-Upsized Credit Facility to $515
Million--Successful Inaugural Private Placement of $100 Million of
Senior Unsecured Notes--Reaffirms 2019 Full Year Guidance-
Whitestone REIT (NYSE: WSR) (“Whitestone” or the “Company”) today
announced operating and financial results for the first quarter
ended March 31, 2019. Whitestone is a pure-play
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 optimal mix of national, regional and
local tenants provides daily necessities, needed services and
entertainment to the communities in which they are located.
Whitestone is a pure-play 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 optimal mix of national, regional and local tenants
provides daily necessities, needed services and entertainment to
the communities in which they are located.
Highlights*
*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.First Quarter
2019 Compared to First Quarter 2018:
- Net income attributable to Whitestone REIT was $2.8 million, or
$0.07 per share, compared to $3.2 million, or $0.08 per share
- Annualized Base Rent (“ABR”) per Leased Squared Foot Grows 5.8%
to $19.58
- 2.4% same store NOI growth
- Funds from Operations (“FFO”) reach $9.9 million or $0.24 per
share versus $10.1 million or $0.24 per share
- 8.4% increase in rental rates on new and renewal leases on a
GAAP basis (trailing twelve months)
Jim Mastandrea, Chairman and Chief Executive Officer of
Whitestone REIT commented, “Our team has delivered a positive start
to 2019 producing growth in most of
our key financial metrics. Our e-commerce
resistant model generated a strong increase in same
store NOI as we worked to
reinvigorate occupancy growth. We also strengthened our
capital structure and financial flexibility with
the successful closing and upsizing of our credit
facility to $515,000,000 and the placement of our first
private bond issuance of $100,000,000. While
our cycle-tested experience and business model, focusing on
high growth markets, may hit some road bumps from time to time, it
provides stability and predictability to achieve our long-term
goals. We have confidence that our high quality properties in
strong growth markets, management team, and business model will
continue to produce improving financial results as we move forward
to create additional value for all Whitestone
shareholders.”
Financial
ResultsReconciliations of Net Income to FFO and FFO Core
are included herein.Net Income attributable to Whitestone REIT was
$2.8 million, or $0.07 per share, for the first quarter of 2019,
compared to $3.2 million, or $0.08 per share, for the same period
in 2018. FFO was $9.9 million, or $0.24 per share, for the first
quarter of 2019, compared to $10.1 million, or $0.24 per share, for
the same period in 2018. FFO Core was $11.8 million, or $0.28 per
share, in the first quarter of 2019, compared to $12.7 million, or
$0.31 per share, in the same period of 2018.
Operating ResultsFor the period ending March
31, 2019, the Company’s operating highlights were as follows:
| |
|
| |
Q1-2019 |
|
Occupancy: |
|
| Wholly Owned
Properties |
90.1% |
| Same Store Property Net
Operating Income Growth |
2.4% |
| Rental Rate Growth -
Total (comparable leases, GAAP Basis): |
7.2% |
| New
Leases |
9.3% |
| Renewal
Leases |
7.0% |
| |
|
| Leasing
Transactions: |
|
| Number of New
Leases |
27 |
| New Leases - Total term
revenue (millions) |
$3.5 |
| Number of Renewal
Leases |
54 |
| Renewal Leases
- Total term revenue (millions) |
$12.3 |
| |
|
Real Estate Portfolio
Update
Community Centered
Properties™ Portfolio Statistics:
As of March 31, 2019, Whitestone wholly owned 51
Community Centered Properties™ with 4.8 million square feet of
gross leasable area (“GLA”). The portfolio is comprised of 29
properties in Texas, 27 in Arizona and one in Illinois.
Whitestone’s Retail Community Centered Properties™ are located
in Austin (4), San Antonio (3), Chicago (1), Dallas-Fort Worth (7),
Houston (15) and the greater Phoenix metropolitan area (27). 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. 2017 estimates showed the projected 5-year
population growth rates for both Austin and Dallas-Fort Worth to be
9.7%, San Antonio to be 8.6%, Houston to be 8.0%, and Phoenix to be
6.6% (1). The Company’s retail properties in these markets are
located on the best retail corners embedded in affluent
communities. The Company also owns an equity interest in and
manages 11 properties containing 1.3 million square feet of GLA
through its investment in Pillarstone OP.
At the end of the first quarter, the Company’s
diversified tenant base was comprised of approximately 1,344
tenants, with the largest tenant accounting for only 2.9% of
annualized base rental revenues. Lease terms range from less than
one year for smaller tenants to over 15 years for larger tenants.
The Company’s 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 of 2019, the leasing team signed 81 leases totaling
199,643 square feet in new, expansion and renewal leases, compared
to 93 leases totaling 230,983 square feet in the first quarter of
2018. The total lease value was $15.8 million compared to $24.5
million during the same period last year.
The Company’s total operating portfolio
occupancy stood at 90.1% at quarter end compared to 90.9% at the
end the first quarter 2018.
Balance Sheet and Liquidity
Balance Sheet:
Reflecting the Company’s acquisition and
disposition activity during the year and selective development and
redevelopment, undepreciated real estate assets increased $2.9
million to $1.055 billion at March 31, 2019 compared to $1.052
billion at March 31, 2018.
Liquidity, Debt and Credit
Facility:
On January 31, 2019, the Company closed through
its operating partnership, Whitestone REIT Operating Partnership,
L.P. (the “Operating Partnership”), a new unsecured credit facility
(the “2019 Facility”). The 2019 Facility increased the credit
facility to $515 million from $500 million, improved the
capitalization rate for the majority of its properties from 7.5% to
7% and reduced overall pricing at the current corporate leverage
level by 28 basis points. The 2019 Facility is comprised of
the following three tranches:
- $250.0 million unsecured revolving credit facility with a
maturity date of January 1, 2023;
- $165.0 million unsecured term loan with a maturity date of
January 31, 2024; and
- $100.0 million unsecured term loan with a maturity date of
October 30, 2022.
On March 22, 2019, the Company and its Operating
Partnership, entered into a Note Purchase and Guarantee Agreement
together with certain subsidiary guarantors and The Prudential
Insurance Company of America providing for the issuance and sale of
$100 million of senior unsecured notes of the Operating
Partnership, of which (i) $50 million are designated as 5.09%
Series A Senior Notes due March 22, 2029 and (ii) $50 million are
designated as 5.17% Series B Senior Notes due March 22, 2029.
At March 31, 2019, 49 of the Company’s
wholly-owned 57 properties were unencumbered by mortgage debt, with
an undepreciated cost basis of $759.2 million. At March 31, 2019,
the Company had total real estate debt of $623.3 million, of which
approximately 86% 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 4.08% and the weighted average
remaining term was 6.0 years.
(1) Source: Claritas, as of April
2017.
At quarter end, Whitestone had $4.6 million of
cash available on its balance sheet and $164.0 million of available
capacity under its credit facility.
Dividend
On March 25, 2019, the Company declared a
quarterly cash distribution of $0.285 per common share and OP unit
for the second quarter of 2019, to be paid in three equal
installments of $0.095 in April, May and June of 2019.
2019 Guidance
The Company reaffirms its previously released
guidance for 2019 and expects Net income attributable to Whitestone
REIT (per share) to be in the range of $0.21 - $0.25; FFO (per
share) as defined by NAREIT to be in the range of $0.90 -
$0.94; FFO Core as defined by the Company to be in the range of
$1.06 - $1.10; and Same Store NOI growth to be in the range
of 0.5% - 2%.
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,
May 2, 2019 at 10:00 A.M. Central 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: |
(866) 548-4713 |
| Dial-in number for international
participants: |
(323) 794-2093 |
The conference call will be recorded and a telephone replay will
be available through Thursday, May 16, 2019. Replay access
information is as follows:
| Replay number for domestic participants: |
(844) 512-2921 |
| Replay number for international
participants: |
(412) 317-6671 |
| Passcode (for all participants): |
2847697 |
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.
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.
Financial Statement Presentation
Change
On January 1, 2019, the Company adopted the
accounting framework for leases, ASU No. 2016-02, Leases (“Topic
842”). The following is a summary of the presentation changes
within the 2019 Consolidated Statement of Operations required by
the modified retrospective adoption of the new standard:
- All income related to tenant leases
is reflected in a single “Rental” line item.
- The impact of bad debt is now a
component of the single Rental income line item and is no longer a
component of Operating and Maintenance expenses. This change is
reflected in 2019 reporting periods but has not been made to 2018
historical results.
- Real estate taxes paid by certain
major tenants directly to the taxing authority are no longer
reflected in Rental Income and Real estate tax expense. This
change is reflected in 2019 reporting periods but has not been made
to 2018 historical results.
Supplemental footnote support has been provided
herein for comparability purposes. The Company’s Net income, Net
operating income and Operating FFO were not impacted by these
presentation changes.
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 optimal mix of
national, regional and local tenants provides daily necessities,
needed services and entertainment to the communities in which they
are located. 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. Whitestone’s forward-thinking business model has
produced industry leading compound annual growth rates in excess of
15% in revenues, property net operating income, funds from
operations and net income since its IPO in 2010. For additional
information, 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,” “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 rates of
return; the Company’s ability to reduce or otherwise effectively
manage its general and administrative expenses; the Company’s
ability to fund from cash flows or otherwise distributions to its
shareholders at current rates or at all; current adverse market and
economic conditions; 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, 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; risks relating to the restatement of our
consolidated financial statements for the first three quarterly
periods of 2018 and related legal proceedings; and other factors
detailed in the Company’s most recent Annual Report on Form 10-K,
and other documents the Company files with the Securities and
Exchange Commission 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.
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
depreciation and amortization related to real estate, gains or
losses from the sale of certain real estate assets, gains and
losses from change in control, and impairment write-downs of
certain real estate assets and investments in entities when the
impairment is directly attributable to decreases in the value of
depreciable real estate held be the entity. FFO does not represent
cash flows from operating activities determined in accordance with
GAAP and should not be considered an alternative to net income as
an indication of the Company’s performance or to cash flow from
operations as a measure of liquidity or ability to make
distributions and service debt.
Management considers FFO a useful additional
measure of performance for an equity REIT because it facilitates an
understanding of the operating performance of its properties
without giving effect to real estate depreciation and amortization,
which assumes that the value of real estate assets diminishes
predictably over time. Since real estate values have historically
risen or fallen with market conditions, management believes that
FFO provides a more meaningful and accurate indication of the
Company’s performance and useful information for the investment
community to compare Whitestone to other REITs since FFO is
generally recognized as the industry standard for reporting the
operations of REITs.
Other REITs may use different methodologies for
calculating FFO, and accordingly, the Company’s FFO may not be
comparable to other REITs. The Company presents FFO per diluted
share calculations that are based on the outstanding dilutive
common shares plus the outstanding OP units for the periods
presented.
FFO Core: 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.
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.
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), adjustments for unconsolidated real estate
partnership and general and administrative expenses. Management
believes that EBITDA provides useful information to the investment
community about the Company’s operating performance when compared
to other REITs since EBITDA is generally recognized as a standard
measure. However, EBITDA should not be viewed as a measure of the
Company’s overall financial performance since it does not reflect
depreciation and amortization, involuntary conversion, interest
expense, provision for income taxes, gain or loss on sale or
disposition of assets and the level of capital expenditures and
leasing costs necessary to maintain the operating performance of
the Company’s properties. Other REITs may use different
methodologies for calculating EBITDA and, accordingly, the
Company’s EBITDA may not be comparable to other REITs.
Whitestone REIT
Contacts:Investors Contact:Kevin Reed,
Director of Investor RelationsWhitestone REIT(713)
435-2219ir@whitestonereit.com
| |
|
| Whitestone REIT and Subsidiaries |
|
| CONSOLIDATED BALANCE SHEETS |
|
| (in thousands, except per share
data) |
|
| |
|
|
| |
March 31, 2019 |
|
December 31, 2018 |
|
| |
(unaudited) |
|
| ASSETS |
|
| Real estate assets, at
cost |
|
|
Property |
|
$ |
1,054,889 |
|
|
$ |
1,052,238 |
|
|
|
Accumulated depreciation |
|
|
(119,288 |
) |
|
|
(113,300 |
) |
|
| Total
real estate assets |
|
|
935,601 |
|
|
|
938,938 |
|
|
| Investment in real
estate partnership |
|
|
26,138 |
|
|
|
26,236 |
|
|
| Cash and cash
equivalents |
|
|
4,580 |
|
|
|
13,658 |
|
|
| Restricted cash |
|
|
100 |
|
|
|
128 |
|
|
| Escrows and acquisition
deposits |
|
|
6,386 |
|
|
|
8,211 |
|
|
| Accrued rents and
accounts receivable, net of allowance for doubtful accounts |
|
|
22,746 |
|
|
|
21,642 |
|
|
| Receivable due from
related party |
|
|
965 |
|
|
|
394 |
|
|
| Financed receivable due
from related party |
|
|
5,661 |
|
|
|
5,661 |
|
|
| Unamortized lease
commissions and loan costs |
|
|
9,228 |
|
|
|
6,698 |
|
|
| Prepaid expenses and
other assets(1) |
|
|
7,250 |
|
|
|
7,306 |
|
|
| Total
assets |
|
$ |
1,018,655 |
|
|
$ |
1,028,872 |
|
|
| LIABILITIES AND EQUITY |
|
| Liabilities: |
|
|
|
|
|
| Notes
payable |
|
$ |
622,918 |
|
|
$ |
618,205 |
|
|
| Accounts
payable and accrued expenses(2) |
|
|
29,650 |
|
|
|
33,729 |
|
|
| Payable
due to related party |
|
|
204 |
|
|
|
58 |
|
|
| Tenants'
security deposits |
|
|
6,213 |
|
|
|
6,130 |
|
|
| Dividends
and distributions payable |
|
|
11,617 |
|
|
|
11,600 |
|
|
| Total
liabilities |
|
|
670,602 |
|
|
|
669,722 |
|
|
| 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, 2019 and December 31,
2018, respectively |
|
|
— |
|
|
|
— |
|
|
| Common
shares, $0.001 par value per share; 400,000,000 shares authorized;
39,828,745 and 39,778,029 issued and outstanding as of March 31,
2019 and December 31, 2018, respectively |
|
|
40 |
|
|
|
39 |
|
|
|
Additional paid-in capital |
|
|
528,815 |
|
|
|
527,662 |
|
|
|
Accumulated deficit |
|
|
(189,938 |
) |
|
|
(181,361 |
) |
|
|
Accumulated other comprehensive gain |
|
|
726 |
|
|
|
4,116 |
|
|
| Total
Whitestone REIT shareholders' equity |
|
|
339,643 |
|
|
|
350,456 |
|
|
|
Noncontrolling interest in subsidiary |
|
|
8,410 |
|
|
|
8,694 |
|
|
| Total
equity |
|
|
348,053 |
|
|
|
359,150 |
|
|
| Total
liabilities and equity |
|
$ |
1,018,655 |
|
|
$ |
1,028,872 |
|
|
|
|
| Whitestone REIT and Subsidiaries |
|
| CONSOLIDATED BALANCE SHEETS |
|
| (in thousands) |
|
|
|
| |
March 31, 2019 |
|
December 31, 2018 |
|
| |
(unaudited) |
|
| (1) Operating lease
right of use assets (net) (related to adoption of Topic 842) |
|
$ |
914 |
|
|
N/A |
|
|
|
|
|
|
|
|
| (2) Operating lease
liabilities (related to adoption of Topic 842) |
|
$ |
916 |
|
|
N/A |
|
| |
|
|
|
|
|
|
|
| |
|
| Whitestone REIT and Subsidiaries |
|
| CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME |
|
| (unaudited) |
|
| (in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
Revenues |
|
|
|
|
|
|
Rental(1) |
|
$ |
29,033 |
|
|
$ |
29,299 |
|
|
|
Management, transaction, and other fees |
|
|
661 |
|
|
|
486 |
|
|
| Total
revenues |
|
|
29,694 |
|
|
|
29,785 |
|
|
|
|
|
|
|
|
|
| Property
expenses |
|
|
|
|
|
|
Depreciation and amortization |
|
|
6,464 |
|
|
|
6,274 |
|
|
| Operating
and maintenance |
|
|
4,428 |
|
|
|
4,856 |
|
|
| Real
estate taxes |
|
|
4,045 |
|
|
|
3,976 |
|
|
| General
and administrative(2) |
|
|
6,002 |
|
|
|
6,327 |
|
|
| Total
operating expenses |
|
|
20,939 |
|
|
|
21,433 |
|
|
|
|
|
|
|
|
|
| Other expenses
(income) |
|
|
|
|
|
| Interest
expense |
|
|
6,533 |
|
|
|
5,973 |
|
|
| Gain on
sale of properties |
|
|
— |
|
|
|
(249 |
) |
|
| Loss on
sale or disposal of assets |
|
|
2 |
|
|
|
180 |
|
|
| Interest,
dividend and other investment income |
|
|
(245 |
) |
|
|
(257 |
) |
|
| Total
other expense |
|
|
6,290 |
|
|
|
5,647 |
|
|
|
|
|
|
|
|
|
|
Income from operations before equity investments in real
estate partnerships and income tax |
|
|
2,465 |
|
|
|
2,705 |
|
|
|
|
|
|
|
|
|
| Equity in
earnings of real estate partnership |
|
|
492 |
|
|
|
674 |
|
|
| Provision
for income tax |
|
|
(118 |
) |
|
|
(110 |
) |
|
|
|
|
|
|
|
|
| Net
income |
|
|
2,839 |
|
|
|
3,269 |
|
|
|
|
|
|
|
|
|
| Less: Net
income attributable to noncontrolling interests |
|
|
65 |
|
|
|
88 |
|
|
|
|
|
|
|
|
|
| Net income
attributable to Whitestone REIT |
|
$ |
2,774 |
|
|
$ |
3,181 |
|
|
|
|
|
|
|
|
|
| Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (in thousands, except per share
data) |
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
|
2019 |
|
|
|
2018 |
|
|
| Basic Earnings
Per Share: |
|
|
|
|
|
| Net income attributable
to common shareholders, excluding amounts attributable to unvested
restricted shares |
|
$ |
0.07 |
|
|
$ |
0.08 |
|
|
| Diluted
Earnings Per Share: |
|
|
|
|
|
| Net income attributable
to common shareholders, excluding amounts attributable to unvested
restricted shares |
|
$ |
0.07 |
|
|
$ |
0.08 |
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares
outstanding: |
|
|
|
|
|
|
Basic |
|
|
39,649 |
|
|
|
39,066 |
|
|
|
Diluted |
|
|
40,626 |
|
|
|
40,088 |
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Comprehensive
Income |
|
|
|
|
|
|
|
|
|
|
|
|
| Net
income |
|
$ |
2,839 |
|
|
$ |
3,269 |
|
|
|
|
|
|
|
|
|
| Other
comprehensive gain |
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) on cash flow hedging activities |
|
|
(3,470 |
) |
|
|
2,645 |
|
|
|
Unrealized gain on available-for-sale marketable securities |
|
|
— |
|
|
|
18 |
|
|
|
|
|
|
|
|
|
| Comprehensive
income (loss) |
|
|
(631 |
) |
|
|
5,932 |
|
|
|
|
|
|
|
|
|
| Less: Net
income attributable to noncontrolling interests |
|
|
65 |
|
|
|
88 |
|
|
| Less:
Comprehensive gain (loss) attributable to noncontrolling
interests |
|
|
(80 |
) |
|
|
71 |
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss) attributable to Whitestone
REIT |
|
$ |
(616 |
) |
|
$ |
5,773 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (Unaudited) (in
thousands) |
|
|
|
|
|
|
|
|
| (1)
Rental |
|
|
|
|
|
| Rental
revenues |
|
$ |
21,751 |
|
|
$ |
21,672 |
|
|
|
Recoveries |
|
|
7,554 |
|
|
|
7,627 |
|
|
| Bad
debt |
|
|
(272 |
) |
|
N/A |
|
|
| Total
rental |
|
$ |
29,033 |
|
|
$ |
29,299 |
|
|
|
|
|
|
|
|
|
|
(2) Bad debt (prior to adoption of Topic 842) |
|
N/A |
|
|
|
446 |
|
|
| |
|
|
|
|
|
|
|
|
| |
|
| Whitestone REIT and Subsidiaries |
|
| CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
| (unaudited) |
|
| (in thousands) |
|
|
|
|
Three Months Ended |
|
| |
|
March 31, |
|
| |
|
|
2019 |
|
|
|
2018 |
|
|
| Cash flows from
operating activities: |
|
|
|
|
|
| Net
income |
|
$ |
2,839 |
|
|
$ |
3,269 |
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
6,464 |
|
|
|
6,274 |
|
|
|
Amortization of deferred loan costs |
|
|
237 |
|
|
|
302 |
|
|
| Loss on
sale of marketable securities |
|
|
— |
|
|
|
20 |
|
|
| Loss
(gain) on sale or disposal of assets and properties |
|
|
2 |
|
|
|
(69 |
) |
|
| Bad debt
expense |
|
|
272 |
|
|
|
446 |
|
|
|
Share-based compensation |
|
|
1,883 |
|
|
|
1,845 |
|
|
| Equity in
earnings of real estate partnership |
|
|
(492 |
) |
|
|
(674 |
) |
|
| Changes
in operating assets and liabilities: |
|
|
|
|
|
| Escrows
and acquisition deposits |
|
|
1,825 |
|
|
|
2,359 |
|
|
| Accrued
rents and accounts receivable |
|
|
(1,376 |
) |
|
|
(1,115 |
) |
|
|
Receivable due from related party |
|
|
(571 |
) |
|
|
110 |
|
|
|
Distributions from real estate partnership |
|
|
301 |
|
|
|
505 |
|
|
|
Unamortized lease commissions and loan costs |
|
|
775 |
|
|
|
(403 |
) |
|
| Prepaid
expenses and other assets |
|
|
(2,245 |
) |
|
|
437 |
|
|
| Accounts
payable and accrued expenses |
|
|
(4,078 |
) |
|
|
(7,297 |
) |
|
| Payable
due to related party |
|
|
146 |
|
|
|
(980 |
) |
|
| Tenants'
security deposits |
|
|
83 |
|
|
|
72 |
|
|
| Net cash
provided by operating activities |
|
|
6,065 |
|
|
|
5,101 |
|
|
| Cash flows from
investing activities: |
|
|
|
|
|
| Additions
to real estate |
|
|
(2,455 |
) |
|
|
(4,043 |
) |
|
| Proceeds
from sales of properties |
|
|
— |
|
|
|
4,433 |
|
|
| Proceeds
from sales of marketable securities |
|
|
— |
|
|
|
30 |
|
|
| Net cash
provided by (used in) investing activities |
|
|
(2,455 |
) |
|
|
420 |
|
|
| Cash flows from
financing activities: |
|
|
|
|
|
|
Distributions paid to common shareholders |
|
|
(11,301 |
) |
|
|
(11,145 |
) |
|
|
Distributions paid to OP unit holders |
|
|
(264 |
) |
|
|
(309 |
) |
|
| Payments
of exchange offer costs |
|
|
(6 |
) |
|
|
— |
|
|
| Proceeds
from bonds payable |
|
|
100,000 |
|
|
|
— |
|
|
| Net
proceeds from (payments to) credit facility |
|
|
(90,200 |
) |
|
|
9,000 |
|
|
|
Repayments of notes payable |
|
|
(6,202 |
) |
|
|
(578 |
) |
|
| Payments
of loan origination costs |
|
|
(3,981 |
) |
|
|
— |
|
|
|
Repurchase of common shares |
|
|
(762 |
) |
|
|
(466 |
) |
|
| Net cash
used in financing activities |
|
|
(12,716 |
) |
|
|
(3,498 |
) |
|
|
|
|
|
|
|
|
| Net increase (decrease)
in cash, cash equivalents and restricted cash |
|
|
(9,106 |
) |
|
|
2,023 |
|
|
| Cash, cash equivalents
and restricted cash at beginning of period |
|
|
13,786 |
|
|
|
5,210 |
|
|
| Cash, cash equivalents
and restricted cash at end of period |
|
$ |
4,680 |
|
|
$ |
7,233 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Whitestone REIT and Subsidiaries |
|
| CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
| Supplemental Disclosure |
|
| (unaudited) |
|
| (in thousands) |
|
|
|
|
Three Months Ended |
|
|
|
|
March 31, |
|
|
|
|
|
2019 |
|
|
|
2018 |
|
|
| Supplemental
disclosure of cash flow information: |
|
|
|
|
|
| Cash paid
for interest |
|
$ |
6,268 |
|
|
$ |
5,806 |
|
|
| Non cash
investing and financing activities: |
|
|
|
|
|
| Disposal
of fully depreciated real estate |
|
$ |
89 |
|
|
$ |
— |
|
|
| Financed
insurance premiums |
|
$ |
1,238 |
|
|
$ |
1,273 |
|
|
| Value of
shares issued under dividend reinvestment plan |
|
$ |
34 |
|
|
$ |
33 |
|
|
| Value of
common shares exchanged for OP units |
|
$ |
5 |
|
|
$ |
4 |
|
|
| Change in
fair value of available-for-sale securities |
|
$ |
— |
|
|
$ |
18 |
|
|
| Change in
fair value of cash flow hedge |
|
$ |
(3,470 |
) |
|
$ |
2,645 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
| |
|
March 31, |
|
|
FFO (NAREIT) AND FFO CORE |
|
|
2019 |
|
|
|
2018 |
|
|
| Net income attributable
to Whitestone REIT |
|
$ |
2,774 |
|
|
$ |
3,181 |
|
|
| Adjustments to
reconcile to FFO: |
|
|
|
|
|
|
Depreciation and amortization of real estate |
|
|
6,395 |
|
|
|
6,207 |
|
|
|
Depreciation and amortization of real estate assets of real estate
partnership (pro rata) |
|
|
621 |
|
|
|
695 |
|
|
| (Gain)
loss on sale or disposal of assets and properties |
|
|
2 |
|
|
|
(69 |
) |
|
| Gain on
sale or disposal of properties or assets of real estate partnership
(pro rata) |
|
|
3 |
|
|
|
— |
|
|
| Net
income attributable to noncontrolling interests |
|
|
65 |
|
|
|
88 |
|
|
| FFO (NAREIT) |
|
|
9,860 |
|
|
|
10,102 |
|
|
| Adjustments to
reconcile to FFO Core: |
|
|
|
|
|
|
Share-based compensation expense |
|
|
1,951 |
|
|
|
1,908 |
|
|
| Proxy
contest professional fees |
|
|
— |
|
|
|
680 |
|
|
| FFO Core |
|
$ |
11,811 |
|
|
$ |
12,690 |
|
|
|
|
|
|
|
|
|
|
FFO PER SHARE AND OP UNIT CALCULATION |
|
|
|
|
|
|
Numerator: |
|
|
|
|
|
| FFO |
|
$ |
9,860 |
|
|
$ |
10,102 |
|
|
|
Distributions paid on unvested restricted common shares |
|
|
(41 |
) |
|
|
(41 |
) |
|
| FFO
excluding amounts attributable to unvested restricted common
shares |
|
$ |
9,819 |
|
|
$ |
10,061 |
|
|
| FFO Core
excluding amounts attributable to unvested restricted common
shares |
|
$ |
11,770 |
|
|
$ |
12,649 |
|
|
|
Denominator: |
|
|
|
|
|
| Weighted
average number of total common shares - basic |
|
|
39,649 |
|
|
|
39,066 |
|
|
| Weighted
average number of total noncontrolling OP units - basic |
|
|
928 |
|
|
|
1,083 |
|
|
| Weighted
average number of total common shares and noncontrolling OP units -
basic |
|
|
40,577 |
|
|
|
40,149 |
|
|
|
|
|
|
|
|
|
| Effect of
dilutive securities: |
|
|
|
|
|
| Unvested
restricted shares |
|
|
977 |
|
|
|
1,022 |
|
|
| Weighted
average number of total common shares and noncontrolling OP units -
diluted |
|
|
41,554 |
|
|
|
41,171 |
|
|
|
|
|
|
|
|
|
| FFO per common share
and OP unit - basic |
|
$ |
0.24 |
|
|
$ |
0.25 |
|
|
| FFO per common share
and OP unit - diluted |
|
$ |
0.24 |
|
|
$ |
0.24 |
|
|
|
|
|
|
|
|
|
| FFO Core per common
share and OP unit - basic |
|
$ |
0.29 |
|
|
$ |
0.32 |
|
|
| FFO Core per common
share and OP unit - diluted |
|
$ |
0.28 |
|
|
$ |
0.31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
| |
|
March 31, |
|
|
PROPERTY NET OPERATING INCOME |
|
|
2019 |
|
|
|
2018 |
|
|
| Net income attributable
to Whitestone REIT |
|
$ |
2,774 |
|
|
$ |
3,181 |
|
|
| General
and administrative expenses |
|
|
6,002 |
|
|
|
6,327 |
|
|
|
Depreciation and amortization |
|
|
6,464 |
|
|
|
6,274 |
|
|
| Equity in
earnings of real estate partnership |
|
|
(492 |
) |
|
|
(674 |
) |
|
| Interest
expense |
|
|
6,533 |
|
|
|
5,973 |
|
|
| Interest,
dividend and other investment income |
|
|
(245 |
) |
|
|
(257 |
) |
|
| Provision
for income taxes |
|
|
118 |
|
|
|
110 |
|
|
| Gain on
sale of properties |
|
|
— |
|
|
|
(249 |
) |
|
|
Management fee, net of related expenses |
|
|
(8 |
) |
|
|
(53 |
) |
|
| Loss on
disposal of assets |
|
|
2 |
|
|
|
180 |
|
|
| NOI of
real estate partnership (pro rata) |
|
|
1,759 |
|
|
|
2,032 |
|
|
| Net
income attributable to noncontrolling interests |
|
|
65 |
|
|
|
88 |
|
|
| NOI |
|
$ |
22,972 |
|
|
$ |
22,932 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
March 31, |
|
|
EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND
AMORTIZATION |
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
| Net income attributable
to Whitestone REIT |
|
$ |
2,774 |
|
|
$ |
3,181 |
|
|
|
Depreciation and amortization |
|
|
6,464 |
|
|
|
6,274 |
|
|
| Equity in
earnings of real estate partnership |
|
|
(492 |
) |
|
|
(674 |
) |
|
| Interest
expense |
|
|
6,533 |
|
|
|
5,973 |
|
|
| Provision
for income taxes |
|
|
118 |
|
|
|
110 |
|
|
| Gain on
sale of properties |
|
|
— |
|
|
|
(249 |
) |
|
| Loss on
disposal of assets |
|
|
2 |
|
|
|
180 |
|
|
|
Management fee, net of related expenses |
|
|
(8 |
) |
|
|
(53 |
) |
|
| EBITDA
adjustments for real estate partnership |
|
|
1,671 |
|
|
|
1,956 |
|
|
| Net
income attributable to noncontrolling interests |
|
|
65 |
|
|
|
88 |
|
|
| EBITDA |
|
$ |
17,127 |
|
|
$ |
16,786 |
|
|
|
|
|
|
|
|
|
Whitestone REIT (NYSE:WSR)
Historical Stock Chart
From Mar 2024 to Apr 2024
Whitestone REIT (NYSE:WSR)
Historical Stock Chart
From Apr 2023 to Apr 2024
