|
(Mark One)
|
[x]
|
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended June 30, 2017
|
OR
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from
____________
to
____________
|
Maryland
|
|
76-0594970
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer
Identification No.)
|
Item 1.
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
Item 2.
|
|
|
||
Item 3.
|
|
|
||
Item 4.
|
|
|
Item 1.
|
|
|
||
Item 1A.
|
|
|
||
Item 2.
|
|
|
||
Item 3.
|
|
|
||
Item 4.
|
|
|
||
Item 5.
|
|
|
||
Item 6.
|
|
Exhibits
.
|
|
|
|
|
|
||
|
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
|
|
(unaudited)
|
|
|
||||
ASSETS
(1)
|
||||||||
Real estate assets, at cost
|
|
|
|
|
||||
Property
|
|
$
|
1,140,299
|
|
|
$
|
920,310
|
|
Accumulated depreciation
|
|
(118,442
|
)
|
|
(107,258
|
)
|
||
Total real estate assets
|
|
1,021,857
|
|
|
813,052
|
|
||
Cash and cash equivalents
|
|
9,267
|
|
|
4,168
|
|
||
Restricted cash
|
|
127
|
|
|
56
|
|
||
Marketable securities
|
|
550
|
|
|
517
|
|
||
Escrows and acquisition deposits
|
|
7,408
|
|
|
6,620
|
|
||
Accrued rents and accounts receivable, net of allowance for doubtful accounts
|
|
20,482
|
|
|
19,951
|
|
||
Unamortized lease commissions and loan costs
|
|
8,283
|
|
|
8,083
|
|
||
Prepaid expenses and other assets
|
|
3,431
|
|
|
2,762
|
|
||
Total assets
|
|
$
|
1,071,405
|
|
|
$
|
855,209
|
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
(2)
|
||||||||
Liabilities:
|
|
|
|
|
||||
Notes payable
|
|
$
|
663,480
|
|
|
$
|
544,020
|
|
Accounts payable and accrued expenses
|
|
30,206
|
|
|
28,692
|
|
||
Tenants' security deposits
|
|
6,600
|
|
|
6,125
|
|
||
Dividends and distributions payable
|
|
11,289
|
|
|
8,729
|
|
||
Total liabilities
|
|
711,575
|
|
|
587,566
|
|
||
Commitments and contingencies:
|
|
—
|
|
|
—
|
|
||
Equity:
|
|
|
|
|
||||
Preferred shares, $0.001 par value per share; 50,000,000 shares authorized; none issued and outstanding as of June 30, 2017 and December 31, 2016, respectively
|
|
—
|
|
|
—
|
|
||
Common shares, $0.001 par value per share; 400,000,000 shares authorized; 38,526,489 and 29,468,563 issued and outstanding as of June 30, 2017 and December 31, 2016, respectively
|
|
38
|
|
|
29
|
|
||
Additional paid-in capital
|
|
507,227
|
|
|
396,494
|
|
||
Accumulated deficit
|
|
(159,413
|
)
|
|
(141,695
|
)
|
||
Accumulated other comprehensive gain
|
|
845
|
|
|
859
|
|
||
Total Whitestone REIT shareholders' equity
|
|
348,697
|
|
|
255,687
|
|
||
Noncontrolling interests:
|
|
|
|
|
||||
Redeemable operating partnership units
|
|
11,219
|
|
|
11,941
|
|
||
Noncontrolling interest in Consolidated Partnership
|
|
(86
|
)
|
|
15
|
|
||
Total noncontrolling interests
|
|
11,133
|
|
|
11,956
|
|
||
Total equity
|
|
359,830
|
|
|
267,643
|
|
||
Total liabilities and equity
|
|
$
|
1,071,405
|
|
|
$
|
855,209
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Property revenues
|
|
|
|
|
|
|
|
|
||||||||
Rental revenues
|
|
$
|
23,010
|
|
|
$
|
19,649
|
|
|
$
|
44,306
|
|
|
$
|
39,071
|
|
Other revenues
|
|
7,198
|
|
|
5,480
|
|
|
14,169
|
|
|
11,493
|
|
||||
Total property revenues
|
|
30,208
|
|
|
25,129
|
|
|
58,475
|
|
|
50,564
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Property expenses
|
|
|
|
|
|
|
|
|
||||||||
Property operation and maintenance
|
|
5,375
|
|
|
4,683
|
|
|
10,869
|
|
|
9,477
|
|
||||
Real estate taxes
|
|
4,487
|
|
|
3,304
|
|
|
8,407
|
|
|
6,658
|
|
||||
Total property expenses
|
|
9,862
|
|
|
7,987
|
|
|
19,276
|
|
|
16,135
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other expenses (income)
|
|
|
|
|
|
|
|
|
||||||||
General and administrative
|
|
5,848
|
|
|
5,413
|
|
|
12,017
|
|
|
10,249
|
|
||||
Depreciation and amortization
|
|
6,681
|
|
|
5,521
|
|
|
12,689
|
|
|
10,913
|
|
||||
Interest expense
|
|
5,629
|
|
|
4,748
|
|
|
10,782
|
|
|
9,552
|
|
||||
Interest, dividend and other investment income
|
|
(101
|
)
|
|
(78
|
)
|
|
(239
|
)
|
|
(175
|
)
|
||||
Total other expense
|
|
18,057
|
|
|
15,604
|
|
|
35,249
|
|
|
30,539
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income before gain (loss) on sale or disposal of properties or assets and income taxes
|
|
2,289
|
|
|
1,538
|
|
|
3,950
|
|
|
3,890
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Provision for income taxes
|
|
(89
|
)
|
|
(11
|
)
|
|
(170
|
)
|
|
(167
|
)
|
||||
Gain on sale of properties
|
|
16
|
|
|
—
|
|
|
16
|
|
|
2,890
|
|
||||
Loss on sale or disposal of assets
|
|
(72
|
)
|
|
(18
|
)
|
|
(95
|
)
|
|
(16
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
2,144
|
|
|
1,509
|
|
|
3,701
|
|
|
6,597
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Redeemable operating partnership units
|
|
60
|
|
|
25
|
|
|
114
|
|
|
116
|
|
||||
Non-controlling interests in Consolidated Partnership
|
|
101
|
|
|
—
|
|
|
165
|
|
|
—
|
|
||||
Less: Net income attributable to noncontrolling interests
|
|
161
|
|
|
25
|
|
|
279
|
|
|
116
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Whitestone REIT
|
|
$
|
1,983
|
|
|
$
|
1,484
|
|
|
$
|
3,422
|
|
|
$
|
6,481
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Basic Earnings Per Share:
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares
|
|
$
|
0.05
|
|
|
$
|
0.05
|
|
|
$
|
0.10
|
|
|
$
|
0.23
|
|
Diluted Earnings Per Share:
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares
|
|
$
|
0.05
|
|
|
$
|
0.05
|
|
|
$
|
0.10
|
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
35,716
|
|
|
26,819
|
|
|
32,583
|
|
|
26,712
|
|
||||
Diluted
|
|
36,544
|
|
|
27,513
|
|
|
33,493
|
|
|
27,501
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Distributions declared per common share / OP unit
|
|
$
|
0.2850
|
|
|
$
|
0.2850
|
|
|
$
|
0.5700
|
|
|
$
|
0.5700
|
|
|
|
|
|
|
|
|
|
|
||||||||
Consolidated Statements of Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
2,144
|
|
|
$
|
1,509
|
|
|
$
|
3,701
|
|
|
$
|
6,597
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive gain (loss)
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Unrealized loss on cash flow hedging activities
|
|
(780
|
)
|
|
(2,450
|
)
|
|
(48
|
)
|
|
(8,491
|
)
|
||||
Unrealized gain on available-for-sale marketable securities
|
|
33
|
|
|
36
|
|
|
33
|
|
|
31
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive income (loss)
|
|
1,397
|
|
|
(905
|
)
|
|
3,686
|
|
|
(1,863
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Less: Net income attributable to noncontrolling interests
|
|
161
|
|
|
26
|
|
|
279
|
|
|
116
|
|
||||
Less: Comprehensive loss attributable to noncontrolling interests
|
|
(22
|
)
|
|
(42
|
)
|
|
(1
|
)
|
|
(149
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive income (loss) attributable to Whitestone REIT
|
|
$
|
1,258
|
|
|
$
|
(889
|
)
|
|
$
|
3,408
|
|
|
$
|
(1,830
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling Interests
|
|
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
Redeemable
|
|
Partners'
|
|
|
||||||||||||||||||||
|
|
|
|
Additional
|
|
|
|
Other
|
|
Total
|
|
Operating
|
|
Interest in
|
|
|
||||||||||||||||||||||
|
|
Common Shares
|
|
Paid-In
|
|
Accumulated
|
|
Comprehensive
|
|
Shareholders'
|
|
Partnership
|
|
Consolidated
|
|
Total
|
||||||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
Loss
|
|
Equity
|
|
Units
|
|
Dollars
|
|
Partnership
|
|
Equity
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Balance, December 31, 2016
|
|
29,468
|
|
|
$
|
29
|
|
|
$
|
396,494
|
|
|
$
|
(141,695
|
)
|
|
$
|
859
|
|
|
$
|
255,687
|
|
|
1,103
|
|
|
$
|
11,941
|
|
|
$
|
15
|
|
|
$
|
267,643
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Exchange of noncontrolling interest OP units for common shares
|
|
19
|
|
|
—
|
|
|
206
|
|
|
—
|
|
|
—
|
|
|
206
|
|
|
(19
|
)
|
|
(206
|
)
|
|
—
|
|
|
—
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Issuance of shares under dividend reinvestment plan
|
|
5
|
|
|
—
|
|
|
63
|
|
|
—
|
|
|
—
|
|
|
63
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
63
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Issuance of common shares - ATM Program, net of offering costs
|
|
567
|
|
|
1
|
|
|
7,723
|
|
|
—
|
|
|
—
|
|
|
7,724
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,724
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Issuance of common shares - Overnight, net of offering costs
|
|
8,019
|
|
|
8
|
|
|
99,887
|
|
|
—
|
|
|
—
|
|
|
99,895
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
99,895
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Repurchase of common shares
(1)
|
|
(154
|
)
|
|
—
|
|
|
(1,987
|
)
|
|
—
|
|
|
—
|
|
|
(1,987
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,987
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Share-based compensation
|
|
602
|
|
|
—
|
|
|
4,833
|
|
|
—
|
|
|
—
|
|
|
4,833
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,833
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Distributions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,140
|
)
|
|
—
|
|
|
(21,140
|
)
|
|
—
|
|
|
(621
|
)
|
|
(266
|
)
|
|
(22,027
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Unrealized gain on change in fair value of available-for-sale marketable securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|
32
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
33
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Unrealized loss on change in value of cash flow hedge
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46
|
)
|
|
(46
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(48
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Reallocation of ownership percentage between parent and subsidiary
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,422
|
|
|
—
|
|
|
3,422
|
|
|
—
|
|
|
114
|
|
|
165
|
|
|
3,701
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Balance, June 30, 2017
|
|
38,526
|
|
|
$
|
38
|
|
|
$
|
507,227
|
|
|
$
|
(159,413
|
)
|
|
$
|
845
|
|
|
$
|
348,697
|
|
|
1,084
|
|
|
$
|
11,219
|
|
|
$
|
(86
|
)
|
|
$
|
359,830
|
|
(1)
|
During the
six
months ended
June 30, 2017
, the Company acquired common shares held by employees who tendered owned common shares to satisfy the tax withholding on the lapse of certain restrictions on restricted common shares.
|
|
|
Six Months Ended
|
||||||
|
|
June 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income
|
|
$
|
3,701
|
|
|
$
|
6,597
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
12,689
|
|
|
10,913
|
|
||
Amortization of deferred loan costs
|
|
624
|
|
|
784
|
|
||
Amortization of notes payable discount
|
|
298
|
|
|
145
|
|
||
Loss (gain) on sale or disposal of assets and properties
|
|
79
|
|
|
(2,874
|
)
|
||
Bad debt expense
|
|
907
|
|
|
763
|
|
||
Share-based compensation
|
|
4,833
|
|
|
3,844
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Escrows and acquisition deposits
|
|
(788
|
)
|
|
844
|
|
||
Accrued rent and accounts receivable
|
|
(1,438
|
)
|
|
(2,014
|
)
|
||
Unamortized lease commissions
|
|
(1,431
|
)
|
|
(1,133
|
)
|
||
Prepaid expenses and other assets
|
|
511
|
|
|
459
|
|
||
Accounts payable and accrued expenses
|
|
(6,756
|
)
|
|
(2,537
|
)
|
||
Tenants' security deposits
|
|
475
|
|
|
324
|
|
||
Net cash provided by operating activities
|
|
13,704
|
|
|
16,115
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Acquisitions of real estate
|
|
(124,557
|
)
|
|
—
|
|
||
Additions to real estate
|
|
(8,279
|
)
|
|
(11,055
|
)
|
||
Proceeds from sales of properties
|
|
26
|
|
|
3,957
|
|
||
Net cash used in investing activities
|
|
(132,810
|
)
|
|
(7,098
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Distributions paid to common shareholders
|
|
(18,546
|
)
|
|
(15,497
|
)
|
||
Distributions paid to OP unit holders
|
|
(623
|
)
|
|
(277
|
)
|
||
Distributions paid to noncontrolling interest in Consolidated Partnership
|
|
(266
|
)
|
|
—
|
|
||
Proceeds from issuance of common shares, net of offering costs
|
|
107,619
|
|
|
10,600
|
|
||
Net proceeds from credit facility
|
|
40,600
|
|
|
3,000
|
|
||
Repayments of notes payable
|
|
(1,826
|
)
|
|
(1,585
|
)
|
||
Payments of loan origination costs
|
|
(695
|
)
|
|
—
|
|
||
Change in restricted cash
|
|
(71
|
)
|
|
4
|
|
||
Repurchase of common shares
|
|
(1,987
|
)
|
|
(1,922
|
)
|
||
Net cash provided by (used in) financing activities
|
|
124,205
|
|
|
(5,677
|
)
|
||
|
|
|
|
|
||||
Net increase in cash and cash equivalents
|
|
5,099
|
|
|
3,340
|
|
||
Cash and cash equivalents at beginning of period
|
|
4,168
|
|
|
2,587
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
9,267
|
|
|
$
|
5,927
|
|
|
|
Six Months Ended
|
||||||
|
|
June 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
||||
Cash paid for interest
|
|
$
|
10,341
|
|
|
$
|
9,169
|
|
Cash paid for taxes
|
|
$
|
329
|
|
|
$
|
284
|
|
Non cash investing and financing activities:
|
|
|
|
|
||||
Disposal of fully depreciated real estate
|
|
$
|
232
|
|
|
$
|
253
|
|
Financed insurance premiums
|
|
$
|
1,115
|
|
|
$
|
1,060
|
|
Value of shares issued under dividend reinvestment plan
|
|
$
|
63
|
|
|
$
|
53
|
|
Value of common shares exchanged for OP units
|
|
$
|
206
|
|
|
$
|
98
|
|
Change in fair value of available-for-sale securities
|
|
$
|
33
|
|
|
$
|
31
|
|
Change in fair value of cash flow hedge
|
|
$
|
(48
|
)
|
|
$
|
(8,491
|
)
|
Reallocation of ownership percentage between parent and subsidiary
|
|
$
|
8
|
|
|
$
|
—
|
|
•
|
49
wholly-owned properties that meet our Community Centered Properties™ strategy; and
|
•
|
through our
81.4%
majority interest in our consolidated subsidiary, Pillarstone Capital REIT Operating Partnership LP, or Pillarstone OP, an interest in
14
consolidated properties that do not meet our Community Centered Properties™ strategy.
|
•
|
four
retail properties that meet our Community Centered Properties™ strategy; and
|
•
|
five
parcels of land held for future development.
|
|
|
June 30, 2017
|
||||||||||||||
|
|
Amortized Cost
|
|
Gains in Accumulated Other Comprehensive Income (Loss)
|
|
Losses in Accumulated Other Comprehensive Income (Loss)
|
|
Estimated Fair Value
|
||||||||
Real estate sector common stock
|
|
$
|
654
|
|
|
$
|
—
|
|
|
$
|
(104
|
)
|
|
$
|
550
|
|
Total available-for-sale securities
|
|
$
|
654
|
|
|
$
|
—
|
|
|
$
|
(104
|
)
|
|
$
|
550
|
|
|
|
December 31, 2016
|
||||||||||||||
|
|
Amortized Cost
|
|
Gains in Accumulated Other Comprehensive Income (Loss)
|
|
Losses in Accumulated Other Comprehensive Income (Loss)
|
|
Estimated Fair Value
|
||||||||
Real estate sector common stock
|
|
$
|
654
|
|
|
$
|
—
|
|
|
$
|
(137
|
)
|
|
$
|
517
|
|
Total available-for-sale securities
|
|
$
|
654
|
|
|
$
|
—
|
|
|
$
|
(137
|
)
|
|
$
|
517
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
|
|
|
|
|
||||
Tenant receivables
|
|
$
|
14,710
|
|
|
$
|
12,972
|
|
Accrued rents and other recoveries
|
|
13,813
|
|
|
14,237
|
|
||
Allowance for doubtful accounts
|
|
(8,041
|
)
|
|
(7,258
|
)
|
||
Total
|
|
$
|
20,482
|
|
|
$
|
19,951
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
|
|
|
|
|
||||
Leasing commissions
|
|
$
|
9,708
|
|
|
$
|
8,720
|
|
Deferred legal cost
|
|
275
|
|
|
—
|
|
||
Deferred financing cost
|
|
4,071
|
|
|
4,071
|
|
||
Total cost
|
|
14,054
|
|
|
12,791
|
|
||
Less: leasing commissions accumulated amortization
|
|
(4,137
|
)
|
|
(3,597
|
)
|
||
Less: deferred legal cost accumulated amortization
|
|
(44
|
)
|
|
—
|
|
||
Less: deferred financing cost accumulated amortization
|
|
(1,590
|
)
|
|
(1,111
|
)
|
||
Total cost, net of accumulated amortization
|
|
$
|
8,283
|
|
|
$
|
8,083
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Real estate assets, at cost
|
|
|
|
|
||||
Property
|
|
$
|
93,776
|
|
|
$
|
92,338
|
|
Accumulated depreciation
|
|
(34,998
|
)
|
|
(32,533
|
)
|
||
Total real estate assets
|
|
58,778
|
|
|
59,805
|
|
||
Cash and cash equivalents
|
|
2,088
|
|
|
1,236
|
|
||
Escrows and acquisition deposits
|
|
1,442
|
|
|
2,274
|
|
||
Accrued rents and accounts receivable, net of allowance for doubtful accounts
(1)
|
|
2,316
|
|
|
2,313
|
|
||
Unamortized lease commissions and loan costs
|
|
1,117
|
|
|
1,150
|
|
||
Prepaid expenses and other assets
(2)
|
|
195
|
|
|
82
|
|
||
Total assets
|
|
$
|
65,936
|
|
|
$
|
66,860
|
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
||||
Notes payable
(3)
|
|
$
|
49,427
|
|
|
$
|
50,001
|
|
Accounts payable and accrued expenses
(4)
|
|
2,550
|
|
|
3,481
|
|
||
Tenants' security deposits
|
|
1,074
|
|
|
996
|
|
||
Total liabilities
|
|
$
|
53,051
|
|
|
$
|
54,478
|
|
(1)
|
Excludes approximately
$1.1 million
and
$0.5 million
in accounts receivable due from Whitestone that were eliminated in consolidation as of
June 30, 2017
and
December 31, 2016
, respectively.
|
(2)
|
Excludes approximately
$0.9 million
in prepaid expenses due from Whitestone that were eliminated in consolidation as of
December 31, 2016
.
|
(3)
|
Excludes approximately
$15.5 million
and
$15.5 million
in notes payable due to Whitestone that were eliminated in consolidation as of
June 30, 2017
and
December 31, 2016
, respectively.
|
(4)
|
Excludes approximately
$0.8 million
and
$0.3 million
in accounts payable due to Whitestone that were eliminated in consolidation as of
June 30, 2017
and
December 31, 2016
, respectively.
|
Description
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Fixed rate notes
|
|
|
|
|
||||
$10.5 million, LIBOR plus 2.00% Note, due September 24, 2018
(1)
|
|
$
|
9,860
|
|
|
$
|
9,980
|
|
$50.0 million, 0.84% plus 1.35% to 1.90% Note, due October 30, 2020
(2)
|
|
50,000
|
|
|
50,000
|
|
||
$50.0 million, 1.50% plus 1.35% to 1.90% Note, due January 29, 2021
(3)
|
|
50,000
|
|
|
50,000
|
|
||
$100.0 million, 1.73% plus 1.65% to 2.25% Note, due October 30, 2022
(4)
|
|
100,000
|
|
|
100,000
|
|
||
$80.0 million, 3.72% Note, due June 1, 2027
|
|
80,000
|
|
|
—
|
|
||
$37.0 million 3.76% Note, due December 1, 2020
(5)
|
|
33,662
|
|
|
34,166
|
|
||
$6.5 million 3.80% Note, due January 1, 2019
|
|
5,931
|
|
|
6,019
|
|
||
$19.0 million 4.15% Note, due December 1, 2024
|
|
19,000
|
|
|
19,000
|
|
||
$20.2 million 4.28% Note, due June 6, 2023
|
|
19,535
|
|
|
19,708
|
|
||
$14.0 million 4.34% Note, due September 11, 2024
|
|
14,000
|
|
|
14,000
|
|
||
$14.3 million 4.34% Note, due September 11, 2024
|
|
14,300
|
|
|
14,300
|
|
||
$16.5 million 4.97% Note, due September 26, 2023
(5)
|
|
16,178
|
|
|
16,298
|
|
||
$15.1 million 4.99% Note, due January 6, 2024
|
|
14,971
|
|
|
15,060
|
|
||
$9.2 million, Prime Rate less 2.00% Note, due December 29, 2017
(6)
|
|
7,852
|
|
|
7,869
|
|
||
$2.6 million 5.46% Note, due October 1, 2023
|
|
2,492
|
|
|
2,512
|
|
||
$1.1 million 2.97% Note, due November 28, 2017
|
|
543
|
|
|
—
|
|
||
Floating rate notes
|
|
|
|
|
||||
Unsecured line of credit, LIBOR plus 1.40% to 1.95%, due October 30, 2019
(7)
|
|
227,200
|
|
|
186,600
|
|
||
Total notes payable principal
|
|
665,524
|
|
|
545,512
|
|
||
Less deferred financing costs, net of accumulated amortization
|
|
(2,044
|
)
|
|
(1,492
|
)
|
||
Total notes payable
|
|
$
|
663,480
|
|
|
$
|
544,020
|
|
(1)
|
Promissory note includes an interest rate swap that fixed the interest rate at
3.55%
for the duration of the term.
|
(2)
|
Promissory note includes an interest rate swap that fixed the LIBOR portion of Term Loan 1 (as defined below) at
0.84%
through February 3, 2017 and
1.75%
beginning February 3, 2017 through October 30, 2020.
|
(3)
|
Promissory note includes an interest rate swap that fixed the LIBOR portion of Term Loan 2 (as defined below) at
1.50%
.
|
(4)
|
Promissory note includes an interest rate swap that fixed the LIBOR portion of Term Loan 3 (as defined below) at
1.73%
,
|
(5)
|
Promissory notes were assumed by Pillarstone in December 2016.
|
(6)
|
Promissory note includes an interest rate swap that fixed the interest rate at
5.72%
for the duration of the term. As part of our acquisition of Paradise Plaza in August 2012, we recorded a discount on the note of
$1.3 million
, which amortizes into interest expense over the life of the loan and results in an imputed interest rate of
4.13%
.
|
(7)
|
Unsecured line of credit includes certain Pillarstone Properties described in more detail below.
|
•
|
extended the maturity date of the
$300 million
unsecured revolving credit facility under the 2014 Facility (the “Revolver”) to October 30, 2019 from November 7, 2018;
|
•
|
converted
$100 million
of outstanding borrowings under the Revolver to a new
$100 million
unsecured term loan under the 2014 Facility (“Term Loan 3”) with a maturity date of October 30, 2022;
|
•
|
extended the maturity date of the first
$50 million
unsecured term loan under the 2014 Facility (“Term Loan 1”) to October 30, 2020 from February 17, 2017; and
|
•
|
extended the maturity date of the second
$50 million
unsecured term loan under the 2014 Facility (“Term Loan 2” and together with Term Loan 1 and Term Loan 3, the “Term Loans”) to January 29, 2021 from November 7, 2019.
|
Year
|
|
Amount Due
|
||
|
|
|
||
2017
|
|
$
|
9,667
|
|
2018
|
|
12,136
|
|
|
2019
|
|
235,249
|
|
|
2020
|
|
82,827
|
|
|
2021
|
|
51,918
|
|
|
Thereafter
|
|
273,727
|
|
|
Total
|
|
$
|
665,524
|
|
|
|
Balance Sheet Location
|
|
Estimated Fair Value
|
||
Interest rate swaps:
|
|
|
|
|
||
June 30, 2017
|
|
Accounts payable and accrued expenses
|
|
$
|
(790
|
)
|
December 31, 2016
|
|
Accounts payable and accrued expenses
|
|
$
|
(662
|
)
|
|
|
Amount Recognized as Comprehensive Income (Loss)
|
|
Location of Loss Recognized in Earnings
|
|
Amount of Loss Recognized in Earnings
(1)
|
||||
Three months ended June 30, 2017
|
|
$
|
(780
|
)
|
|
Interest expense
|
|
$
|
(441
|
)
|
Three months ended June 30, 2016
|
|
$
|
(2,450
|
)
|
|
Interest expense
|
|
$
|
(614
|
)
|
|
|
|
|
|
|
|
||||
Six months ended June 30, 2017
|
|
$
|
(48
|
)
|
|
Interest expense
|
|
$
|
(949
|
)
|
Six months ended June 30, 2016
|
|
$
|
(8,491
|
)
|
|
Interest expense
|
|
$
|
(1,208
|
)
|
(1)
|
There was no ineffective portion of our interest rate swaps to recognize in earnings for the three and
six
months ended
June 30, 2017
and
2016
.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
(in thousands, except per share data)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
2,144
|
|
|
$
|
1,509
|
|
|
$
|
3,701
|
|
|
$
|
6,597
|
|
Less: Net income attributable to noncontrolling interests
|
|
(161
|
)
|
|
(25
|
)
|
|
(279
|
)
|
|
(116
|
)
|
||||
Distributions paid on unvested restricted shares
|
|
(105
|
)
|
|
(197
|
)
|
|
(196
|
)
|
|
(352
|
)
|
||||
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares
|
|
$
|
1,878
|
|
|
$
|
1,287
|
|
|
$
|
3,226
|
|
|
$
|
6,129
|
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares - basic
|
|
35,716
|
|
|
26,819
|
|
|
32,583
|
|
|
26,712
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
||||||||
Unvested restricted shares
|
|
828
|
|
|
694
|
|
|
910
|
|
|
789
|
|
||||
Weighted average number of common shares - dilutive
|
|
36,544
|
|
|
27,513
|
|
|
33,493
|
|
|
27,501
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings Per Share:
|
|
|
|
|
|
|
|
|
||||||||
Basic:
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares
|
|
$
|
0.05
|
|
|
$
|
0.05
|
|
|
$
|
0.10
|
|
|
$
|
0.23
|
|
Diluted:
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares
|
|
$
|
0.05
|
|
|
$
|
0.05
|
|
|
$
|
0.10
|
|
|
$
|
0.22
|
|
|
|
Common Shares
|
|
Noncontrolling OP Unit Holders
|
|
Total
|
||||||||||||||
Quarter Paid
|
|
Distributions Per Common Share
|
|
Amount Paid
|
|
Distributions Per OP Unit
|
|
Amount Paid
|
|
Amount Paid
|
||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Second Quarter
|
|
$
|
0.2850
|
|
|
$
|
10,093
|
|
|
$
|
0.2850
|
|
|
$
|
310
|
|
|
$
|
10,403
|
|
First Quarter
|
|
0.2850
|
|
|
8,453
|
|
|
0.2850
|
|
|
313
|
|
|
8,766
|
|
|||||
Total
|
|
$
|
0.5700
|
|
|
$
|
18,546
|
|
|
$
|
0.5700
|
|
|
$
|
623
|
|
|
$
|
19,169
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fourth Quarter
|
|
$
|
0.2850
|
|
|
$
|
8,305
|
|
|
$
|
0.2850
|
|
|
$
|
314
|
|
|
$
|
8,619
|
|
Third Quarter
|
|
0.2850
|
|
|
8,109
|
|
|
0.2850
|
|
|
138
|
|
|
8,247
|
|
|||||
Second Quarter
|
|
0.2850
|
|
|
7,786
|
|
|
0.2850
|
|
|
138
|
|
|
7,924
|
|
|||||
First Quarter
|
|
0.2850
|
|
|
7,711
|
|
|
0.2850
|
|
|
139
|
|
|
7,850
|
|
|||||
Total
|
|
$
|
1.1400
|
|
|
$
|
31,911
|
|
|
$
|
1.1400
|
|
|
$
|
729
|
|
|
$
|
32,640
|
|
|
|
Shares
|
|
Weighted Average
Grant Date
Fair Value
|
|||
Non-vested at January 1, 2017
|
|
2,044,334
|
|
|
$
|
14.48
|
|
Granted
|
|
85,650
|
|
|
12.90
|
|
|
Vested
|
|
(399,005
|
)
|
|
14.62
|
|
|
Forfeited
|
|
(11,327
|
)
|
|
14.18
|
|
|
Non-vested at June 30, 2017
|
|
1,719,652
|
|
|
$
|
14.37
|
|
Available for grant at June 30, 2017
|
|
2,004,432
|
|
|
|
|
|
Shares Granted
|
|
Shares Vested
|
||||||||||
|
|
Non-Vested Shares Issued
|
|
Weighted Average Grant-Date Fair Value
|
|
Vested Shares
|
|
Total Vest-Date Fair Value
|
||||||
|
|
|
|
|
|
|
|
(in thousands)
|
||||||
Six Months Ended June 30, 2017
|
|
85,650
|
|
|
$
|
12.90
|
|
|
(399,005
|
)
|
|
$
|
5,832
|
|
Year Ended December 31, 2016
|
|
545,778
|
|
|
$
|
14.85
|
|
|
(734,261
|
)
|
|
$
|
10,577
|
|
Year Ended December 31, 2015
|
|
327,122
|
|
|
$
|
13.49
|
|
|
(348,786
|
)
|
|
$
|
4,969
|
|
Year Ended December 31, 2014
|
|
2,058,930
|
|
|
$
|
14.40
|
|
|
(133,774
|
)
|
|
$
|
1,721
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(in thousands, except per share data)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Total property revenues
|
|
$
|
32,407
|
|
|
$
|
28,672
|
|
|
$
|
64,271
|
|
|
$
|
57,648
|
|
Net income
|
|
$
|
3,231
|
|
|
$
|
2,262
|
|
|
$
|
5,939
|
|
|
$
|
8,486
|
|
Net income attributable to Whitestone REIT
(1)
|
|
$
|
3,038
|
|
|
$
|
2,224
|
|
|
$
|
5,588
|
|
|
$
|
8,337
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic Earnings Per Share:
|
|
$
|
0.08
|
|
|
$
|
0.06
|
|
|
$
|
0.14
|
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted Earnings Per Share:
|
|
$
|
0.08
|
|
|
$
|
0.06
|
|
|
$
|
0.14
|
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
(2)
|
|
37,831
|
|
|
34,838
|
|
|
37,634
|
|
|
34,731
|
|
||||
Diluted
(2)
|
|
38,659
|
|
|
35,532
|
|
|
38,544
|
|
|
35,520
|
|
(1)
|
Net income attributable to Whitestone REIT reflects historical ownership percentages and does not reflect the effects of the April Offering, assuming the sale of the common shares took place on January 1, 2016, as the related impact on ownership percentage is minimal.
|
(2)
|
Pro forma weighted averages reflect the April Offering, assuming the sale of the common shares took place on January 1, 2016.
|
•
|
the imposition of federal taxes if we fail to qualify as a REIT in any taxable year or forego an opportunity to ensure REIT status;
|
•
|
uncertainties related to the national economy, the real estate industry in general and in our specific markets;
|
•
|
legislative or regulatory changes, including changes to laws governing REITs;
|
•
|
adverse economic or real estate developments in Texas, Arizona or Illinois;
|
•
|
increases in interest rates and operating costs;
|
•
|
availability and terms of capital and financing, both to fund our operations and to refinance our indebtedness as it matures;
|
•
|
decreases in rental rates or increases in vacancy rates;
|
•
|
litigation risks;
|
•
|
lease-up risks, including leasing risks arising from exclusivity and consent provisions in leases with significant tenants;
|
•
|
our ability to successfully finance and complete acquisitions and related development projects and, if completed, the ability of such newly acquired and new development properties to perform as we expect;
|
•
|
our inability to renew tenant leases or obtain new tenant leases upon the expiration of existing leases;
|
•
|
our inability to generate sufficient cash flows due to market conditions, competition, uninsured losses, changes in tax or other applicable laws; and
|
•
|
the need to fund tenant improvements or other capital expenditures out of operating cash flow.
|
•
|
49
wholly-owned properties that meet our Community Centered Properties™ strategy containing approximately
4.9 million
square feet of gross leasable area (“GLA”) and having a total carrying amount (net of accumulated depreciation) of
$895.3 million
; and
|
•
|
as a result of the Contribution (as defined below), a majority interest in
14
consolidated properties that do not meet our Community Centered Properties™ strategy containing approximately
1.5 million
square feet of GLA and having a total carrying amount (net of accumulated depreciation) of
$60.0 million
; and
|
•
|
four
retail properties that meet our Community Centered Properties™ strategy containing approximately
0.2 million
square feet of GLA and having a total carrying value (net of accumulated depreciation) of
$50.7 million
; and
|
•
|
five
parcels of land held for future development having a total carrying value of
$15.9 million
.
|
|
|
Number of Leases Signed
|
|
GLA Signed
|
|
Weighted Average Lease Term
(2)
|
|
TI and Incentives per Sq. Ft.
(3)
|
|
Contractual Rent Per Sq. Ft
(4)
|
|
Prior Contractual Rent Per Sq. Ft.
(5)
|
|
Straight-lined Basis Increase Over Prior Rent
|
||||||||||
Comparable
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Renewal Leases
|
|
111
|
|
|
276,152
|
|
|
3.1
|
|
|
$
|
1.64
|
|
|
$
|
15.01
|
|
|
$
|
14.93
|
|
|
6.6
|
%
|
New Leases
|
|
16
|
|
|
28,108
|
|
|
4.5
|
|
|
5.22
|
|
|
17.16
|
|
|
17.19
|
|
|
3.5
|
%
|
|||
Total
|
|
127
|
|
|
304,260
|
|
|
3.2
|
|
|
$
|
1.97
|
|
|
$
|
15.21
|
|
|
$
|
15.14
|
|
|
6.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Number of Leases Signed
|
|
GLA Signed
|
|
Weighted Average Lease Term
(2)
|
|
TI and Incentives per Sq. Ft.
(3)
|
|
Contractual Rent Per Sq. Ft
(4)
|
|
|
|
|
||||||||||
Non-Comparable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Renewal Leases
|
|
4
|
|
|
17,467
|
|
|
3.7
|
|
|
$
|
6.90
|
|
|
$
|
19.65
|
|
|
|
|
|
|||
New Leases
|
|
49
|
|
|
136,957
|
|
|
6.7
|
|
|
12.74
|
|
|
19.07
|
|
|
|
|
|
|||||
Total
|
|
53
|
|
|
154,424
|
|
|
6.3
|
|
|
$
|
13.68
|
|
|
$
|
19.14
|
|
|
|
|
|
(1)
|
Comparable leases represent leases signed on spaces for which there was a former tenant within the last twelve months and the new or renewal square footage was within 25% of the expired square footage.
|
(2)
|
Weighted average lease term is determined on the basis of square footage.
|
(3)
|
Estimated amount per signed leases. Actual cost of construction may vary. Does not include first generation costs for tenant improvements (“TI”) and leasing commission costs needed for new acquisitions or redevelopment of a property to bring to operating standards for its intended use.
|
(4)
|
Contractual minimum rent under the new lease for the first month, excluding concessions.
|
(5)
|
Contractual minimum rent under the prior lease for the final month.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Capital expenditures:
|
|
|
|
|
|
|
|
|
||||||||
Tenant improvements and allowances
|
|
$
|
1,323
|
|
|
$
|
1,434
|
|
|
$
|
2,877
|
|
|
$
|
2,518
|
|
Developments / redevelopments
|
|
698
|
|
|
4,521
|
|
|
2,940
|
|
|
7,210
|
|
||||
Leasing commissions and costs
|
|
1,084
|
|
|
575
|
|
|
1,538
|
|
|
1,011
|
|
||||
Maintenance capital expenditures
|
|
1,702
|
|
|
736
|
|
|
2,462
|
|
|
1,327
|
|
||||
Total capital expenditures
|
|
$
|
4,807
|
|
|
$
|
7,266
|
|
|
$
|
9,817
|
|
|
$
|
12,066
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Number of properties wholly-owned and operated
|
|
58
|
|
|
55
|
|
||
Aggregate GLA (sq. ft.)
(1)
|
|
5,023,009
|
|
|
4,350,017
|
|
||
Ending occupancy rate - wholly-owned operating portfolio
(1)
|
|
90
|
%
|
|
90
|
%
|
||
Ending occupancy rate - all wholly-owned properties
|
|
89
|
%
|
|
89
|
%
|
||
|
|
|
|
|
||||
Number of properties managed and consolidated
|
|
14
|
|
|
14
|
|
||
Aggregate GLA (sq. ft.)
|
|
1,531,737
|
|
|
1,531,737
|
|
||
Ending occupancy rate - managed and consolidated operating portfolio
|
|
78
|
%
|
|
81
|
%
|
||
|
|
|
|
|
||||
Total property revenues
|
|
$
|
30,208
|
|
|
$
|
25,129
|
|
Total property expenses
|
|
9,862
|
|
|
7,987
|
|
||
Total other expenses
|
|
18,057
|
|
|
15,604
|
|
||
Provision for income taxes
|
|
89
|
|
|
11
|
|
||
Gain on sale of properties
|
|
(16
|
)
|
|
—
|
|
||
Loss on disposal of assets
|
|
72
|
|
|
18
|
|
||
Net income
|
|
2,144
|
|
|
1,509
|
|
||
Less: Net income attributable to noncontrolling interests
|
|
161
|
|
|
25
|
|
||
Net income attributable to Whitestone REIT
|
|
$
|
1,983
|
|
|
$
|
1,484
|
|
|
|
|
|
|
||||
Funds from operations core
(2)
|
|
$
|
11,649
|
|
|
$
|
9,218
|
|
Property net operating income
(3)
|
|
20,346
|
|
|
17,142
|
|
||
Distributions paid on common shares and OP units
|
|
10,403
|
|
|
7,924
|
|
||
Distributions per common share and OP unit
|
|
$
|
0.2850
|
|
|
$
|
0.2850
|
|
Distributions paid as a percentage of funds from operations core
|
|
89
|
%
|
|
86
|
%
|
(1)
|
Excludes (i) new acquisitions, through the earlier of attainment of 90% occupancy or 18 months of ownership, and (ii) properties that are undergoing significant redevelopment or re-tenanting.
|
(2)
|
For a reconciliation of funds from operations core to net income, see “—Reconciliation of Non-GAAP Financial Measures—Funds From Operations (“FFO”) Core” below.
|
(3)
|
For a reconciliation of property net operating income to net income, see “—Reconciliation of Non-GAAP Financial Measures—Property Net Operating Income (“NOI”)” below.
|
|
|
Three Months Ended June 30,
|
|
|
|
|
|||||||||
Overall Property Expenses
|
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|||||||
Real estate taxes
|
|
$
|
4,487
|
|
|
$
|
3,304
|
|
|
$
|
1,183
|
|
|
36
|
%
|
Utilities
|
|
1,260
|
|
|
1,140
|
|
|
120
|
|
|
11
|
%
|
|||
Contract services
|
|
1,794
|
|
|
1,569
|
|
|
225
|
|
|
14
|
%
|
|||
Repairs and maintenance
|
|
967
|
|
|
773
|
|
|
194
|
|
|
25
|
%
|
|||
Bad debt
|
|
298
|
|
|
389
|
|
|
(91
|
)
|
|
(23
|
)%
|
|||
Labor and other
|
|
1,056
|
|
|
812
|
|
|
244
|
|
|
30
|
%
|
|||
Total property expenses
|
|
$
|
9,862
|
|
|
$
|
7,987
|
|
|
$
|
1,875
|
|
|
23
|
%
|
|
|
Three Months Ended June 30,
|
|
|
|
|
|||||||||
Same Store Property Expenses
|
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|||||||
Real estate taxes
|
|
$
|
3,371
|
|
|
$
|
2,762
|
|
|
$
|
609
|
|
|
22
|
%
|
Utilities
|
|
860
|
|
|
830
|
|
|
30
|
|
|
4
|
%
|
|||
Contract services
|
|
1,283
|
|
|
1,333
|
|
|
(50
|
)
|
|
(4
|
)%
|
|||
Repairs and maintenance
|
|
726
|
|
|
606
|
|
|
120
|
|
|
20
|
%
|
|||
Bad debt
|
|
236
|
|
|
369
|
|
|
(133
|
)
|
|
(36
|
)%
|
|||
Labor and other
|
|
621
|
|
|
623
|
|
|
(2
|
)
|
|
—
|
%
|
|||
Total property expenses
|
|
$
|
7,097
|
|
|
$
|
6,523
|
|
|
$
|
574
|
|
|
9
|
%
|
|
|
Three Months Ended June 30,
|
|
|
|
|
||||||||
Non-Same Store Property Expenses
|
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
||||||
Real estate taxes
|
|
$
|
489
|
|
|
$
|
14
|
|
|
$
|
475
|
|
|
Not meaningful
|
Utilities
|
|
90
|
|
|
12
|
|
|
78
|
|
|
Not meaningful
|
|||
Contract services
|
|
217
|
|
|
6
|
|
|
211
|
|
|
Not meaningful
|
|||
Repairs and maintenance
|
|
78
|
|
|
(3
|
)
|
|
81
|
|
|
Not meaningful
|
|||
Bad debt
|
|
46
|
|
|
(5
|
)
|
|
51
|
|
|
Not meaningful
|
|||
Labor and other
|
|
76
|
|
|
12
|
|
|
64
|
|
|
Not meaningful
|
|||
Total property expenses
|
|
$
|
996
|
|
|
$
|
36
|
|
|
$
|
960
|
|
|
Not meaningful
|
|
|
Three Months Ended June 30,
|
|
|
|
Percent
|
|||||||||
|
|
2017
|
|
2016
|
|
Change
|
|
Change
|
|||||||
Same Store (49 properties, exclusive of land held for development)
|
|
|
|
|
|
|
|
|
|||||||
Property revenues
|
|
|
|
|
|
|
|
|
|||||||
Rental revenues
|
|
$
|
16,820
|
|
|
$
|
16,315
|
|
|
$
|
505
|
|
|
3
|
%
|
Other revenues
|
|
5,706
|
|
|
4,976
|
|
|
730
|
|
|
15
|
%
|
|||
Total property revenues
|
|
22,526
|
|
|
21,291
|
|
|
1,235
|
|
|
6
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Property expenses
|
|
|
|
|
|
|
|
|
|||||||
Property operation and maintenance
|
|
3,726
|
|
|
3,761
|
|
|
(35
|
)
|
|
(1
|
)%
|
|||
Real estate taxes
|
|
3,371
|
|
|
2,762
|
|
|
609
|
|
|
22
|
%
|
|||
Total property expenses
|
|
7,097
|
|
|
6,523
|
|
|
574
|
|
|
9
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Total Same Store net operating income
|
|
15,429
|
|
|
14,768
|
|
|
661
|
|
|
4
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Non-Same Store (4 Properties, exclusive of land held for development)
|
|
|
|
|
|
|
|
|
|||||||
Property revenues
|
|
|
|
|
|
|
|
|
|||||||
Rental revenues
|
|
3,004
|
|
|
111
|
|
|
2,893
|
|
|
Not meaningful
|
|
|||
Other revenues
|
|
841
|
|
|
40
|
|
|
801
|
|
|
Not meaningful
|
|
|||
Total property revenues
|
|
3,845
|
|
|
151
|
|
|
3,694
|
|
|
Not meaningful
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Property expenses
|
|
|
|
|
|
|
|
|
|||||||
Property operation and maintenance
|
|
507
|
|
|
22
|
|
|
485
|
|
|
Not meaningful
|
|
|||
Real estate taxes
|
|
489
|
|
|
14
|
|
|
475
|
|
|
Not meaningful
|
|
|||
Total property expenses
|
|
996
|
|
|
36
|
|
|
960
|
|
|
Not meaningful
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Total Non-Same Store net operating income
|
|
2,849
|
|
|
115
|
|
|
2,734
|
|
|
Not meaningful
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Consolidated Partnership properties (14 Properties)
|
|
|
|
|
|
|
|
|
|||||||
Property revenues
|
|
|
|
|
|
|
|
|
|||||||
Rental revenues
|
|
3,186
|
|
|
3,223
|
|
|
(37
|
)
|
|
(1
|
)%
|
|||
Other revenues
|
|
651
|
|
|
464
|
|
|
187
|
|
|
40
|
%
|
|||
Total property revenues
|
|
3,837
|
|
|
3,687
|
|
|
150
|
|
|
4
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Property expenses
|
|
|
|
|
|
|
|
|
|||||||
Property operation and maintenance
|
|
1,142
|
|
|
900
|
|
|
242
|
|
|
27
|
%
|
|||
Real estate taxes
|
|
627
|
|
|
528
|
|
|
99
|
|
|
19
|
%
|
|||
Total property expenses
|
|
1,769
|
|
|
1,428
|
|
|
341
|
|
|
24
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
Percent
|
|||||||||
|
|
2017
|
|
2016
|
|
Change
|
|
Change
|
|||||||
Total Consolidated Partnership properties net operating income
|
|
2,068
|
|
|
2,259
|
|
|
(191
|
)
|
|
(8
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Total property net operating income
|
|
20,346
|
|
|
17,142
|
|
|
3,204
|
|
|
19
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Less total other expenses, provision for income taxes, gain on sale of properties and loss on disposal of assets
|
|
18,202
|
|
|
15,633
|
|
|
2,569
|
|
|
16
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Net income
|
|
$
|
2,144
|
|
|
$
|
1,509
|
|
|
$
|
635
|
|
|
42
|
%
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
|
June 30,
|
|
|
|
|
|||||||||
|
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|||||||
General and administrative
|
|
$
|
5,848
|
|
|
$
|
5,413
|
|
|
$
|
435
|
|
|
8
|
%
|
Depreciation and amortization
|
|
6,681
|
|
|
5,521
|
|
|
1,160
|
|
|
21
|
%
|
|||
Interest expense
|
|
5,629
|
|
|
4,748
|
|
|
881
|
|
|
19
|
%
|
|||
Interest, dividend and other investment income
|
|
(101
|
)
|
|
(78
|
)
|
|
(23
|
)
|
|
29
|
%
|
|||
Total other expenses
|
|
$
|
18,057
|
|
|
$
|
15,604
|
|
|
$
|
2,453
|
|
|
16
|
%
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Number of properties wholly-owned and operated
|
|
58
|
|
|
55
|
|
||
Aggregate GLA (sq. ft.)
(1)
|
|
5,023,009
|
|
|
4,350,017
|
|
||
Ending occupancy rate - wholly-owned operating portfolio
(1)
|
|
90
|
%
|
|
90
|
%
|
||
Ending occupancy rate - all wholly-owned properties
|
|
89
|
%
|
|
89
|
%
|
||
|
|
|
|
|
||||
Number of properties managed and consolidated
|
|
14
|
|
|
14
|
|
||
Aggregate GLA (sq. ft.)
|
|
1,531,737
|
|
|
1,531,737
|
|
||
Ending occupancy rate - managed and consolidated operating portfolio
|
|
78
|
%
|
|
81
|
%
|
||
|
|
|
|
|
||||
Total property revenues
|
|
$
|
58,475
|
|
|
$
|
50,564
|
|
Total property expenses
|
|
19,276
|
|
|
16,135
|
|
||
Total other expenses
|
|
35,249
|
|
|
30,539
|
|
||
Provision for income taxes
|
|
170
|
|
|
167
|
|
||
Gain on sale of properties
|
|
(16
|
)
|
|
(2,890
|
)
|
||
Loss on disposal of assets
|
|
95
|
|
|
16
|
|
||
Net income
|
|
3,701
|
|
|
6,597
|
|
||
Less: Net income attributable to noncontrolling interests
|
|
279
|
|
|
116
|
|
||
Net income attributable to Whitestone REIT
|
|
$
|
3,422
|
|
|
$
|
6,481
|
|
|
|
|
|
|
||||
Funds from operations core
(2)
|
|
$
|
21,828
|
|
|
$
|
18,920
|
|
Property net operating income
(3)
|
|
39,199
|
|
|
34,429
|
|
||
Distributions paid on common shares and OP units
|
|
19,169
|
|
|
15,774
|
|
||
Distributions per common share and OP unit
|
|
$
|
0.5700
|
|
|
$
|
0.5700
|
|
Distributions paid as a percentage of funds from operations core
|
|
88
|
%
|
|
83
|
%
|
(1)
|
Excludes (i) new acquisitions, through the earlier of attainment of 90% occupancy or 18 months of ownership, and (ii) properties that are undergoing significant redevelopment or re-tenanting.
|
(2)
|
For a reconciliation of funds from operations core to net income, see “—Reconciliation of Non-GAAP Financial Measures—Funds From Operations (“FFO”) Core” below.
|
(3)
|
For a reconciliation of property net operating income to net income, see “—Reconciliation of Non-GAAP Financial Measures—Property Net Operating Income (“NOI”)” below.
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|||||||||
Overall Property Expenses
|
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|||||||
Real estate taxes
|
|
$
|
8,407
|
|
|
$
|
6,658
|
|
|
$
|
1,749
|
|
|
26
|
%
|
Utilities
|
|
2,496
|
|
|
2,236
|
|
|
260
|
|
|
12
|
%
|
|||
Contract services
|
|
3,430
|
|
|
2,994
|
|
|
436
|
|
|
15
|
%
|
|||
Repairs and maintenance
|
|
2,094
|
|
|
1,729
|
|
|
365
|
|
|
21
|
%
|
|||
Bad debt
|
|
907
|
|
|
763
|
|
|
144
|
|
|
19
|
%
|
|||
Labor and other
|
|
1,942
|
|
|
1,755
|
|
|
187
|
|
|
11
|
%
|
|||
Total property expenses
|
|
$
|
19,276
|
|
|
$
|
16,135
|
|
|
$
|
3,141
|
|
|
19
|
%
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|||||||||
Same Store Property Expenses
|
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|||||||
Real estate taxes
|
|
$
|
6,537
|
|
|
$
|
5,571
|
|
|
$
|
966
|
|
|
17
|
%
|
Utilities
|
|
1,704
|
|
|
1,634
|
|
|
70
|
|
|
4
|
%
|
|||
Contract services
|
|
2,499
|
|
|
2,498
|
|
|
1
|
|
|
—
|
%
|
|||
Repairs and maintenance
|
|
1,595
|
|
|
1,348
|
|
|
247
|
|
|
18
|
%
|
|||
Bad debt
|
|
780
|
|
|
733
|
|
|
47
|
|
|
6
|
%
|
|||
Labor and other
|
|
1,335
|
|
|
1,334
|
|
|
1
|
|
|
—
|
%
|
|||
Total property expenses
|
|
$
|
14,450
|
|
|
$
|
13,118
|
|
|
$
|
1,332
|
|
|
10
|
%
|
|
|
Six Months Ended June 30,
|
|
|
|
|
||||||||
Non-Same Store Property Expenses
|
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
||||||
Real estate taxes
|
|
$
|
603
|
|
|
$
|
44
|
|
|
$
|
559
|
|
|
Not meaningful
|
Utilities
|
|
158
|
|
|
26
|
|
|
132
|
|
|
Not meaningful
|
|||
Contract services
|
|
329
|
|
|
18
|
|
|
311
|
|
|
Not meaningful
|
|||
Repairs and maintenance
|
|
130
|
|
|
—
|
|
|
130
|
|
|
Not meaningful
|
|||
Bad debt
|
|
65
|
|
|
(22
|
)
|
|
87
|
|
|
Not meaningful
|
|||
Labor and other
|
|
131
|
|
|
57
|
|
|
74
|
|
|
Not meaningful
|
|||
Total property expenses
|
|
$
|
1,416
|
|
|
$
|
123
|
|
|
$
|
1,293
|
|
|
Not meaningful
|
|
|
Six Months Ended June 30,
|
|
|
|
Percent
|
|||||||||
|
|
2017
|
|
2016
|
|
Change
|
|
Change
|
|||||||
Same Store (49 properties, exclusive of land held for development)
|
|
|
|
|
|
|
|
|
|||||||
Property revenues
|
|
|
|
|
|
|
|
|
|||||||
Rental revenues
|
|
$
|
33,488
|
|
|
$
|
32,398
|
|
|
$
|
1,090
|
|
|
3
|
%
|
Other revenues
|
|
11,472
|
|
|
10,306
|
|
|
1,166
|
|
|
11
|
%
|
|||
Total property revenues
|
|
44,960
|
|
|
42,704
|
|
|
2,256
|
|
|
5
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Property expenses
|
|
|
|
|
|
|
|
|
|||||||
Property operation and maintenance
|
|
7,913
|
|
|
7,547
|
|
|
366
|
|
|
5
|
%
|
|||
Real estate taxes
|
|
6,537
|
|
|
5,571
|
|
|
966
|
|
|
17
|
%
|
|||
Total property expenses
|
|
14,450
|
|
|
13,118
|
|
|
1,332
|
|
|
10
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Total Same Store net operating income
|
|
30,510
|
|
|
29,586
|
|
|
924
|
|
|
3
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Non-Same Store (4 Properties, exclusive of land held for development)
|
|
|
|
|
|
|
|
|
|||||||
Property revenues
|
|
|
|
|
|
|
|
|
|||||||
Rental revenues
|
|
4,405
|
|
|
259
|
|
|
4,146
|
|
|
Not meaningful
|
|
|||
Other revenues
|
|
1,442
|
|
|
105
|
|
|
1,337
|
|
|
Not meaningful
|
|
|||
Total property revenues
|
|
5,847
|
|
|
364
|
|
|
5,483
|
|
|
Not meaningful
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Property expenses
|
|
|
|
|
|
|
|
|
|||||||
Property operation and maintenance
|
|
813
|
|
|
79
|
|
|
734
|
|
|
Not meaningful
|
|
|||
Real estate taxes
|
|
603
|
|
|
44
|
|
|
559
|
|
|
Not meaningful
|
|
|||
Total property expenses
|
|
1,416
|
|
|
123
|
|
|
1,293
|
|
|
Not meaningful
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Total Non-Same Store net operating income
|
|
4,431
|
|
|
241
|
|
|
4,190
|
|
|
Not meaningful
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Consolidated Partnership properties (14 Properties)
|
|
|
|
|
|
|
|
|
|||||||
Property revenues
|
|
|
|
|
|
|
|
|
|||||||
Rental revenues
|
|
6,413
|
|
|
6,414
|
|
|
(1
|
)
|
|
—
|
%
|
|||
Other revenues
|
|
1,255
|
|
|
1,082
|
|
|
173
|
|
|
16
|
%
|
|||
Total property revenues
|
|
7,668
|
|
|
7,496
|
|
|
172
|
|
|
2
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Property expenses
|
|
|
|
|
|
|
|
|
|||||||
Property operation and maintenance
|
|
2,143
|
|
|
1,851
|
|
|
292
|
|
|
16
|
%
|
|||
Real estate taxes
|
|
1,267
|
|
|
1,043
|
|
|
224
|
|
|
21
|
%
|
|||
Total property expenses
|
|
3,410
|
|
|
2,894
|
|
|
516
|
|
|
18
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|||||||||
|
|
June 30,
|
|
|
|
|
|||||||||
|
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|||||||
General and administrative
|
|
$
|
12,017
|
|
|
$
|
10,249
|
|
|
$
|
1,768
|
|
|
17
|
%
|
Depreciation and amortization
|
|
12,689
|
|
|
10,913
|
|
|
1,776
|
|
|
16
|
%
|
|||
Interest expense
|
|
10,782
|
|
|
9,552
|
|
|
1,230
|
|
|
13
|
%
|
|||
Interest, dividend and other investment income
|
|
(239
|
)
|
|
(175
|
)
|
|
(64
|
)
|
|
37
|
%
|
|||
Total other expenses
|
|
$
|
35,249
|
|
|
$
|
30,539
|
|
|
$
|
4,710
|
|
|
15
|
%
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
FFO and FFO CORE
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income attributable to Whitestone REIT
|
|
$
|
1,983
|
|
|
$
|
1,484
|
|
|
$
|
3,422
|
|
|
$
|
6,481
|
|
Adjustments to reconcile to FFO:
(1)
|
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization of real estate assets
|
|
6,445
|
|
|
5,479
|
|
|
12,240
|
|
|
10,790
|
|
||||
(Gain) loss on sale or disposal of assets and properties
|
|
55
|
|
|
18
|
|
|
77
|
|
|
(2,874
|
)
|
||||
Net income attributable to noncontrolling interests
|
|
60
|
|
|
25
|
|
|
114
|
|
|
116
|
|
||||
FFO
|
|
8,543
|
|
|
7,006
|
|
|
15,853
|
|
|
14,513
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Adjustments to reconcile to FFO Core:
|
|
|
|
|
|
|
|
|
||||||||
Share-based compensation expense
|
|
2,390
|
|
|
1,819
|
|
|
4,841
|
|
|
3,844
|
|
||||
Acquisition costs
|
|
716
|
|
|
393
|
|
|
1,134
|
|
|
563
|
|
||||
FFO Core
|
|
$
|
11,649
|
|
|
$
|
9,218
|
|
|
$
|
21,828
|
|
|
$
|
18,920
|
|
(1)
|
Includes pro-rata share attributable to Pillarstone.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
PROPERTY NET OPERATING INCOME
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income attributable to Whitestone REIT
|
|
$
|
1,983
|
|
|
$
|
1,484
|
|
|
$
|
3,422
|
|
|
$
|
6,481
|
|
General and administrative expenses
|
|
5,848
|
|
|
5,413
|
|
|
12,017
|
|
|
10,249
|
|
||||
Depreciation and amortization
|
|
6,681
|
|
|
5,521
|
|
|
12,689
|
|
|
10,913
|
|
||||
Interest expense
|
|
5,629
|
|
|
4,748
|
|
|
10,782
|
|
|
9,552
|
|
||||
Interest, dividend and other investment income
|
|
(101
|
)
|
|
(78
|
)
|
|
(239
|
)
|
|
(175
|
)
|
||||
Provision for income taxes
|
|
89
|
|
|
11
|
|
|
170
|
|
|
167
|
|
||||
Gain on sale of properties
|
|
(16
|
)
|
|
—
|
|
|
(16
|
)
|
|
(2,890
|
)
|
||||
Loss on disposal of assets
|
|
72
|
|
|
18
|
|
|
95
|
|
|
16
|
|
||||
Net income attributable to noncontrolling interests
|
|
161
|
|
|
25
|
|
|
279
|
|
|
116
|
|
||||
NOI
|
|
$
|
20,346
|
|
|
$
|
17,142
|
|
|
$
|
39,199
|
|
|
$
|
34,429
|
|
•
|
Cash flow from operations of
$13,704,000
for the
six
months ended
June 30, 2017
;
|
•
|
Net proceeds of
$40,600,000
from the Facility;
|
•
|
Net proceeds of
$107,619,000
from issuance of common shares;
|
•
|
Proceeds of
$26,000
from sale of property;
|
•
|
Payment of distributions to common shareholders, OP unit holders and noncontrolling interests in Consolidated Partnership of
$19,435,000
;
|
•
|
Acquisitions of real estate of
$124,557,000
;
|
•
|
Additions to real estate of
$8,279,000
;
|
•
|
Change in restricted cash of
$71,000
;
|
•
|
Payments of loan origination costs of
$695,000
;
|
•
|
Repurchase of common shares of
$1,987,000
; and
|
•
|
Payments of notes payable of
$1,826,000
.
|
Description
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Fixed rate notes
|
|
|
|
|
||||
$10.5 million, LIBOR plus 2.00% Note, due September 24, 2018
(1)
|
|
$
|
9,860
|
|
|
$
|
9,980
|
|
$50.0 million, 0.84% plus 1.35% to 1.90% Note, due October 30, 2020
(2)
|
|
50,000
|
|
|
50,000
|
|
||
$50.0 million, 1.50% plus 1.35% to 1.90% Note, due January 29, 2021
(3)
|
|
50,000
|
|
|
50,000
|
|
||
$100.0 million, 1.73% plus 1.65% to 2.25% Note, due October 30, 2022
(4)
|
|
100,000
|
|
|
100,000
|
|
||
$80.0 million, 3.72% Note, due June 1, 2027
|
|
80,000
|
|
|
—
|
|
||
$37.0 million 3.76% Note, due December 1, 2020
(5)
|
|
33,662
|
|
|
34,166
|
|
||
$6.5 million 3.80% Note, due January 1, 2019
|
|
5,931
|
|
|
6,019
|
|
||
$19.0 million 4.15% Note, due December 1, 2024
|
|
19,000
|
|
|
19,000
|
|
||
$20.2 million 4.28% Note, due June 6, 2023
|
|
19,535
|
|
|
19,708
|
|
||
$14.0 million 4.34% Note, due September 11, 2024
|
|
14,000
|
|
|
14,000
|
|
||
$14.3 million 4.34% Note, due September 11, 2024
|
|
14,300
|
|
|
14,300
|
|
||
$16.5 million 4.97% Note, due September 26, 2023
(5)
|
|
16,178
|
|
|
16,298
|
|
||
$15.1 million 4.99% Note, due January 6, 2024
|
|
14,971
|
|
|
15,060
|
|
||
$9.2 million, Prime Rate less 2.00% Note, due December 29, 2017
(6)
|
|
7,852
|
|
|
7,869
|
|
||
$2.6 million 5.46% Note, due October 1, 2023
|
|
2,492
|
|
|
2,512
|
|
||
$1.1 million 2.97% Note, due November 28, 2017
|
|
543
|
|
|
—
|
|
||
Floating rate notes
|
|
|
|
|
||||
Unsecured line of credit, LIBOR plus 1.40% to 1.95%, due October 30, 2019
(7)
|
|
227,200
|
|
|
186,600
|
|
||
Total notes payable principal
|
|
665,524
|
|
|
545,512
|
|
||
Less deferred financing costs, net of accumulated amortization
|
|
(2,044
|
)
|
|
(1,492
|
)
|
||
|
|
$
|
663,480
|
|
|
$
|
544,020
|
|
(1)
|
Promissory note includes an interest rate swap that fixed the interest rate at
3.55%
for the duration of the term.
|
(2)
|
Promissory note includes an interest rate swap that fixed the LIBOR portion of Term Loan 1 (as defined below) at
0.84%
through February 3, 2017 and
1.75%
beginning February 3, 2017 through October 30, 2020.
|
(3)
|
Promissory note includes an interest rate swap that fixed the LIBOR portion of Term Loan 2 (as defined below) at
1.50%
.
|
(4)
|
Promissory note includes an interest rate swap that fixed the LIBOR portion of Term Loan 3 (as defined below) at
1.73%
,
|
(5)
|
Promissory notes were assumed by Pillarstone in December 2016.
|
(6)
|
Promissory note includes an interest rate swap that fixed the interest rate at
5.72%
for the duration of the term. As part of our acquisition of Paradise Plaza in August 2012, we recorded a discount on the note of
$1.3 million
, which amortizes into interest expense over the life of the loan and results in an imputed interest rate of
4.13%
.
|
(7)
|
Unsecured line of credit includes certain Pillarstone Properties described in more detail below.
|
•
|
extended the maturity date of the
$300 million
unsecured revolving credit facility under the 2014 Facility (the “Revolver”) to October 30, 2019 from November 7, 2018;
|
•
|
converted
$100 million
of outstanding borrowings under the Revolver to a new
$100 million
unsecured term loan under the 2014 Facility (“Term Loan 3”) with a maturity date of October 30, 2022;
|
•
|
extended the maturity date of the first
$50 million
unsecured term loan under the 2014 Facility (“Term Loan 1”) to October 30, 2020 from February 17, 2017; and
|
•
|
extended the maturity date of the second
$50 million
unsecured term loan under the 2014 Facility (“Term Loan 2” and together with Term Loan 1 and Term Loan 3, the “Term Loans”) to January 29, 2021 from November 7, 2019.
|
|
|
|
||
Year
|
|
Amount Due
|
||
|
|
|
||
2017
|
|
$
|
9,667
|
|
2018
|
|
12,136
|
|
|
2019
|
|
235,249
|
|
|
2020
|
|
82,827
|
|
|
2021
|
|
51,918
|
|
|
Thereafter
|
|
273,727
|
|
|
Total
|
|
$
|
665,524
|
|
|
|
Common Shares
|
|
Noncontrolling OP Unit Holders
|
|
Total
|
||||||||||||||
Quarter Paid
|
|
Distributions Per Common Share
|
|
Amount Paid
|
|
Distributions Per OP Unit
|
|
Amount Paid
|
|
Amount Paid
|
||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Second Quarter
|
|
$
|
0.2850
|
|
|
$
|
10,093
|
|
|
$
|
0.2850
|
|
|
$
|
310
|
|
|
$
|
10,403
|
|
First Quarter
|
|
0.2850
|
|
|
8,453
|
|
|
0.2850
|
|
|
313
|
|
|
8,766
|
|
|||||
Total
|
|
$
|
0.5700
|
|
|
$
|
18,546
|
|
|
$
|
0.5700
|
|
|
$
|
623
|
|
|
$
|
19,169
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fourth Quarter
|
|
$
|
0.2850
|
|
|
$
|
8,305
|
|
|
$
|
0.2850
|
|
|
$
|
314
|
|
|
$
|
8,619
|
|
Third Quarter
|
|
0.2850
|
|
|
8,109
|
|
|
0.2850
|
|
|
138
|
|
|
8,247
|
|
|||||
Second Quarter
|
|
0.2850
|
|
|
7,786
|
|
|
0.2850
|
|
|
138
|
|
|
7,924
|
|
|||||
First Quarter
|
|
0.2850
|
|
|
7,711
|
|
|
0.2850
|
|
|
139
|
|
|
7,850
|
|
|||||
Total
|
|
$
|
1.1400
|
|
|
$
|
31,911
|
|
|
$
|
1.1400
|
|
|
$
|
729
|
|
|
$
|
32,640
|
|
(a)
|
During the period covered by this Form 10-Q, we did not sell any equity securities that were not registered under the Securities Act of 1933, as amended.
|
(b)
|
Not applicable.
|
(c)
|
Issuer Purchases of Equity Securities
|
Period
|
|
Total Number of Shares Purchased
(1)
|
|
Average Price Paid for Shares
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs
|
|||
April 1, 2017 through April 30, 2017
|
|
22,814
|
|
|
$
|
13.84
|
|
|
N/A
|
|
N/A
|
May 1, 2017 through May 31, 2017
|
|
—
|
|
|
—
|
|
|
N/A
|
|
N/A
|
|
June 1, 2017 through June 30, 2017
|
|
88,304
|
|
|
12.25
|
|
|
N/A
|
|
N/A
|
|
Total
|
|
111,118
|
|
|
$
|
12.58
|
|
|
|
|
|
|
|
|
|
WHITESTONE REIT
|
Date:
|
August 4, 2017
|
|
|
/s/ James C. Mastandrea
|
|
|
|
|
James C. Mastandrea
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
Date:
|
August 4, 2017
|
|
|
/s/ David K. Holeman
|
|
|
|
|
David K. Holeman
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial and Principal Accounting Officer)
|
EXHIBIT INDEX
|
Exhibit No.
|
Description
|
3.1.1
|
Articles of Amendment and Restatement of Declaration of Trust (previously filed as and incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K, filed on July 31, 2008)
|
3.1.2
|
Articles Supplementary (previously filed as and incorporated by reference to Exhibit 3(i).1 to the Registrant's Current Report on Form 8-K, filed on December 6, 2006)
|
3.1.3
|
Articles of Amendment (previously filed as and incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K, filed on August 24, 2010)
|
3.1.4
|
Articles of Amendment (previously filed as and incorporated by reference to Exhibit 3.2 to the Registrant's Current Report on Form 8-K, filed on August 24, 2010)
|
3.1.5
|
Articles Supplementary (previously filed as and incorporated by reference to Exhibit 3.3 to the Registrant's Current Report on Form 8-K, filed on August 24, 2010)
|
3.1.6
|
Articles of Amendment (previously filed as and incorporated by reference to Exhibit 3.1.1 to the Registrant's Current Report on Form 8-K, filed on June 27, 2012)
|
3.1.7
|
Articles of Amendment (previously filed as and incorporated by reference to Exhibit 3.1.2 to Registrant's Current Report on Form 8-K, filed on June 27, 2012)
|
3.2
|
Amended and Restated Bylaws (previously filed as and incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K, filed on October 9, 2008)
|
10.1*
|
Agreement of Purchase and Sale, dated as of March 21, 2017, between Whitestone REIT Operating Partnership, L.P. and Phase II Boulevard Place, LP
|
10.2*
|
First Amendment to Agreement of Purchase and Sale, dated as of April 17, 2017, between Whitestone REIT Operating Partnership, L.P. and Phase II Boulevard Place, LP
|
10.3*
|
Second Amendment to Agreement of Purchase and Sale, dated as of May 19, 2017, between Whitestone REIT Operating Partnership, L.P. and Phase II Boulevard Place, LP
|
10.4
|
2018 Long-Term Equity Incentive Ownership Plan (previously filed as and incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K, filed on May 12, 2017)
|
12.1*
|
Statement of Calculation of Consolidated Ratio of Earnings to Fixed Charges.
|
31.1*
|
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2*
|
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32.1**
|
Certificate of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2**
|
Certificate of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101.INS***
|
XBRL Instance Document
|
|
|
101.SCH***
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL***
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.LAB***
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
101.PRE***
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
101.DEF***
|
XBRL Taxonomy Extension Definition Linkbase Document
|
ARTICLE I PURCHASE AND SALE OF PROPERTY
|
1
|
Section 1.1
|
Sale. 1
|
Section 1.2
|
Purchase Price; Default. 2
|
ARTICLE II CONDITIONS
|
4
|
Section 2.1
|
Buyer’s Conditions Precedent. 4
|
Section 2.2
|
Contingency Period. 5
|
Section 2.3
|
Buyer’s Right to Terminate. 5
|
Section 2.4
|
Conditions to Closing. 6
|
ARTICLE III Representations and warranties
|
7
|
Section 3.1
|
Representations and Warranties of Seller. 7
|
Section 3.2
|
No Liability for Exception Matters. 9
|
Section 3.3
|
Survival of Representations and Warranties of Seller. 10
|
Section 3.4
|
Seller’s Knowledge. 11
|
Section 3.5
|
Representations and Warranties of Buyer. 11
|
Section 3.6
|
No Reliance. 12
|
Section 3.7
|
Disclaimer; 13
|
Section 3.8
|
Release. 14
|
Section 3.9
|
Survival. 15
|
ARTICLE IV BUYER’S INSPECTIONS; TITLE AND SURVEY
|
15
|
Section 4.1
|
Buyer’s Independent Investigation. 15
|
Section 4.2
|
Permitted Exceptions. 20
|
Section 4.3
|
Evidence of Title. 22
|
ARTICLE V RISK OF LOSS AND INSURANCE PROCEEDS
|
22
|
Section 5.1
|
Minor Loss. 22
|
Section 5.2
|
Major Loss. 23
|
ARTICLE VI BROKERS AND EXPENSES
|
24
|
Section 6.1
|
Brokers. 24
|
Section 6.2
|
Expenses. 24
|
ARTICLE VII LEASES AND OTHER AGREEMENTS
|
24
|
Section 7.1
|
Buyer’s Approval of New Leases and Agreements Affecting the Property. 24
|
Section 7.2
|
Tenant Improvement Costs, Leasing Commissions and Concessions. 25
|
Section 7.3
|
Tenant Notices. 26
|
Section 7.4
|
Maintenance of Improvements and Operation of Property; Removal of Tangible Personal Property. 26
|
Section 7.5
|
Service Contracts. 26
|
Section 7.6
|
Post Closing Cooperation. 27
|
Section 7.7
|
SEC S-X 3-14 Audit. 27
|
ARTICLE VIII CLOSING AND ESCROW
|
28
|
Section 8.1
|
Escrow Instructions. 28
|
Section 8.2
|
Closing. 28
|
Section 8.3
|
Deposit of Documents. 28
|
Section 8.4
|
Estoppel Certificates. 31
|
Section 8.5
|
Prorations. 33
|
ARTICLE IX MISCELLANEOUS
|
37
|
Section 9.1
|
Notices. 37
|
Section 9.2
|
Entire Agreement. 38
|
Section 9.3
|
Intentionally Omitted. 38
|
Section 9.4
|
Time; Business Days. 38
|
Section 9.5
|
Attorneys’ Fees. 38
|
Section 9.6
|
Assignment. 39
|
Section 9.7
|
Counterparts. 39
|
Section 9.8
|
Governing Law. 39
|
Section 9.9
|
Confidentiality and Return of Documents. 39
|
Section 9.10
|
Interpretation of Agreement. 41
|
Section 9.11
|
Limited Liability. 41
|
Section 9.12
|
Amendments. 41
|
Section 9.13
|
No Recording. 41
|
Section 9.14
|
Drafts
Not an Offer to Enter into a Legally Binding
|
Section 9.15
|
Intentionally Omitted. 42
|
Section 9.16
|
No Partnership. 42
|
Section 9.17
|
No Third Party Beneficiary. 42
|
Section 9.18
|
Waiver of Jury Trial. 42
|
Section 9.19
|
Limitation on Liability. 42
|
Section 9.20
|
Survival. 43
|
Section 9.21
|
Survival of Article IX. 44
|
Section 9.22
|
Utility Service Notice. 44
|
Section 9.23
|
Severability. 44
|
Additional Deposit
|
3
|
Assignment of Leases
|
28
|
Assignment of Service Contracts
|
28
|
Bailard Fund
|
42
|
Breach Notice
|
10
|
Broker
|
23
|
Buyer Group
|
14
|
Buyer’s Notice
|
20
|
CAP Amount
|
42
|
Closing
|
27
|
Closing Date
|
28
|
Closing Payment
|
3
|
Contingency Period
|
5
|
Deed
|
21
|
Deed Restrictions Notice
|
28
|
Delivery Period
|
4
|
Deposit
|
3
|
Disclosure Items
|
6
|
Discovery Date
|
10
|
Due Diligence Inspections
|
15
|
Embargoed Person
|
9
|
Environmental Laws
|
19
|
Escrow Conditions
|
27
|
Estoppel Threshold
|
31
|
Exception Instruments
|
19
|
Exception Matter
|
9
|
Floor Amount
|
42
|
Governmental Authority
|
17
|
Hazardous Materials
|
19
|
Improvements
|
1
|
Indemnified Party
|
23
|
Independent Consideration
|
2
|
Initial Deposit
|
2
|
Intangible Personal Property
|
2
|
Joinder
|
42
|
Land
|
1
|
Leases
|
4
|
Liens
|
20
|
Limitation Period
|
10
|
List
|
8
|
Local Property Manager
|
1
|
Major Tenants
|
31
|
OFAC
|
8
|
Other Documents
|
42
|
Owner’s Affidavit
|
28
|
Permitted Exceptions
|
21
|
person
|
40
|
Phase IIB Land
|
2
|
Protected Information
|
15
|
Purchase Price
|
2
|
Real Property
|
1
|
Rent
Roll
|
7
|
Reporting Person
|
30
|
Rule 3-14
|
27
|
SEC
|
27
|
SEC Filing Information
|
27
|
Seller Group
|
17
|
Seller’s Response
|
20
|
Seller’s Response Period
|
20
|
Service Contracts
|
4
|
SP Notice
|
3
|
Survey
|
19
|
Tangible Personal Property
|
1
|
Title Company
|
2
|
Title Policy
|
21
|
Title Report
|
19
|
Title Report Update
|
20
|
Title Review Date
|
20
|
Title Update Review Period
|
20
|
U.S. Publicly-Traded Entity
|
9
|
To Buyer:
|
Whitestone REIT Operating Partnership
2600 S. Gessner Road, Suite 500
Houston, TX 77063-3223
Attn: Attn: Bradford D. Johnson, Vice President Acquisitions & Asset Management
Email:
bjohnson@whitestonereit.com
|
with copies to:
|
Whitestone REIT Operating Partnership
2600 S. Gessner Road, Suite 500
Houston, TX 77063-3223
Attn: Attn: Doug Pyne, Corporate Counsel
Email: dpyne@whitestonereit.com
Locke Lord LLP
600 Travis Suite 2800
Houston, Texas 77002
Attn: Scott Hunsaker
Email:
shunsaker@lockelord.com
|
To Seller:
|
Phase II Boulevard Place, LP
c/o Bailard
950 Tower Lane, Suite 1900
Foster City, CA 94404-2131
Attn: Preston Sargent, Executive Vice President
Email:
psargent@bailard.com
|
With a copy to:
|
HFF
9 Greenway Plaza, Suite 700
Houston, TX 77046
Attn: Rusty Tamlyn, Senior Managing Director
Email:
rtamlyn@hfflp.com
|
And to:
|
Seyfarth Shaw, LLP
700 Milam, Suite 1400
Houston, TX 77002
Attn: Peter M. Oxman
Email:
poxman@seyfarth.com
|
SELLER
:
|
PHASE II BOULEVARD PLACE, LP, a Texas limited partnership
By: Phase II Boulevard Place GP, LLC, a Texas limited liability company, its general partner
By: Boulevard Place, L.P., a Texas
limited partnership, its manager
By: Wulfe Boulevard Venture, LLC, a Texas limited liability company, its general partner
By:
/s/ Edmond D. Wulfe
Name:
Edmond D. Wulfe
Title:
President
|
BUYER
:
|
WHITESTONE REIT OPERATING PARTNERSHIP, L.P., a Delaware limited partnership
By: Whitestone REIT, a Maryland real estate investment trust, its general partner
By:
/s/ James C. Mastandrea
Name:
James C. Mastandrea
Title:
Chairman and Chief Executive Officer
|
|||
|
|
|||
|
|
|
Exhibit A
|
Real Property Description
|
Exhibit A-1
|
Depiction of Phase IIB Land
|
Exhibit B
|
Lease Schedule
|
Exhibit B-1
|
Rent Roll
|
Exhibit B-2
|
Receivables Report
|
Exhibit B-3
|
List of Service Contracts
|
Exhibit C
|
Deed
|
Exhibit D
|
Bill of Sale
|
Exhibit E
|
Assignment of Leases
|
Exhibit E-1
|
Assignment of Service Contracts
|
Exhibit E-2
|
Form of FIRPTA Certificate
|
Exhibit E-3
|
Form of Owner’s Affidavit
|
Exhibit F
|
Estoppel Certificate
|
Exhibit G
|
Escrow Conditions
|
Exhibit H
|
SEC Rule 3-14 Information
|
Schedule 3.1
|
Disclosure Items
|
My Commission Expires:
|
________________________________________
|
_____________________
|
Notary Public, State of ______________
|
Assignor:
|
,
a |
|
By:
Its: |
Assignee:
|
|
|
a
|
|
By:
|
|
Its:
|
|
By:
|
|
Its:
|
Assignor:
|
,
a |
|
By:
Its: |
Assignee:
|
|
|
a
|
|
By:
|
|
Its:
|
Assignor:
|
,
a |
|
By:
Its: |
Assignee:
|
|
|
a
|
|
By:
|
|
Its:
|
1.
|
Transferor is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations);
|
2.
|
Transferor is not a disregarded entity as defined in § 1.1445-2(b)(2)(iii);
|
3.
|
Transferor's U.S. employer identification number is _______________; and
|
4.
|
Transferor's office address is: 1700 Post Oak Boulevard, Suite 400, Houston, Texas 77056.
|
EXECUTED: _______________ , 2017.
|
TENANT:
|
|
|
|
By:
|
|
Its:
|
(A)
|
If this is not practical as the cash accounts have been commingled with other properties, please provide the bank statements along with other additional support to be able to segregate deposits by property for the corresponding period.
|
SELLER
:
|
PHASE II BOULEVARD PLACE, LP, a Texas limited partnership
By: Phase II Boulevard Place GP, LLC, a Texas limited liability company, its general partner
By: Boulevard Place, L.P., a Texas
limited partnership, its manager
By: Wulfe Boulevard Venture, LLC, a Texas limited liability company, its general partner
By:
/s/ Edmond D. Wulfe
Name:
Edmond D. Wulfe
Title:
President
|
BUYER
:
|
WHITESTONE REIT OPERATING PARTNERSHIP, L.P., a Delaware limited partnership
By: Whitestone REIT, a Maryland real estate investment trust, its general partner
By:
/s/ Bradford D. Johnson
Name:
Bradford D. Johnson
Title:
Vice President - Acquisitions
|
|||
|
|
|||
|
|
|
|
Six Months
|
|
|
|
|
|
|
||||||||||||
|
Ended June 30,
|
|
Year Ended December 31,
|
||||||||||||||||
|
2017
|
|
2016
|
2015
|
2014
|
2013
|
2012
|
||||||||||||
Earnings
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) from continuing operations
|
$
|
3,701
|
|
|
$
|
8,128
|
|
$
|
6,854
|
|
$
|
5,349
|
|
$
|
3,621
|
|
$
|
(165
|
)
|
Plus: Taxes
|
170
|
|
|
289
|
|
372
|
|
282
|
|
293
|
|
275
|
|
||||||
Plus: Fixed charges
|
11,094
|
|
|
20,189
|
|
15,122
|
|
10,672
|
|
10,089
|
|
9,084
|
|
||||||
Total earnings
|
$
|
14,965
|
|
|
$
|
28,606
|
|
$
|
22,348
|
|
$
|
16,303
|
|
$
|
14,003
|
|
$
|
9,194
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed charges
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
$
|
10,314
|
|
|
$
|
18,311
|
|
$
|
13,804
|
|
$
|
9,680
|
|
$
|
8,929
|
|
$
|
7,482
|
|
Plus: Capitalized Interest
|
156
|
|
|
324
|
|
106
|
|
93
|
|
114
|
|
176
|
|
||||||
Plus: Amortization of deferred financing costs
|
624
|
|
|
1,554
|
|
1,212
|
|
899
|
|
1,046
|
|
1,426
|
|
||||||
Total fixed charges
|
$
|
11,094
|
|
|
$
|
20,189
|
|
$
|
15,122
|
|
$
|
10,672
|
|
$
|
10,089
|
|
$
|
9,084
|
|
|
|
|
|
|
|
|
|
||||||||||||
Ratio of earnings to fixed charges
|
1.35
|
|
|
1.42
|
|
1.48
|
|
1.53
|
|
1.39
|
|
1.01
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q, for the period ended
June 30, 2017
, of Whitestone REIT;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
1.
|
I have reviewed this quarterly report on Form 10-Q, for the period ended
June 30, 2017
, of Whitestone REIT;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ James C. Mastandrea
|
James C. Mastandrea
|
Chairman and Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ David K. Holeman
|
David K. Holeman
|
Chief Financial Officer
|