Whitestone Reit · NYSE:WSR
Whitestone Reit — Shareholder Meeting (June 2007)
24 slides from Whitestone Reit's shareholder meeting presentation, Jun 6, 2007
Slide 1: Whitestone REIT Annual Shareholders Meeting May 31, 2007
WHITESTONE REIT Annual Shareholders Meeting May 31, 2007
Slide 2: A Public Real Estate Company Creating Value In Real Estate
WHITESTONE REITA Public Real Estate Company Creating Value In Real Estate
Slide 3: Transformation
Transformation •What Was Hartman Commercial Properties REIT • Why The Change? • What is Whitestone REIT -Turnaround
Slide 4: What Was Hartman Commercial Properties REIT
What Was Hartman Commercial Properties REIT•36 properties (27 rolled into REIT) •3 million square feet • 3 different asset types • Smaller properties -20,000 to 250,000 sq ft • Deferred maintenance and capital improvements • Dividends in excess of cash flowResulting in: • Five years of declining fin
Slide 5: Trends: Summary of Highlighted Data
TRENDS Summary of Highlighted Data (In thousands of $’s, except %’s and per share data) 2002 2003 2004 2005 2006 Occupancy 92% 88% 86% 82% 83% Real Estate Assets $117,029 $131,721 $141,998 $173,789 $173,858 Net Income 3,705 3,474 3,424 2,448 1,781 Per common share $0.53 $0.50 $0.49 $0.31 $0.19 FFO (
Slide 6: Net Income Per Share and Occupancy
Net Income Per Share $0.15 $0.20 $0.25 $0.30 $0.35 $0.40 $0.45 $0.50 $0.55 2002 2003 2004 2005 2006 Hartman Commercial Properties REIT Occupancy 80% 82% 84% 86% 88% 90% 92% 94% 2002 2003 2004 2005 2006
Slide 7: AFFO and Dividends as a percent of AFFO
AFFO and Dividends as a percent of AFFO(AFFO is in thousands)$6,500 $7,000 $7,500 $8,000 $8,500 $9,000 $9,500 2002 2003 2004 2005 2006 95% 100% 105% 110% 115% 120% 125% 130% 135% 140% 145% AFFO Dividends as a percent of AFFO Hartman Commercial Properties REIT
Slide 8: Results Of Trends 2002 to 2006
Results Of Trends -2002 to 2006•Difficulty leasing properties•Costly deferred maintenance and needed capital improvements•52% Drop in Net Income Per Share•Borrowings required to pay dividends•Reduced dividends
Slide 9: Results of Property Sales
Results of Property Sales•Northwest Place II Sold in 2006 $1,100,000 •Property was “acquired”in 2000 ($1,100,000) (From Hartman R.E. Income Properties XII)•Value added to Shareholders $0
Slide 10: Why The Change?
Why The Change?•Poor property performance of third party management company•Declining occupancies and cash flow•Deteriorating trends•Inability to list stock•Commitments not kept
Slide 11: Turnaround
WHITESTONE REITTurnaround•New Leadership•New Management•New Plan•New Name
Slide 12: Our Primary Goal: Create Shareholder Value
Our Primary Goal:Create Shareholder Value
Slide 13: Execute Business Plan
Execute Business Plan•Maximize value in current properties•Redevelopment of targeted properties•Strategic acquisitions outside of Texas
Slide 14: Property Redevelopment
Property Redevelopment
Slide 15: Bellnott Square view of new entry
Slide 16: Create Liquidity Through Public Listing
Create Liquidity Through Public Listing•Essentials for Whitestone stock listing:-Positive financial trends-Redevelopment of properties-Pipeline of acquisitions-Engagement of investment banker-Institutional investor participation
Slide 17: Conclude Litigation with Hartman
Conclude Litigation with Hartman•Time and expense delays achievement of goals•Progress to date-Federal Judge Order in Whitestone Favor-State Court Case
Slide 18: Core Values
WHITESTONE REITCore Values•Maximize the value of Whitestone•Develop and train our people•Pursue excellence•Stretch beyond limits
Slide 19: Transparency
WHITESTONE REITTransparency•Exercise corporate governance•Full disclosure of financial information•Accurate and timely filing of SEC reports
Slide 20: Business Plan
WHITESTONE REITBusiness Plan•Focus on value-added commercial properties•Diversify geographically•Improve property performance•Aggressive leasing of properties
Slide 21: Turnaround Targets
WHITESTONE REITTurnaround Targets•Increase occupancy by year end•Sell non-economical assets•Redevelop selected properties•Diversify geographically•Obtain Institutional investors•List stock on a public exchange
Slide 22: Whitestone REIT www.whitestonereit.com
WHITESTONE REITwww.whitestonereit.com
Slide 23: Note: Excerpted from 10-K Annual Report
Note:This presentation is excerpted in part from our 10-K Annual Report for our Fiscal Year Ended 12/31/2006.Please read the entire report for full and complete disclosure. You can find the complete report at www.whitestonereit.com.
Slide 24: Funds From Operations and Adjusted Funds From Operations
Funds From Operations and Adjusted Funds From OperationsWHITESTONE REITWe believe that Funds From Operations (“FFO”) and Adjusted Funds From Operations (“AFFO”) are appropriate supplemental measures of operating performancebecause these measures help investors compare our operating performance relat