy contest in an effort to replace
Whitestone’s highly qualified trustees with individuals who lack
relevant experience and who have other business ties to KBS. We are
writing this letter to provide you with facts that dispel KBS’s
mischaracterizations, as well as more detail regarding the value
that the Board and management team are creating for all Whitestone
shareholders.
KBS has alleged that Whitestone’s executive compensation
is too high
Whitestone’s executive compensation policies are aligned with
shareholder interests and Named Executive Officer (“NEO”)
compensation is in-line with Whitestone’s peers.
The Board’s Compensation Committee:
- Intentionally structured executive compensation to be weighted
toward equity with a low cash component so our NEOs are aligned
with other shareholders in seeking stability of cash flows and
dividends and appreciation in your and their investment over a
long-term investment period;
- Did not increase the Chief Executive Officer (“CEO”) and Chief
Financial Officer (“CFO”) base salaries in 2017 for the fourth
consecutive year;
- Did not pay bonuses for the CEO and CFO for the fourth
consecutive year;
- Added a performance component in 2017 to further link NEO
compensation to shareholder value creation; and
- Reduced 2017 award fair values for the CEO and CFO by
approximately 70% from the 2016 grant fair value.
NEO compensation has been reduced significantly and is
aligned with peers
Whitestone’s NEOs have never sold any Whitestone shares other
than to return vested shares to the Company to pay for taxes.
A photo accompanying this announcement is available at
http://resource.globenewswire.com/Resource/Download/009b88d7-847e-4425-960d-2894d44cf9c7.
KBS has alleged that WHITESTONE’S G&A expenses are
too high
The Board regularly analyzes our cost structure to ensure it is
appropriately sized for long-term shareholder value creation.
Whitestone has the smallest average lease and shortest lease
term for 2017 signed leases among publicly traded shopping center
REITs. Because our strategy focuses on smaller, non-traditional
tenants and shorter term leases, our G&A reflects the
operational intensity and incremental costs related to servicing a
large population of small tenants and handling a significant number
of leasing transactions relative to our size. Whitestone has
achieved attractive revenue and NOI growth over the past five years
by successfully executing its strategy.
A photo accompanying this announcement is available at
http://resource.globenewswire.com/Resource/Download/78b8e061-1412-49d9-b103-2f810bc1acf4.
Looking ahead, your Board and management team recently adopted
new long-term goals for 2023, which include targeting an improved
G&A expense-to-revenue ratio range of 8 to 10 percent of
revenue by scaling the Company’s operating infrastructure over a
larger base of revenue and assets. Our 2023 goals will be in-line
with our REIT peers.
A photo accompanying this announcement is available at
http://resource.globenewswire.com/Resource/Download/f262b92e-55da-4647-a804-800ca2c2789b.
KBS’S EXTERNAL ADVISOR HAS A POOR INVESTMENT RECORD AND
THE ELECTION OF KBS’S NOMINEES RISKS DESTROYING VALUE FOR ALL
WHITESTONE SHAREHOLDERS
KBS’s affiliated external advisor has a track record of not
delivering value for its own investors relative to publicly-traded
peer companies.
KBS’s external advisor is a sponsor of several non-traded REITs
(“NTRs”) with high cost external management structures. All
KBS-sponsored NTRs have underperformed relative to publicly-traded
investment alternatives. KBS’s external advisor has failed to
deliver liquidity to shareholders of any of its NTRs via a listing
on a national securities exchange or merger with a publicly-traded
REIT. Despite underperforming its publicly-traded REIT peers, KBS
and its affiliate NTRs have paid KBS’s external advisor over $700
million in fees – in addition to reimbursing the external advisor’s
overhead and other expenses.
In sharp contrast, Whitestone has made tremendous strides both
financially and operationally to generate attractive returns for
investors. In 2017, Whitestone distributed more than $40 million in
dividends and ranked #1 in total shareholder return among the 17
U.S. Public Shopping Center REITs2. We believe our high quality
properties, simple capital structure, forward-thinking strategy and
well-aligned business model and infrastructure will allow us to
continue to grow profitably and generate sustainable, long-term
shareholder value.
KBS HAS FAILED TO ARTICULATE A STRATEGIC PLAN FOR
WHITESTONE
The Whitestone Board and management team are receptive to ideas
from shareholders that may help drive profitable growth and enhance
shareholder value. Since KBS’s investment in Whitestone, we have
sought to maintain an open dialogue and held discussions with
representatives of KBS. However, KBS has not offered any actionable
ideas or given any compelling rationale to warrant representation
on Whitestone’s Board. Neither of KBS’s nominees possesses retail
real estate experience comparable to Whitestone’s trustees, they
are not familiar with Whitestone’s target markets and they have
never operated or invested in retail real estate in Whitestone’s
markets. KBS’s nominees have articulated no business or operating
strategy and, in our view, would add no value to Whitestone or the
Company’s ongoing strategic initiatives.
We believe that Whitestone has the right strategy to create
long-term shareholder value in a rapidly changing environment for
retail real estate and is well-positioned to capitalize on the
opportunities ahead. We are actively engaged in overseeing the
Company’s successful investment strategy and have the experience
and oversight to ensure Whitestone continues to achieve and surpass
its objectives. The Board and management team are active, engaged
and implementing the Company’s strategic plan to continue
delivering financial and operational growth.
PROTECT THE VALUE OF YOUR INVESTMENT AND
DIVIDENDS;VOTE THE WHITE PROXY CARD TODAY “FOR”
ALL OF WHITESTONE’S TRUSTEE NOMINEES
We urge you to support your Board, which is working hard on
behalf of all shareholders to build on the Company’s track record
of sustainable shareholder value creation. A vote on the
WHITE proxy card is a vote to protect your
investment, including your
dividends.
Please refer to the enclosed WHITE proxy card for
information on how to vote by telephone or by Internet, or simply
sign and date the WHITE proxy card and return it in the
postage-paid envelope provided and vote “FOR” all of Whitestone’s
trustee nominees. If you have any questions, or
need assistance in voting your shares, please call our proxy
solicitor, Innisfree M&A Incorporated, toll-free at
877-750-0502. |
Thank you for your continued support.
Sincerely,
James C. MastandreaChairman and CEO
About Whitestone REIT
Whitestone is a community-centered retail REIT that acquires,
owns, manages, develops and redevelops high quality "e-commerce
resistant" neighborhood, community and lifestyle retail centers
principally located in the largest, fastest-growing and most
affluent markets in the Sunbelt. Whitestone's mix of national,
regional and local tenants provides daily necessities, needed
services and entertainment not typically readily available online
to their respective communities. Whitestone's properties are
primarily located in business-friendly Phoenix, Austin, Dallas-Fort
Worth, Houston and San Antonio, which are among the fastest growing
U.S. population centers with highly educated workforces, high
household incomes and strong job growth. Visit
www.whitestonereit.com for additional information.
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,” “goals” or similar words or
phrases that are predictions of future events or trends and which
do not relate solely to historical matters.
The following are 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 long-term goals, 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; its ability to
successfully identify, finance and consummate suitable
acquisitions, and the impact of such acquisitions, including
financing developments, capitalization rates and internal rate of
return; the Company’s ability to reduce or otherwise effectively
manage its general and administrative expenses, including in
connection with the recent proposed nomination of trustees by a
shareholder of the Company; the Company’s ability to fund from cash
flows or otherwise distributions to its shareholders at current
rates or at all; current adverse market and economic conditions;
lease terminations or lease defaults; the impact of competition on
the Company's efforts to renew existing leases; changes in the
economies and other conditions of the specific markets in which the
Company operates; economic, legislative and regulatory changes,
including the impact of the Tax Cuts and Jobs Act of 2017; the
success of the Company's real estate strategies and investment
objectives; the Company's ability to continue to qualify as a REIT
under the Internal Revenue Code of 1986, as amended; and other
factors detailed in the Company's most recent Annual Report on Form
10-K, Quarterly Reports on Form 10-Q and other documents the
Company files with the Securities and Exchange Commission (“SEC”)
from time to time.
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.
Additional Information
Whitestone REIT has filed a definitive proxy statement on
Schedule 14A and form of associated WHITE proxy
card with the SEC in connection with the solicitation of proxies
for its 2018 Annual Meeting (the “Definitive Proxy Statement”).
Whitestone REIT, its trustees and its executive officers and
Innisfree M&A Incorporated on their behalf will be participants
in the solicitation of proxies from Company shareholders in
connection with the matters to be considered at the 2018 Annual
Meeting. Information regarding the names of the Company’s trustees
and executive officers and their ownership in the Company’s common
shares and other securities is set forth in the Definitive Proxy
Statement. Details concerning the nominees of the Company’s Board
of Trustees for election at the 2018 Annual Meeting are included in
the Definitive Proxy Statement. BEFORE MAKING ANY VOTING DECISION,
SHAREHOLDERS OF THE COMPANY ARE URGED TO READ ALL RELEVANT
DOCUMENTS FILED WITH OR FURNISHED TO THE SEC, INCLUDING THE
COMPANY’S DEFINITIVE PROXY STATEMENT AND ANY SUPPLEMENTS THERETO
AND ACCOMPANYING WHITE PROXY CARD, BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION. Shareholders can obtain a copy
of the Definitive Proxy Statement, any amendments or supplements
thereto and other documents filed by the Company with the SEC for
no charge at the SEC’s website at www.sec.gov. Copies will also be
available at no charge at the Company’s website at
www.whitestonereit.com.
Whitestone REIT Contacts:
Investors Contact:
Kevin Reed, Director of Investor RelationsWhitestone REIT(713)
435-2219ir@whitestonereit.com
Media Contact: Joele Frank, Wilkinson Brimmer
KatcherAndrew Siegel / Amy Feng / Dan Moore(212) 355-4449
__________________________
1 Per S&P Global Market Intelligence, total shareholder
return is defined as share price change plus re-invested
dividends. Peers include Acadia Realty Trust, Brixmor
Property Group Inc., Cedar Realty Trust Inc., DDR Corp., Federal
Realty Investment Trust, Kimco Realty Corp., Kite Realty Group
Trust, Ramco-Gershenson Properties Trust, Regency Centers Corp.,
Retail Opportunity Investments Corp., Retail Properties of America,
Inc., Saul Centers Inc., Urban Edge Properties, Urstadt Biddle
Properties Inc., Weingarten Realty Investors, and Wheeler REIT
Inc., excluding any such peer which was not a public company for
the entirety of the applicable TSR period.
2 Total shareholder return is defined as share price change
plus re-invested dividends. Peers include Acadia Realty
Trust, Brixmor Property Group Inc., Cedar Realty Trust Inc., DDR
Corp., Federal Realty Investment Trust, Kimco Realty Corp., Kite
Realty Group Trust, Ramco-Gershenson Properties Trust, Regency
Centers Corp., Retail Opportunity Investments Corp., Retail
Properties of America, Inc., Saul Centers Inc., Urban Edge
Properties, Urstadt Biddle Properties Inc., Weingarten Realty
Investors, and Wheeler REIT Inc., excluding any such peer which was
not a public company for the entirety of the applicable TSR
period.
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