Whitestone Reit · NYSE:WSR
Whitestone Reit — Q4 2023 Earnings Presentation
20 slides from Whitestone Reit's earnings presentation, Mar 7, 2024
Slide 1: Connecting Community and Convenience
CONNECTING COMMUNITY AND CONVENIENCE E ARNI N G S PRE SE NT ATI O N Q4 2024
Slide 2: WSR at a Glance
WSR AT A GLANCE 55 5.0 M SF 94.2% WSR Competitive Strengths Properties Total GLA Occupancy ➢ High Quality Portfolio 1,453 +2.7% $23.35 ➢ Exposure to High Growth Sun Belt Markets 2023 PSF Annual ➢ Diversified and Granular Tenant Base Total Tenants SS NOI Growth Base Rent ➢ Strong SS NOI Growth Track
Slide 3: Improving Metrics Across the Board
IMPROVING METRICS ACROSS THE BOARD Strong Results Driven By A Consistent Strategy (1) Ratio of Debt Same Store Annual Net Leasing Revenue Core FFO Effective to Pro Forma NOI (2) Occupancy(3) Spreads (3) ($’s in millions) Per Share (2) Average Base EBITDAre(2)(3) ($’s in millions) Rent (“ABR”)(3) (St
Slide 4: Operational Performance Drivers
OPERATIONAL PERFORMANCE DRIVERS Occupancy Leasing Spreads 96% 30% 94.2% 24.4% 93.7% 25% 23.5% 94% 93.3% 20.8% 21.8% 92.5% 92.7% 92.7% 19.2% 18.7% 20% 17.4% 92% 91.3% 91.0% 91.5% 14.9% 15% 13.1% 89.9% 89.9% 90% 10.1% 88.7% 10% 7.8% 6.8% 88% 5% 86% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Slide 5: Positive Supply Dynamics in WSR Markets
POSITIVE SUPPLY DYNAMICS IN WSR MARKETS (2) 2023 Vacancy Rates (1) National Strip Center Supply Growth (as a % of existing stock) 3.0% 2.5% 2.0% LT Average 1.5% = 1.4% 1.0% 0.5% 0.0% Whitestone Markets Phoenix Houston Austin San Antonio Dallas (1) (1) (1) (1) (1) (1) Marcus & Millichap Research Serv
Slide 6: Specializing in High Demand Smaller Spaces
SPECIALIZING IN HIGH DEMAND SMALLER SPACES Breakdown of Large Space ABR Breakdown of Small Space ABR Tenants 10,000+ Sq FT Tenants Under 10,000 Sq FT 25% of Total ABR 75% of Total ABR Other Other 12% 11% Pet Services 3% Pet Services Non Retail Wireless 3% 3% Grocery 3% 28% Restaurants & Food Educati
Slide 7: Best Neighborhoods in Target Markets
BEST NEIGHBORHOODS IN TARGET MARKETS Phoenix: 9% Above MSA ABR PSF (1) Dallas: 31% Above MSA ABR PSF (1) ➢ Great locations equate to Whitestone properties delivering higher rents in each Metropolitan Statistical Area ➢ High-growth, high-income Austin: 3% Above MSA ABR PSF (1) Houston: 29% Above MSA
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: Asset Recycling Initiative
ASSET RECYCLING INITIATIVE Garden Oaks (Feb 2024) Arcadia (Jun 2023) Lake Woodlands (Dec 2022) Acquisitions Square Feet 106,828 Square Feet 69,503 Square Feet 60,246 Occupancy 95.8% Occupancy 100% Occupancy 100% ABR PSF $17.56 ABR PSF $26.29 ABR PSF $35.40 (1) (1) (1) Avg One Mile HHI $119k Avg One
Slide 10: Litigation Update
LITIGATION UPDATE Pillarstone Poison Pill Termination for Cause: Compensation Status Ruling Issued in Whitestone’s Favor Dismissed Venue Delaware Texas WSR Position Plaintiff Defendant In January 2024, the Court issued a ruling that In December 2023; The Court dismissed all claims made Whitestone pr
Slide 11: 2023 & 2024 Core FFO/Share Guidance Walk
2023 & 2024 CORE FFO/SHARE(1) GUIDANCE WALK 2022 > 2023 Core FFO / Share Guidance Walk $1.10 $1.03 $0.05 (2) $1.00 $0.04 $0.01 $0.01 $0.90 2023 G&A includes 8 $0.11 cents of WSR litigation expense related to $0.80 $0.99 Pillarstone & former CEO lawsuits $0.91 $0.70 $0.60 (3) 2022 Core FFO / Share SS
Slide 12: 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 ▪ $104 MM Currently Undrawn $150 ▪ $265 MM Term Loan due 2028 $100 Unsecured ➢ Weighted- Average Debt Credit Interest Rate: 5.
Slide 13: 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 ▪ Sun-belt located centers in growing, high-income neighborhoods ▪ 93% triple-net leases with a weighte
Slide 14: Appendix
APPENDIX THI RD QUAR TE R 2021
Slide 15: 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 16: FFO and Core FFO Reconciliation
FFO AND CORE 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 cer
Slide 17: 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 18: EBITDAre and Debt/EBITDAre Reconciliation
EBITDAre AND DEBT/EBITDAre RECONCILIATION Whitestone REIT and Subsidiaries RECONCILIATION OF NON-GAAP MEASURES (continued) (in thousands) Sept 30 Jun 30 Mar 31 Dec 31 Sept 30 Three Jun Months 30 Ended: Mar 31 Dec 31 Sept 30 Jun 30 Mar 31 2023Dec 31 2023 Sept 30 2023 Jun 30 2022 2022 Mar 31 2022 Dec
Slide 19: 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 20: 2024 Core FFO/Share Guidance Reconciliation
2024 CORE FFO/SHARE GUIDANCE RECONCILIATION Please refer to slide 16 for details on FFO/Share and Core FFO/Share. 20