Whitestone Reit · NYSE:WSR
Whitestone Reit — Q1 2023 Earnings Presentation
19 slides from Whitestone Reit's earnings presentation, May 3, 2023
Slide 1: Connecting Community and Convenience: Earnings Presentation Q1 2023
CONNECTING COMMUNITY AND CONVENIENCE E ARNI N G S PRE SE NT ATI O N Q1 2023
Slide 2: Improving Metrics Across the Board
IMPROVING METRICS ACROSS THE BOARD Strong Results Driven By A Consistent Strategy Annual Net FFO Ratio of Debt Same Store Leasing Revenue Effective to Pro Forma NOI (3) Occupancy Spreads ($’s in millions) Per Share (1) Average Base EBITDAre (2) ($’s in millions) (Straight Line) Rent (“ABR”) + 170 +
Slide 3: 2022 Accomplishments
2022 ACCOMPLISHMENTS Objective Result 93.7% Achieve 92 – 93% Occupancy% P (year-end 2022) Enhance Earnings Growth Drivers Maintain a same store NOI growth range of 3 – 5% P +7.9% in 2022 G&A reduced by Reduce G&A by $3.0 to $3.5 million in 2022 (1) P $4.6 MM (1) Improve Balance Renew credit line and
Slide 4: "Commercial" Real Estate Is Not One Category
“COMMERCIAL” REAL ESTATE IS NOT ONE CATEGORY ➢ Whitestone’s centers benefit as Average Retail Vacancy (Year-End 2022) consumers spend less time in offices / urban centers and more time in their neighborhoods ➢ Weakness in the office sector is anticipated to benefit Whitestone – either by reducing in
Slide 5: Best Neighborhoods in Target Markets
BEST NEIGHBORHOODS IN TARGET MARKETS Phoenix: 17% Above MSA ABR PSF (1) Dallas: 30% Above MSA ABR PSF (1) ➢ Great locations equate to Whitestone properties delivering higher rents in each Metropolitan Statistical Area Austin: 11% Above MSA ABR PSF (1) Houston: 21% Above MSA ABR PSF (1) ➢ For over a
Slide 6: Leading SS NOI Growth
LEADING SS NOI GROWTH (1) 2022 SS NOI Growth 7.9% 7.7% 8% 6.6% 6% 5.1% 4.5% 4.4% 4% 2.9% 2.9% 2% 0.8% 0% WSR FRT BRX KRG PECO KIM UE REG SITC (1) 2023 Guidance SS NOI Growth Midpoint 4.0% 3.5% 3.5% 3.0% 3.0% 2.5% 2.5% 2.0% 1.5% 1.0% 0.8% 0.5% 0.5% 0.0% WSR PECO FRT BRX KRG KIM SITC REG UE WSR PECO F
Slide 7: Acquisitions: Driving Value Through External Growth
ACQUISITIONS: DRIVING VALUE THROUGH EXTERNAL GROWTH ➢ Lake Woodlands is aligned with Whitestone’s past and future acquisition strategy: ▪ Adjacent to leading grocer, H-E-B and high-end shopping (Louis Vuitton, Tiffany & Co, etc.) ▪ 60,246 Square Feet with an Average Base Rent PSF of $32.00 ▪ Average
Slide 8: Portfolio Designed for High Quality Revenue
PORTFOLIO DESIGNED FOR HIGH QUALITY REVENUE Strong Tenants Well Designed Leases ➢ Tenants with proven business models ➢ In-house, regional leasing teams handle and poised for growth all leasing ➢ Heavy neighborhood research ➢ Shorter duration: 3-to-5-year terms conducted for both acquisitions and ➢
Slide 9: Reiterating 2023 FFO / Share Guidance
REITERATING 2023 FFO / SHARE GUIDANCE ➢ 2023 FFO / Share Tailwinds First Quarter FFO / Share (1) (1) $0.04 $0.04 increased ▪ Strong Leasing Spreads Driving SS NOI Growth i interest expense ▪ Reduced Expenses $0.26 $0.24 ▪ Impact of Accretive Lake Woodlands Acquisition ➢ 2023 FFO / Share Headwind 202
Slide 10: Current Debt Profile
CURRENT DEBT PROFILE Debt Maturities ➢ $515 MM Credit Facility Amended and Extended in $300 September 2022 $250 ▪ $250 MM Revolver Expiring 9/16/2026(1) $200 (1) In Millions ▪ $137 MM Currently Undrawn $150 ▪ $265 MM Term Loan due 2028 $100 Unsecured ➢ Weighted- Average Debt Credit Interest Rate: 4.
Slide 11: Significantly Reduced Expenses (G&A)
SIGNIFICANTLY REDUCED EXPENSES (G&A) G&A as a % of Revenue 24% 23% 22% 22% 19% 19% 20% 18% 18% 18% 18% 16% (1) 14% 13% 14% (Targeted) 12% 10% 2015 2016 2017 2018 2019 2020 2021 2022 2023 Whitestone Employee Count 120 108 110 106 103 98 100 95 88 87 90 80 75 70 60 2015 2016 2017 2018 2019 2020 2021 2
Slide 12: Key Takeaways
KEY TAKEAWAYS ➢ Whitestone’s differentiated approach: ▪ All in-house leasing team specialized in service-oriented tenants and capable of achieving peer-leading occupancy in the ≤10k sq ft category ▪ 99% sun-belt located centers in growing, high-income neighborhoods ▪ 93% triple-net leases with a wei
Slide 13: Appendix
APPENDIX THI RD QUAR TE R 2021
Slide 14: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains forward looking statements within the meaning of Section 27 A of the Securities Act of 1933 as amended, and Section 21 E of the Securities Exchange Act of 1934 as amended. Forward looking statements provide our current expectations or forecasts o
Slide 15: FFO Reconciliation
FFO RECONCILIATION FFO: Funds From Operations: The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as net income (loss) (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains or losses from the sale of certain real est
Slide 16: EBITDAre and Debt/EBITDAre Reconciliation
EBITDAre AND DEBT/EBITDAre RECONCILIATION EBITDAre: The National Association of Real Estate Investment Trusts (“NAREIT”) defines EBITDAre as net income computed in accordance with GAAP, plus interest expense, income tax expense, depreciation and amortization and impairment write-downs of depreciable
Slide 17: EBITDAre and Debt/EBITDAre Reconciliation
EBITDAre AND DEBT/EBITDAre RECONCILIATION Whitestone REIT and Subsidiaries RECONCILIATION OF NON-GAAP MEASURES (continued) (in thousands) Three Months Ended: Dec 31 Sept 30 Jun 30 Mar 31 Dec 31 Sept 30 Jun 30 Mar 31 2022 2022 2022 2022 2022 2021 2021 2021 EARNINGS BEFORE INTEREST, TAX, DEPRECIATION
Slide 18: NOI and SS NOI Reconciliation
NOI AND SS NOI RECONCILIATION NOI: Net Operating Income: Management believes that NOI is a useful measure of our property operating performance. We define NOI as operating revenues (rental and other revenues) less property and related expenses (property operation and maintenance and real estate taxe
Slide 19: 2023 FFO/Share Guidance Reconciliation
2023 FFO/SHARE GUIDANCE RECONCILIATION 19