Whitestone Reit · NYSE:WSR
Whitestone Reit — Q4 2024 Earnings Presentation
28 slides from Whitestone Reit's earnings presentation, Mar 4, 2025
Slide 1: Industry Leaders in High-Value Shop Space
Whitestone REIT Q4 2024 Earnings Presentation Industry Leaders in High- Value Shop Space
Slide 2: Differentiated Strategy, Proven Execution
Differentiated Strategy, Proven Execution 5.1% 94.1% 6.6x 11% 9.1% 2024 Highlights Same Store NOI (1) Occupancy Debt / EBITDAre (2) Core FFO/Share (3) Dividend Growth (4) Growth Up 280 Basis Points 2.6x Improvement Growth 6.5% CAGR 5.3% Avg Since 2021 Since 2021 Versus 2021 5.5% CAGR Since 2021 Q1 2
Slide 3: Whitestone's Success Formula
Whitestone’s Success Formula Acquire The Right Centers: Whitestone acquires centers with the team’s core capabilities in mind (see slide 9 for detail) Anchor Centers To The Community: Whitestone team members are data centric, utilizing ESRI and Placer.ai to determine demand for a center’s surroundin
Slide 4: Initiating 2025 Guidance: Sustainable Earnings Growth
Initiating 2025 Guidance: Sustainable Earnings Growth 2023 > 2025 Core FFO / Share Core $1.10 FFO/Share $0.07 Target $0.03 $1.03 - $1.07 $0.03 $1.05 $0.03 $0.02 $0.02 $0.01 $0.01 $1.01 $0.09 $0.02 $1.00 $0.01 $0.95 $0.91 $0.90 $0.85 $0.80 2023 Core SS NOI Non SS Term Fees G&A Interest Other 2024 Cor
Slide 5: Whitestone's Value Proposition: The Road Ahead
Whitestone’s Value Proposition: The Road Ahead Leverage Whitestone’s Leadership position in high-value shop space to deliver (1) consistent Core FFO growth of 4 – 6%, matched by sustained dividend growth Underpin FFO growth with 3 – 5% Same Store NOI growth, driven by contractual escalators, strong
Slide 6: Sustainable Same Store NOI Drivers
Sustainable Same Store NOI Drivers Forecasting 3 – 4.5% Sustainable Same Store NOI Growth Contractual escalators 2.3% ≤10k sq ft: 2.8%, >10k sq ft: 1.7%, blended: 2.3% +80 – 180 Leasing: New and Renewal Basis Points Up to 100 Redevelopment Basis Points 6
Slide 7: Leasing Activity – Driving SS NOI Growth
Leasing Activity – Driving SS NOI Growth Whitestone’s SS NOI Growth Projection Using Historical Performance Cash Leasing Spreads 2022 - 2024 16% 14% 12% 10% 9.2% Average 8% 6% 4% 2% Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 x $77.5 MM Expiring Ba
Slide 8: Redevelopment: Efficiently Driving SS NOI Higher
Redevelopment: Efficiently Driving SS NOI Higher ➢ Redevelopment capital is spent when it complements changes in the surrounding neighborhood (demographic or development) and with an identified NOI benefit ➢ Whitestone focuses heavily on ensuring redevelopment efforts do not interrupt cash flows by
Slide 9: Driving Returns via Accretive Acquisitions
Driving Returns via Accretive Acquisitions Whitestone’s Markets Business Friendly States (Sunbelt) High Shop Space Centers: Grocery agnostic (limiting competitors), not agnostic on configuration Whitestone’s Data Driven Acquisition Filter Attractive Cap Rate Upwardly Mobile Demographic Strong Univer
Slide 10: Driving Returns: Recent Acquisitions
Driving Returns: Recent Acquisitions Scottsdale Commons (Apr 2024) Garden Oaks (Feb 2024) Arcadia (Jun 2023) Acquisitions Square Feet 69,482 Square Feet 106,828 Square Feet 69,503 Occupancy 96.6% Occupancy 95.8% Occupancy 100% ABR PSF $24.55 ABR PSF $17.56 ABR PSF $26.29 Avg One Mile HHI $132k (1) A
Slide 11: Highest Concentration of High Return Centers in Peer Group
Highest Concentration of High Return Centers in Peer Group (1) PECO REG IVT BRX 8% 8% 17% 24% 14% 28% 34% 40% 36% 39% 35% 56% 29% 41% 40% 37% UE KRG KIM FRT AKR 7% 11% 9% 17% 15% 20% 9% 32% 23% 44% 17% 45% 36% 29% 46% 28% 35% 30% 22% Strip Neighborhood Community Power Lifestyle Other (2) (3) 2020 –
Slide 12: What Are The Key Components To High Return Shop Space?
What Are The Key Components To High Return Shop Space? Spaces that deliver for the tenants: Spaces that allow tenants to maximize their revenue by allowing them to take advantage of online branding and by exposing them to a center’s other high-traffic tenants Spaces that deliver for the community: W
Slide 13: Peer Group's Highest Percentage of High Return Shop Space
Peer Group’s Highest Percentage of High Return Shop Space 77% of Whitestone’s Total ABR Driven By Small Shop Space Breakdown of Large Space ABR Breakdown of Small Space ABR Tenants 10,000+ Sq FT Tenants Under 10,000 Sq FT 23% of Total ABR 77% of Total ABR Other 8% Other 9% Grocery 2% Pets 3% Pets 3%
Slide 14: Delivering Results With Less Capex
Delivering Results With Less Capex Whitestone has used less capital v peers while outperforming on SS NOI growth (1) Capital Expenditures (incl. Redev.) by REIT (% of NOI ‘19 – ’23) 45% 40% 38% 2% 35% 33% 8% 1% 30% 2% 29% 3% 26% 25% 7% 9% 2% 23% 10% 1% 20% 20% 20% 20% 1% 19% 2% 1% 17% 17% 11% 2% 16%
Slide 15: Driving The Value of Our Real Estate Higher
Driving The Value of Our Real Estate Higher Green Street Trade Area Power Scores 100% 90% (1) 85.4 82.2 81.7 80% 80.2 75.7 74.4 74.3 73.7 73.2 70% 70.8 Center Type Percentage (% of NOI) 65.9 60% 59.3 56.0 50% 40% 30% 20% 10% 0% FRT AKR WSR REG SITC ROIC UE IVT CURB KIM KRG BRX PECO Neighborhood / Co
Slide 16: Risk: Robust Underwriting Proven In Pandemic
Risk: Robust Underwriting Proven In Pandemic ➢ Whitestone engages in an extremely robust underwriting process ▪ Beyond credit, Whitestone assesses the strength of the business, the demand trajectory and the ability of the business to meet that demand ▪ Whitestone often requires a higher percentage o
Slide 17: Debt / EBITDAre Driven Down Over Turns Since 2021
Debt / EBITDAre Driven Down Over 3 Turns Since 2021 ➢ $515 MM Credit Facility Amended and Extended in Debt Maturities $300 September 2022 $250 ▪ $250 MM Revolver Expiring 9/16/2026(1) $200 ▪ $125 MM Currently Undrawn (1) In Millions $150 ▪ $265 MM Term Loan due 2028 Unsecured $100 ➢ Weighted Average
Slide 18: Positive Dynamics in Whitestone Markets
Positive Dynamics in Whitestone Markets (1) Q2 2024 Vacancy Rates National Strip Center Supply Growth (2) (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 3 Mile Radius Avg Household Income (3) $160 $150 $140 $131k Peer Avg $130 $120 $110 $100 $90 $8
Slide 19: Appendix
WO WHITESTONE REIT WSR NYSE Appendix
Slide 20: Redevelopment: Boosting 2026+ SS NOI Growth
Redevelopment: Boosting 2026+ SS NOI Growth • Capitalize on recent 60% traffic boost with EoS Fitness opening in 2024 Williams Trace • Ability to leverage Sugarland’s growth as a hub for advanced manufacturing, biotech, financial services and energy technology • Redevelopment will improve walkways,
Slide 21: Redevelopment: Boosting 2026+ SS NOI Growth
Redevelopment: Boosting 2026+ SS NOI Growth • Capitalize on Austin’s thriving high-tech community growth and surrounding luxury master-planned communities Davenport • Recently signed Starbucks Reserve and fitness leader Pvolve • Major opportunity to add high-return restaurants that will plug into gr
Slide 22: 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 23: FFO And Core FFO Reconciliation
FFO And Core FFO Reconciliation FFO: Funds From Operations: The National Association of Real RECONCILIATION OF NON-GAAP MEASURES Estate Investment Trusts (“NAREIT”) defines FFO as net (in thousands, except per share and unit data) income (loss) (calculated in accordance with GAAP), excluding depreci
Slide 24: 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 depreciabl
Slide 25: 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: 31-Dec Sept 30 Jun 30 Mar 31 Dec 31 Sept 30 Jun 30 Mar 31 Dec 31 Sept 30 Jun 30 Mar 31 Dec 31 Sept 30 Jun 30 Mar 31 Dec2024 31 2024 Sept 30 20
Slide 26: 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 27: Multi-Year SS NOI Reconciliation
Multi-Year SS NOI Reconciliation Whitestone REIT and Subsidiaries RECONCILIATION OF NON-GAAP MEASURES (continued) (in thousands) Year Ended December 31, Year Ended December 31, Year Ended December 31, Year Ended December 31, Year Ended December 31, Year Ended December 31, 2024 2023 2023 2022 2022 20
Slide 28: 2024 Core FFO/Share Guidance Reconciliation
2024 Core FFO/Share Guidance Reconciliation Guidance does not include the operational or capital impact of any future unannounced acquisition or disposition activity or the collection of any amounts due us from our claims in the Pillarstone bankruptcy Please refer to slide 23 for details on FFO/Shar