Maryland
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76-0594970
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(State or Other Jurisdiction of Incorporation or
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(I.R.S. Employer
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Organization)
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Identification No.)
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2600 South Gessner, Suite 500, Houston, Texas
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77063
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Shares of Beneficial Interest, par value $0.001 per share
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WSR
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New York Stock Exchange
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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•
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the imposition of federal taxes if we fail to qualify as a real estate investment trust (“REIT”) in any taxable year or forego an opportunity to ensure REIT status;
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•
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uncertainties related to the national economy, the real estate industry in general and in our specific markets;
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•
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legislative or regulatory changes, including changes to laws governing REITs;
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•
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adverse economic or real estate developments or conditions in Texas or Arizona, Houston and Phoenix in particular;
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•
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increases in interest rates, operating costs or general and administrative expenses;
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•
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availability and terms of capital and financing to fund our operations, distributions to shareholders and to refinance our indebtedness as it matures;
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•
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decreases in rental rates or increases in vacancy rates;
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•
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litigation risks;
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•
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lease-up risks, including leasing risks arising from exclusivity and consent provisions in leases with significant tenants;
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•
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our inability to renew tenants or obtain new tenants upon the expiration of existing leases;
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•
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our inability to generate sufficient cash flows due to market conditions, competition, uninsured losses, changes in tax or other applicable laws;
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•
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the need to fund tenant improvements or other capital expenditures out of operating cash flow; and
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•
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the risk that we are unable to raise capital for working capital, acquisitions or other uses on attractive terms or at all.
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•
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Strategically Acquiring Properties.
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◦
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Seeking High Growth Markets. We seek to strategically acquire commercial properties in high-growth markets. Our acquisition targets are located in densely populated, culturally diverse neighborhoods, primarily in and around Austin, Chicago, Dallas-Fort Worth, Houston, Phoenix and San Antonio.
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◦
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Diversifying Geographically. Our current portfolio is concentrated in Houston and Phoenix. As of December 31, 2019, we wholly-owned 58 commercial properties, including 15 properties in Houston, eight properties in Dallas-Fort Worth, three properties in San Antonio, four properties in Austin, 27 properties in the Scottsdale and Phoenix, Arizona metropolitan areas, and one property in Buffalo Grove, Illinois, a suburb of Chicago.
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◦
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Capitalizing on Availability of Reasonably Priced Acquisition Opportunities. We believe that currently and during the next several years there will continue to be excellent opportunities in our target markets to acquire quality properties at historically attractive prices. We intend to acquire assets in off-market transactions negotiated directly with owners or financial institutions holding foreclosed real estate and debt instruments that are either in default or on bank watch lists. Many of these assets may benefit from our Community Centered Property® strategy and our management team’s experience in turning around distressed properties, portfolios and companies. We have extensive relationships with community banks, attorneys, title companies and others in the real estate industry with whom we regularly work to identify properties for potential acquisition.
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•
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Redeveloping and Re-tenanting Existing Properties. We have substantial experience in repositioning underperforming properties and seek to add value through renovating and re-tenanting our properties to create Whitestone-branded Community Centered Properties®. We seek to accomplish this by (1) stabilizing occupancy, with per property occupancy goals of 90% or higher; (2) adding leasable square footage to existing structures; (3) developing and building new leasable square footage on excess land; (4) upgrading and renovating existing structures; and (5) investing significant effort in recruiting tenants whose goods and services meet the needs of the surrounding neighborhood.
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•
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Recycling Capital for Greater Returns. We seek to continually upgrade our portfolio by opportunistically selling properties that do not have the potential to meet our Community Centered Property® strategy and redeploying the sale proceeds into properties that better fit our strategy. Some of our properties that we owned at the time our current management team assumed the management of the Company (the “non-core properties”) may not fit our Community Centered Property® strategy, and we may look for opportunities to dispose of these properties as we continue to execute our strategy.
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•
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Prudent Management of Capital Structure. Of our 58 properties, we currently have 50 properties that are unencumbered. We may seek to add mortgage indebtedness to existing and newly acquired unencumbered properties to provide additional capital for acquisitions. As a general policy, we intend to maintain a ratio of debt, net of cash, to undepreciated book value of real estate assets, including our proportional share of real estate from our unconsolidated real estate partnership, that is at or less than 60%. As of December 31, 2019, our ratio of debt, net of cash, to undepreciated book value of real estate assets was 56%.
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•
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Investing in People. We believe that our people are the heart of our culture, philosophy and strategy. We continually focus on developing associates who are self-disciplined and motivated and display, at all times, a high degree of character and competence. We provide them with equity incentives to align their interests with those of our shareholders.
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•
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conditions in financial markets;
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•
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continuing deterioration of the brick-and-mortar retail industry;
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•
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over-building in our markets;
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•
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a reduction in rental income as the result of the inability to maintain occupancy levels;
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•
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adverse changes in applicable tax, real estate, environmental or zoning laws;
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•
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changes in general economic conditions or economic conditions in our markets;
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•
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a taking of any of our properties by eminent domain;
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•
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adverse local conditions (such as changes in real estate zoning laws that may reduce the desirability of real estate in the area);
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•
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acts of God, such as hurricanes, earthquakes or floods, health and safety epidemics, such as the coranavirus outbreak and other uninsured losses;
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•
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changes in supply of or demand for similar or competing properties in an area;
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•
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changes in interest rates and availability of permanent debt capital, which may render the sale of a property difficult or unattractive; and
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•
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periods of high interest rates, inflation or tight money supply.
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•
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tenants may choose not to, or may not have the financial resources to, renew these leases;
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•
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we may experience significant costs associated with re-leasing a significant amount of our available space;
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•
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we may experience difficulties and significant time lags re-leasing vacated space, which may cause us to fail to meet our occupancy and average base rent targets and experience increased costs of re-leasing; and
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•
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the terms of any renewal or re-lease may be less favorable than the terms of the current leases.
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•
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competition from other real estate investors with significant capital, including other REITs and institutional investment funds;
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•
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competition from other potential acquirers which may significantly increase the purchase price for a property we acquire, which could reduce our growth prospects;
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•
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unsatisfactory results of our due diligence investigations or failure to meet other customary closing conditions;
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•
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the failure of an acquired property to perform as expected; and
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•
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failure to finance an acquisition on favorable terms or at all.
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•
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incur additional debt, including issuing guarantees;
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•
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incur liens;
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•
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make certain investments;
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•
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sell or otherwise dispose of assets;
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•
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make acquisitions;
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•
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engage in mergers or consolidations or certain other “change of control” transactions;
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•
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make distributions to our shareholders;
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•
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engage in restructuring activities;
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•
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engage in certain sale and leaseback transactions; and
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•
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issue or repurchase common shares or other securities.
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•
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a merger, tender offer or proxy contest;
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•
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assumption of control by a holder of a large block of our shares; or
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•
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removal of incumbent management.
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•
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we would not be allowed to deduct our distributions to shareholders when computing our taxable income;
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•
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we would be subject to federal income tax on our taxable income at regular corporate rates;
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•
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we would be disqualified from being taxed as a REIT for the four taxable years following the year during which qualification was lost, unless entitled to relief under certain statutory provisions;
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•
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our cash available for distributions to shareholders would be reduced; and
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•
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we may be required to borrow additional funds or sell some of our assets in order to pay corporate tax obligations that we may incur as a result of our disqualification.
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•
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the amount of cash available for distribution;
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•
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our Operating Partnership’s financial condition;
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•
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our Operating Partnership’s capital expenditure requirements; and
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•
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our annual distribution requirements necessary to maintain our qualification as a REIT.
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Commercial Properties
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GLA
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Average
Occupancy as of
12/31/19
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Annualized Base
Rental Revenue
(in thousands) (1)
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|
Average
Annualized Base
Rental Revenue
Per Sq. Ft. (2)
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||||||
Whitestone
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4,953,571
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90
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%
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|
$
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87,290
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$
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19.58
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(1)
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Calculated as the tenant’s actual December 31, 2019 base rent (defined as cash base rents including abatements) multiplied by 12. Excludes vacant space as of December 31, 2019. Because annualized base rental revenue is not derived from historical results that were accounted for in accordance with GAAP, historical results differ from the annualized amounts. Total abatements for leases in effect as of December 31, 2019 equaled approximately $76,000 for the month ended December 31, 2019.
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(2)
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Calculated as annualized base rent divided by GLA leased as of December 31, 2019. Excludes vacant space as of December 31, 2019.
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July
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Aug.
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Sept.
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Oct.
|
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Nov.
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|
Dec.
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||||||
National (1)
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|
3.7
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%
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3.7
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%
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3.5
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%
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3.6
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%
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3.5
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%
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|
3.5
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%
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|
Houston (2)
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|
4.0
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%
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|
3.9
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%
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|
3.6
|
%
|
|
3.5
|
%
|
|
3.6
|
%
|
|
3.6
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%
|
|
Phoenix (2)
|
|
4.8
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%
|
|
4.7
|
%
|
|
3.8
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%
|
|
3.7
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%
|
|
3.8
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%
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|
3.7
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%
|
(3)
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(1)
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Seasonally adjusted.
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(2)
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Not seasonally adjusted.
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(3)
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Represents estimate.
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Whitestone REIT and Subsidiaries
Property Details
As of December 31, 2019
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Community Name
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Location
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Year Built/
Renovated
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Gross Leasable
Square Feet
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Percent
Occupied at
12/31/2019
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|
Annualized Base
Rental Revenue
(in thousands) (1)
|
|
Average
Base Rental
Revenue Per
Sq. Ft. (2)
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Average Net Effective Annual Base Rent Per Leased Sq. Ft.(3)
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Whitestone Properties:
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Ahwatukee Plaza
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Phoenix
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1979
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72,650
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|
|
86
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%
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|
$
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826
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|
|
$
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13.22
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|
|
$
|
12.80
|
|
Anthem Marketplace
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Phoenix
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|
2000
|
|
113,293
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|
|
96
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%
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|
1,756
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|
|
16.15
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|
|
16.04
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|||
Anthem Marketplace Phase II
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Phoenix
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|
2019
|
|
6,853
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|
|
100
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%
|
|
63
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|
|
9.19
|
|
|
27.58
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|||
Bissonnet Beltway
|
|
Houston
|
|
1978
|
|
29,205
|
|
|
85
|
%
|
|
376
|
|
|
15.15
|
|
|
14.50
|
|
|||
BLVD Place
|
|
Houston
|
|
2014
|
|
216,944
|
|
|
99
|
%
|
|
8,739
|
|
|
40.69
|
|
|
43.48
|
|
|||
The Citadel
|
|
Phoenix
|
|
2013
|
|
28,547
|
|
|
99
|
%
|
|
502
|
|
|
17.76
|
|
|
16.42
|
|
|||
City View Village
|
|
San Antonio
|
|
2005
|
|
17,870
|
|
|
100
|
%
|
|
520
|
|
|
29.10
|
|
|
29.10
|
|
|||
Davenport Village
|
|
Austin
|
|
1999
|
|
128,934
|
|
|
97
|
%
|
|
3,250
|
|
|
25.99
|
|
|
25.71
|
|
|||
Desert Canyon
|
|
Phoenix
|
|
2000
|
|
62,533
|
|
|
95
|
%
|
|
873
|
|
|
14.70
|
|
|
14.38
|
|
|||
Eldorado Plaza
|
|
Dallas
|
|
2004
|
|
219,287
|
|
|
97
|
%
|
|
3,201
|
|
|
15.05
|
|
|
15.17
|
|
|||
Fountain Hills
|
|
Phoenix
|
|
2009
|
|
111,289
|
|
|
88
|
%
|
|
1,626
|
|
|
16.60
|
|
|
16.52
|
|
|||
Fountain Square
|
|
Phoenix
|
|
1986
|
|
118,209
|
|
|
80
|
%
|
|
1,741
|
|
|
18.41
|
|
|
17.86
|
|
|||
Fulton Ranch Towne Center
|
|
Phoenix
|
|
2005
|
|
120,575
|
|
|
92
|
%
|
|
1,881
|
|
|
16.96
|
|
|
18.93
|
|
|||
Gilbert Tuscany Village
|
|
Phoenix
|
|
2009
|
|
49,415
|
|
|
100
|
%
|
|
975
|
|
|
19.73
|
|
|
19.02
|
|
|||
Gilbert Tuscany Village Hard Corner
|
|
Phoenix
|
|
2009
|
|
14,603
|
|
|
100
|
%
|
|
124
|
|
|
8.49
|
|
|
8.90
|
|
|||
Heritage Trace Plaza
|
|
Dallas
|
|
2006
|
|
70,431
|
|
|
98
|
%
|
|
1,536
|
|
|
22.25
|
|
|
22.51
|
|
|||
Headquarters Village
|
|
Dallas
|
|
2009
|
|
89,134
|
|
|
79
|
%
|
|
2,149
|
|
|
30.52
|
|
|
30.86
|
|
|||
Keller Place
|
|
Dallas
|
|
2001
|
|
93,541
|
|
|
95
|
%
|
|
1,002
|
|
|
11.28
|
|
|
11.22
|
|
|||
Kempwood Plaza
|
|
Houston
|
|
1974
|
|
91,302
|
|
|
97
|
%
|
|
1,139
|
|
|
12.86
|
|
|
13.45
|
|
|||
La Mirada
|
|
Phoenix
|
|
1997
|
|
147,209
|
|
|
86
|
%
|
|
2,845
|
|
|
22.47
|
|
|
23.06
|
|
|||
Las Colinas Village
|
|
Dallas
|
|
2000
|
|
104,919
|
|
|
86
|
%
|
|
2,403
|
|
|
26.63
|
|
|
27.29
|
|
|||
Lion Square
|
|
Houston
|
|
2014
|
|
117,592
|
|
|
90
|
%
|
|
1,496
|
|
|
14.14
|
|
|
13.07
|
|
|||
The Marketplace at Central
|
|
Phoenix
|
|
2012
|
|
111,130
|
|
|
99
|
%
|
|
1,037
|
|
|
9.43
|
|
|
8.99
|
|
|||
Market Street at DC Ranch
|
|
Phoenix
|
|
2003
|
|
244,888
|
|
|
98
|
%
|
|
4,846
|
|
|
20.19
|
|
|
19.95
|
|
|||
Mercado at Scottsdale Ranch
|
|
Phoenix
|
|
1987
|
|
118,730
|
|
|
85
|
%
|
|
1,644
|
|
|
16.29
|
|
|
16.35
|
|
|||
Paradise Plaza
|
|
Phoenix
|
|
1983
|
|
125,898
|
|
|
90
|
%
|
|
1,421
|
|
|
12.54
|
|
|
13.22
|
|
|||
Parkside Village North
|
|
Austin
|
|
2005
|
|
27,045
|
|
|
100
|
%
|
|
826
|
|
|
30.54
|
|
|
30.87
|
|
|||
Parkside Village South
|
|
Austin
|
|
2012
|
|
90,101
|
|
|
91
|
%
|
|
2,173
|
|
|
26.50
|
|
|
26.55
|
|
|||
Pima Norte
|
|
Phoenix
|
|
2007
|
|
35,110
|
|
|
58
|
%
|
|
368
|
|
|
18.07
|
|
|
19.20
|
|
|||
Pinnacle of Scottsdale
|
|
Phoenix
|
|
1991
|
|
113,108
|
|
|
96
|
%
|
|
2,260
|
|
|
20.81
|
|
|
21.25
|
|
|||
Pinnacle Phase II
|
|
Phoenix
|
|
2017
|
|
27,063
|
|
|
100
|
%
|
|
750
|
|
|
27.71
|
|
|
26.16
|
|
|||
The Promenade at Fulton Ranch
|
|
Phoenix
|
|
2007
|
|
98,792
|
|
|
88
|
%
|
|
1,279
|
|
|
14.71
|
|
|
15.46
|
|
|||
Providence
|
|
Houston
|
|
1980
|
|
90,327
|
|
|
96
|
%
|
|
975
|
|
|
11.24
|
|
|
11.29
|
|
|||
Quinlan Crossing
|
|
Austin
|
|
2012
|
|
109,892
|
|
|
96
|
%
|
|
2,389
|
|
|
22.65
|
|
|
23.50
|
|
|||
Seville
|
|
Phoenix
|
|
1990
|
|
90,042
|
|
|
78
|
%
|
|
2,361
|
|
|
33.62
|
|
|
34.24
|
|
|||
Shaver
|
|
Houston
|
|
1978
|
|
21,926
|
|
|
100
|
%
|
|
342
|
|
|
15.60
|
|
|
15.55
|
|
|||
Shops at Pecos Ranch
|
|
Phoenix
|
|
2009
|
|
78,767
|
|
|
79
|
%
|
|
1,704
|
|
|
27.38
|
|
|
26.47
|
|
|||
Shops at Starwood
|
|
Dallas
|
|
2006
|
|
55,385
|
|
|
97
|
%
|
|
1,446
|
|
|
26.92
|
|
|
29.37
|
|
|||
The Shops at Williams Trace
|
|
Houston
|
|
1985
|
|
132,991
|
|
|
94
|
%
|
|
1,996
|
|
|
15.97
|
|
|
15.73
|
|
|||
South Richey
|
|
Houston
|
|
1980
|
|
69,928
|
|
|
100
|
%
|
|
757
|
|
|
10.83
|
|
|
10.85
|
|
|||
Spoerlein Commons
|
|
Chicago
|
|
1987
|
|
41,455
|
|
|
82
|
%
|
|
691
|
|
|
20.33
|
|
|
20.83
|
|
|||
Starwood Phase II
|
|
Dallas
|
|
2016
|
|
35,351
|
|
|
86
|
%
|
|
1,102
|
|
|
36.25
|
|
|
35.66
|
|
Whitestone REIT and Subsidiaries
Property Details
As of December 31, 2019
|
||||||||||||||||||||||
Community Name
|
|
Location
|
|
Year Built/
Renovated
|
|
Gross Leasable
Square Feet
|
|
Percent
Occupied at
12/31/2019
|
|
Annualized Base
Rental Revenue
(in thousands) (1)
|
|
Average
Base Rental
Revenue Per
Sq. Ft. (2)
|
|
Average Net Effective Annual Base Rent Per Leased Sq. Ft.(3)
|
||||||||
The Strand at Huebner Oaks
|
|
San Antonio
|
|
2000
|
|
73,920
|
|
|
97
|
%
|
|
1,639
|
|
|
22.86
|
|
|
22.80
|
|
|||
SugarPark Plaza
|
|
Houston
|
|
1974
|
|
95,032
|
|
|
100
|
%
|
|
1,222
|
|
|
12.86
|
|
|
13.03
|
|
|||
Sunridge
|
|
Houston
|
|
1979
|
|
49,359
|
|
|
79
|
%
|
|
528
|
|
|
13.54
|
|
|
12.54
|
|
|||
Sunset at Pinnacle Peak
|
|
Phoenix
|
|
2000
|
|
41,530
|
|
|
82
|
%
|
|
606
|
|
|
17.79
|
|
|
18.56
|
|
|||
Terravita Marketplace
|
|
Phoenix
|
|
1997
|
|
102,733
|
|
|
52
|
%
|
|
1,198
|
|
|
22.43
|
|
|
21.68
|
|
|||
Town Park
|
|
Houston
|
|
1978
|
|
43,526
|
|
|
100
|
%
|
|
1,002
|
|
|
23.02
|
|
|
22.01
|
|
|||
Village Square at Dana Park
|
|
Phoenix
|
|
2009
|
|
323,026
|
|
|
86
|
%
|
|
6,357
|
|
|
22.88
|
|
|
22.74
|
|
|||
Westchase
|
|
Houston
|
|
1978
|
|
50,332
|
|
|
88
|
%
|
|
642
|
|
|
14.49
|
|
|
14.04
|
|
|||
Williams Trace Plaza
|
|
Houston
|
|
1983
|
|
129,222
|
|
|
93
|
%
|
|
1,858
|
|
|
15.46
|
|
|
15.24
|
|
|||
Windsor Park
|
|
San Antonio
|
|
2012
|
|
196,458
|
|
|
97
|
%
|
|
1,879
|
|
|
9.86
|
|
|
9.58
|
|
|||
Woodlake Plaza
|
|
Houston
|
|
1974
|
|
106,169
|
|
|
62
|
%
|
|
969
|
|
|
14.72
|
|
|
14.16
|
|
|||
Total/Weighted Average - Whitestone Properties
|
|
|
|
|
|
4,953,571
|
|
|
90
|
%
|
|
87,290
|
|
|
19.58
|
|
|
19.77
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Land Held for Development:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
BLVD Phase II-B
|
|
Houston
|
|
N/A
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Dana Park Development
|
|
Phoenix
|
|
N/A
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Eldorado Plaza Development
|
|
Dallas
|
|
N/A
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Fountain Hills
|
|
Phoenix
|
|
N/A
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Market Street at DC Ranch
|
|
Phoenix
|
|
N/A
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total/Weighted Average - Land Held For Development (4)
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grand Total/Weighted Average - Whitestone Properties
|
|
|
|
|
|
4,953,571
|
|
|
90
|
%
|
|
$
|
87,290
|
|
|
$
|
19.58
|
|
|
$
|
19.77
|
|
(1)
|
Calculated as the tenant’s actual December 31, 2019 base rent (defined as cash base rents including abatements) multiplied by 12. Excludes vacant space as of December 31, 2019. Because annualized base rental revenue is not derived from historical results that were accounted for in accordance with generally accepted accounting principles, historical results differ from the annualized amounts. Total abatements for leases in effect as of December 31, 2019 equaled approximately $76,000 for the month ended December 31, 2019.
|
(2)
|
Calculated as annualized base rent divided by gross leasable area leased as of December 31, 2019. Excludes vacant space as of December 31, 2019.
|
(3)
|
Represents (i) the contractual base rent for leases in place as of December 31, 2019, adjusted to a straight-line basis to reflect changes in rental rates throughout the lease term and amortize free rent periods and abatements, but without regard to tenant improvement allowances and leasing commissions, divided by (ii) square footage under commenced leases of December 31, 2019.
|
(4)
|
As of December 31, 2019, these parcels of land were held for development and, therefore, had no gross leasable area.
|
Tenant Name
|
|
Location
|
|
Annualized Rental Revenue (in thousands)
|
|
Percentage of Total Annualized Base Rental Revenues (1)
|
|
Initial Lease Date
|
|
Year Expiring
|
|||
|
|
|
|
|
|
|
|
|
|
|
|||
Safeway Stores Incorporated (2)
|
|
Austin, Houston and Phoenix
|
|
$
|
2,498
|
|
|
2.9
|
%
|
|
11/14/1982, 5/8/1991, 7/1/2000, 4/1/2014, 4/1/2014 and 10/19/16
|
|
2021, 2021, 2022, 2024, 2025 and 2034
|
Whole Foods Market
|
|
Houston
|
|
2,042
|
|
|
2.3
|
%
|
|
9/3/2014
|
|
2035
|
|
Frost Bank
|
|
Houston
|
|
1,910
|
|
|
2.2
|
%
|
|
7/1/2014
|
|
2024
|
|
Newmark Real Estate of Houston LLC
|
|
Houston
|
|
1,029
|
|
|
1.2
|
%
|
|
10/1/2015
|
|
2026
|
|
Walgreens & Co. (3)
|
|
Houston and Phoenix
|
|
946
|
|
|
1.1
|
%
|
|
11/14/1982, 11/2/1987, 8/24/1996 and 11/3/1996
|
|
2022, 2027, 2049 and 2056
|
|
Verizon Wireless (4)
|
|
Houston and Phoenix
|
|
917
|
|
|
1.0
|
%
|
|
8/16/1994, 2/1/2004, 5/10/2004, 1/27/2006 and 5/1/2014
|
|
2020, 2022, 2023, 2024 and 2024
|
|
Bashas' Inc. (5)
|
|
Phoenix
|
|
848
|
|
|
1.0
|
%
|
|
10/9/2004 and 4/1/2009
|
|
2024 and 2029
|
|
Alamo Drafthouse Cinema
|
|
Austin
|
|
690
|
|
|
0.8
|
%
|
|
2/1/2012
|
|
2027
|
|
Dollar Tree (6)
|
|
Houston and Phoenix
|
|
628
|
|
|
0.7
|
%
|
|
8/10/1999, 6/29/2001, 11/8/2009, 12/17/2009, and 5/21/2013
|
|
2021, 2023, 2025, 2025 and 2027
|
|
Wells Fargo & Company (7)
|
|
Phoenix
|
|
565
|
|
|
0.6
|
%
|
|
10/24/1996 and 4/16/1999
|
|
2022 and 2023
|
|
Kroger Co.
|
|
Dallas
|
|
483
|
|
|
0.6
|
%
|
|
12/15/2000
|
|
2022
|
|
Ruth's Chris Steak House Inc.
|
|
Phoenix
|
|
466
|
|
|
0.5
|
%
|
|
1/1/1991
|
|
2030
|
|
Regus Corporation
|
|
Houston
|
|
442
|
|
|
0.5
|
%
|
|
5/23/2014
|
|
2025
|
|
Paul's Ace Hardware
|
|
Phoenix
|
|
427
|
|
|
0.5
|
%
|
|
3/1/2008
|
|
2023
|
|
Original Ninfas LP
|
|
Houston
|
|
395
|
|
|
0.5
|
%
|
|
8/29/2018
|
|
2029
|
|
|
|
|
|
$
|
14,286
|
|
|
16.4
|
%
|
|
|
|
|
(1)
|
Annualized Base Rental Revenues represents the monthly base rent as of December 31, 2019 for each applicable tenant multiplied by 12.
|
(2)
|
As of December 31, 2019, we had six leases with the same tenant occupying space at properties located in Phoenix, Houston and Austin. The annualized rental revenue for the lease that commenced on April 1, 2014, and is scheduled to expire in 2034, was $1,047,000, which represents approximately 1.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on April 1, 2014, and is scheduled to expire in 2024, was $43,000, which represents less than 0.1% of our annualized base rental revenue. The annualized rental revenue for the lease that commenced on May 8, 1991, and is scheduled to expire in 2021, was $344,000, which represents approximately 0.4% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on July 1, 2000, and is scheduled to expire in 2025, was $321,000, which represents approximately 0.4% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on November 14, 1982, and is scheduled to expire in 2022, was $318,000, which represents approximately 0.4% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on October 19, 2016, and is scheduled to expire in 2021, was $425,000, which represents approximately 0.5% of our total annualized base rental revenue.
|
(3)
|
As of December 31, 2019, we had four leases with the same tenant occupying space at properties located in Phoenix and Houston. The annualized rental revenue for the lease that commenced on November 3, 1996, and is scheduled to expire in 2049, was $279,000, which represents approximately 0.3% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on November 2, 1987, and is scheduled to expire in 2027, was $189,000, which represents approximately 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on November 14, 1982, and is scheduled to expire in 2022, was $181,000, which represents approximately 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on August 24, 1996, and is scheduled to expire in 2056, was $298,000, which represents approximately 0.3% of our total annualized rental revenue.
|
(4)
|
As of December 31, 2019, we had five leases with the same tenant occupying space at properties located in Phoenix and Houston. The annualized rental revenue for the lease that commenced on August 16, 1994, and is scheduled to expire in 2020, was $21,000, which represents less than 0.1% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on January 27, 2006, and is scheduled to expire in 2023, was $132,000, which represents approximately 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on February 1, 2004, and is scheduled to expire in 2024, was $38,000, which represents less than 0.1% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on May 1, 2014, and is scheduled to expire in 2024, was $719,000, which represents approximately 0.8% of our total annualized rental revenue. The annualized rental revenue for the lease that commenced on May 10, 2004, and is scheduled to expire in 2022, was $6,000, which represents less than 0.1% of our total annualized base rental revenue.
|
(5)
|
As of December 31, 2019, we had two leases with the same tenant occupying space at properties located in Phoenix. The annualized rental revenue for the lease that commenced on October 9, 2004, and is scheduled to expire in 2024, was $119,000, which represents approximately 0.1% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on April 1, 2009, and is scheduled to expire in 2029, was $729,000, which represents approximately 0.8% of our total annualized base rental revenue.
|
(6)
|
As of December 31, 2019, we had five leases with the same tenant occupying space at properties in Houston and Phoenix. The annualized rental revenue for the lease that commenced on August 10, 1999, and is scheduled to expire in 2025, was $88,000, which represents approximately 0.1% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on December 17, 2009, and is scheduled to expire in 2025, was $110,000, which represents approximately 0.1% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on June 29, 2001, and is scheduled to expire in 2021, was $169,000, which represents approximately 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on May 21, 2013, and is scheduled to expire in 2023, was $110,000, which represents approximately 0.1% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on November 8, 2009, and is scheduled to expire in 2027, was $151,000, which represents approximately 0.2% of our total annualized base rental revenue.
|
(7)
|
As of December 31, 2019, we had two leases with the same tenant occupying space at properties located in Phoenix. The annualized rental revenue for the lease that commenced on October 24, 1996, and is scheduled to expire in 2022, was $131,000, which represents approximately 0.1% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on April 16, 1999, and is scheduled to expire in 2023, was $434,000, which represents approximately 0.5% of our total annualized base rental revenue.
|
|
|
|
|
|
|
|
|
Annualized Base Rent
|
||||||||
|
|
|
|
GLA
|
|
as of December 31, 2019
|
||||||||||
Year
|
|
Number of
Leases |
|
Approximate
Square Feet |
|
Percent of
Total |
|
Amount
(in thousands) |
|
Percent of
Total |
||||||
2020
|
|
408
|
|
|
779,390
|
|
|
15.7
|
%
|
|
$
|
14,195
|
|
|
16.2
|
%
|
2021
|
|
222
|
|
|
607,382
|
|
|
12.3
|
%
|
|
11,402
|
|
|
13.0
|
%
|
|
2022
|
|
203
|
|
|
678,521
|
|
|
13.7
|
%
|
|
12,816
|
|
|
14.6
|
%
|
|
2023
|
|
164
|
|
|
497,112
|
|
|
10.0
|
%
|
|
10,352
|
|
|
11.8
|
%
|
|
2024
|
|
182
|
|
|
676,861
|
|
|
13.7
|
%
|
|
14,018
|
|
|
16.0
|
%
|
|
2025
|
|
83
|
|
|
380,917
|
|
|
7.7
|
%
|
|
6,354
|
|
|
7.3
|
%
|
|
2026
|
|
31
|
|
|
203,577
|
|
|
4.1
|
%
|
|
4,228
|
|
|
4.8
|
%
|
|
2027
|
|
30
|
|
|
177,173
|
|
|
3.6
|
%
|
|
3,588
|
|
|
4.1
|
%
|
|
2028
|
|
21
|
|
|
107,029
|
|
|
2.2
|
%
|
|
2,444
|
|
|
2.8
|
%
|
|
2029
|
|
25
|
|
|
177,331
|
|
|
3.6
|
%
|
|
3,360
|
|
|
3.8
|
%
|
|
Total
|
|
1,369
|
|
|
4,285,293
|
|
|
86.6
|
%
|
|
$
|
82,757
|
|
|
94.4
|
%
|
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
|
|||
October 1, 2019 through October 31, 2019
|
|
—
|
|
|
$
|
—
|
|
|
N/A
|
|
N/A
|
November 1, 2019 through November 30, 2019
|
|
—
|
|
|
—
|
|
|
N/A
|
|
N/A
|
|
December 1, 2019 through December 31, 2019
|
|
—
|
|
|
—
|
|
|
N/A
|
|
N/A
|
|
Total
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
(in thousands, except per share and per square foot data)
|
||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Operating Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
119,251
|
|
|
$
|
119,863
|
|
|
$
|
125,959
|
|
|
$
|
104,437
|
|
|
$
|
93,416
|
|
Operating expenses
|
|
85,305
|
|
|
86,391
|
|
|
93,299
|
|
|
80,471
|
|
|
71,408
|
|
|||||
Interest expense
|
|
26,285
|
|
|
25,177
|
|
|
23,651
|
|
|
19,239
|
|
|
14,910
|
|
|||||
Gain on sale of property
|
|
(853
|
)
|
|
(4,629
|
)
|
|
(16
|
)
|
|
(3,357
|
)
|
|
—
|
|
|||||
Loss on disposal of assets
|
|
215
|
|
|
82
|
|
|
183
|
|
|
96
|
|
|
185
|
|
|||||
Interest, dividend and other investment income
|
|
(659
|
)
|
|
(1,055
|
)
|
|
(410
|
)
|
|
(429
|
)
|
|
(313
|
)
|
|||||
Income from operations before equity investments in real estate partnerships and income tax
|
|
8,958
|
|
|
13,897
|
|
|
9,252
|
|
|
8,417
|
|
|
7,226
|
|
|||||
Equity in earnings of real estate partnership
|
|
15,076
|
|
|
8,431
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Provision for income tax
|
|
(400
|
)
|
|
(347
|
)
|
|
(386
|
)
|
|
(289
|
)
|
|
(372
|
)
|
|||||
Profit sharing expense
|
|
—
|
|
|
—
|
|
|
(278
|
)
|
|
(15
|
)
|
|
—
|
|
|||||
Income from continuing operations
|
|
23,634
|
|
|
21,981
|
|
|
8,588
|
|
|
8,113
|
|
|
6,854
|
|
|||||
Income from discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|||||
Gain on sale of properties from discontinued operations
|
|
594
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income
|
|
24,228
|
|
|
21,981
|
|
|
8,588
|
|
|
8,113
|
|
|
6,865
|
|
|||||
Less: net income attributable to noncontrolling interests
|
|
545
|
|
|
550
|
|
|
254
|
|
|
182
|
|
|
116
|
|
|||||
Net income attributable to Whitestone REIT
|
|
$
|
23,683
|
|
|
$
|
21,431
|
|
|
$
|
8,334
|
|
|
$
|
7,931
|
|
|
$
|
6,749
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
(in thousands, except per share data and per square foot and occupancy)
|
||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Earnings per share - basic
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations attributable to Whitestone REIT, excluding amounts attributable to unvested restricted shares
|
|
$
|
0.57
|
|
|
$
|
0.54
|
|
|
$
|
0.22
|
|
|
$
|
0.26
|
|
|
$
|
0.25
|
|
Income from discontinued operations attributable to Whitestone REIT
|
|
0.02
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares
|
|
$
|
0.59
|
|
|
$
|
0.54
|
|
|
$
|
0.22
|
|
|
$
|
0.26
|
|
|
$
|
0.25
|
|
Earnings per share - diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income from continuing operations attributable to Whitestone REIT, excluding amounts attributable to unvested restricted shares
|
|
$
|
0.56
|
|
|
$
|
0.52
|
|
|
$
|
0.22
|
|
|
$
|
0.26
|
|
|
$
|
0.24
|
|
Income from discontinued operations attributable to Whitestone REIT
|
|
0.01
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares
|
|
$
|
0.57
|
|
|
$
|
0.52
|
|
|
$
|
0.22
|
|
|
$
|
0.26
|
|
|
$
|
0.24
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate (net)
|
|
$
|
962,022
|
|
|
$
|
938,938
|
|
|
$
|
1,018,420
|
|
|
$
|
813,052
|
|
|
$
|
745,958
|
|
Other assets
|
|
94,238
|
|
|
89,934
|
|
|
51,748
|
|
|
38,327
|
|
|
36,127
|
|
|||||
Total assets
|
|
$
|
1,056,260
|
|
|
$
|
1,028,872
|
|
|
$
|
1,070,168
|
|
|
$
|
851,379
|
|
|
$
|
782,085
|
|
Liabilities
|
|
$
|
703,162
|
|
|
$
|
669,722
|
|
|
$
|
711,764
|
|
|
$
|
583,751
|
|
|
$
|
535,094
|
|
Whitestone REIT shareholders’ equity
|
|
345,317
|
|
|
350,456
|
|
|
347,604
|
|
|
255,687
|
|
|
242,974
|
|
|||||
Noncontrolling interest in subsidiary
|
|
7,781
|
|
|
8,694
|
|
|
10,800
|
|
|
11,941
|
|
|
4,017
|
|
|||||
|
|
$
|
1,056,260
|
|
|
$
|
1,028,872
|
|
|
$
|
1,070,168
|
|
|
$
|
851,379
|
|
|
$
|
782,085
|
|
Other Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of common shares
|
|
$
|
21,244
|
|
|
$
|
—
|
|
|
$
|
118,412
|
|
|
$
|
30,014
|
|
|
$
|
49,649
|
|
Acquisitions of and additions to real estate (1)
|
|
$
|
48,047
|
|
|
$
|
11,638
|
|
|
$
|
231,120
|
|
|
$
|
91,785
|
|
|
$
|
163,050
|
|
Distributions per share (2)
|
|
$
|
1.13
|
|
|
$
|
1.14
|
|
|
$
|
1.13
|
|
|
$
|
1.13
|
|
|
$
|
1.13
|
|
Funds from operations (3)
|
|
$
|
38,026
|
|
|
$
|
39,398
|
|
|
$
|
35,039
|
|
|
$
|
27,031
|
|
|
$
|
26,696
|
|
Total occupancy at year end
|
|
90
|
%
|
|
90
|
%
|
|
88
|
%
|
|
87
|
%
|
|
87
|
%
|
|||||
Average aggregate GLA
|
|
4,859
|
|
|
4,925
|
|
|
6,403
|
|
|
5,837
|
|
|
5,734
|
|
|||||
Average rent per square foot
|
|
$
|
19.58
|
|
|
$
|
18.81
|
|
|
$
|
16.81
|
|
|
$
|
15.45
|
|
|
$
|
14.62
|
|
(1) Including amounts for discontinued operations.
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
(2) The distributions per share represent total cash payments divided by weighted average common shares.
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
(3) We believe that Funds From Operations (“FFO”) is an appropriate supplemental measure of operating performance because it helps our investors compare our operating performance relative to other REITs. The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as net income (loss) available to common shareholders computed in accordance with GAAP, excluding gains or losses from sales of operating properties and extraordinary items, plus depreciation and amortization of real estate assets, including our share of equity method investments and joint ventures. We calculate FFO in a manner consistent with the NAREIT definition. For more information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Reconciliation of Non-GAAP Financial Measures.”
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
(in thousands)
|
||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Net income attributable to Whitestone REIT
|
|
$
|
23,683
|
|
|
$
|
21,431
|
|
|
$
|
8,334
|
|
|
$
|
7,931
|
|
|
$
|
6,749
|
|
Adjustments to reconcile to FFO:(1)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization of real estate assets (2)
|
|
26,468
|
|
|
25,401
|
|
|
26,290
|
|
|
22,179
|
|
|
19,646
|
|
|||||
Depreciation and amortization of real estate assets of real estate partnership (pro rata)(3)
|
|
2,362
|
|
|
2,903
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Loss (gain) on sale or disposal of assets (2)
|
|
(638
|
)
|
|
(4,547
|
)
|
|
167
|
|
|
(3,261
|
)
|
|
185
|
|
|||||
Gain on sale of assets and properties of discontinued operations, net
|
|
(594
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Gain on sale or disposal of properties or assets of real estate partnership (pro rata)(3)
|
|
(13,800
|
)
|
|
(6,340
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income attributable to redeemable operating partnership units (2)
|
|
545
|
|
|
550
|
|
|
254
|
|
|
182
|
|
|
116
|
|
|||||
FFO
|
|
$
|
38,026
|
|
|
$
|
39,398
|
|
|
$
|
35,045
|
|
|
$
|
27,031
|
|
|
$
|
26,696
|
|
•
|
53 properties that meet our Community Centered Properties® strategy containing approximately 5.0 million square feet of GLA and having a total carrying amount (net of accumulated depreciation) of $943.6 million; and
|
•
|
five parcels of land held for future development that meet our Community Centered Properties® strategy having a total carrying amount of $18.4 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 (Decrease) Over Prior Rent
|
||||||||||
Comparable (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Renewal Leases
|
|
202
|
|
|
707,320
|
|
|
4.0
|
|
|
$
|
1.60
|
|
|
$
|
17.66
|
|
|
$
|
17.34
|
|
|
10.2
|
%
|
New Leases
|
|
46
|
|
|
79,177
|
|
|
5.0
|
|
|
9.22
|
|
|
22.20
|
|
|
21.86
|
|
|
9.6
|
%
|
|||
Total/Average
|
|
248
|
|
|
786,497
|
|
|
4.1
|
|
|
$
|
2.37
|
|
|
$
|
18.12
|
|
|
$
|
17.80
|
|
|
10.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Number of Leases Signed
|
|
GLA Signed
|
|
Weighted Average Lease Term (2)
|
|
TI and Incentives per Sq. Ft. (3)
|
|
Contractual Rent Per Sq. Ft (4)
|
|
|
|
|
||||||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Renewal Leases
|
|
208
|
|
|
726,246
|
|
|
4.0
|
|
|
$
|
1.73
|
|
|
$
|
17.62
|
|
|
|
|
|
|||
New Leases
|
|
109
|
|
|
226,534
|
|
|
5.1
|
|
|
14.28
|
|
|
20.95
|
|
|
|
|
|
|||||
Total/Average
|
|
317
|
|
|
952,780
|
|
|
4.3
|
|
|
$
|
4.71
|
|
|
$
|
18.41
|
|
|
|
|
|
(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 (in years) 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, development 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.
|
|
2019
|
|
2018
|
||||
Capital expenditures:
|
|
|
|
||||
Tenant improvements and allowances
|
$
|
4,989
|
|
|
$
|
4,622
|
|
Developments / redevelopments
|
4,041
|
|
|
4,142
|
|
||
Leasing commissions and costs
|
2,568
|
|
|
2,113
|
|
||
Maintenance capital expenditures
|
4,213
|
|
|
2,874
|
|
||
Total capital expenditures
|
$
|
15,811
|
|
|
$
|
13,751
|
|
•
|
Apply Topic 842 to each lease that existed at the beginning of the earliest comparative period presented in the financial statements as well as leases that commenced after that date. Under this method, prior comparative periods presented are adjusted. For leases that commenced prior to the beginning of the earliest comparative period presented, a cumulative-effect adjustment is recognized at that date.
|
•
|
Apply the guidance to each lease that had commenced as of the beginning of the reporting period in which the entity first applies the leases standard with a cumulative-effect adjustment as of that date. Prior comparative periods would not be adjusted under this method.
|
•
|
Cash flow from operations of $47,748,000 for the year ended December 31, 2019;
|
•
|
Proceeds of $100,000,000 from issuance of bonds pursuant to the Note Agreement (as defined below);
|
•
|
Proceeds from issuance of common shares, net of offering costs of $21,124,000;
|
•
|
Net cash provided from investing activities of discontinued operations of $594,000;
|
•
|
Net proceeds from financed receivable due from related party of $5,661,000;
|
•
|
Payment of dividends and distributions to common shareholders and OP unit holders of $46,682,000;
|
•
|
Acquisitions of real estate of $34,804,000;
|
•
|
Additions to real estate of $13,243,000;
|
•
|
Payments of loan origination costs of $2,970,000;
|
•
|
Net payments of $66,700,000 to the 2019 Facility;
|
•
|
Payments of notes payable of $8,095,000; and
|
•
|
Repurchase of common shares of $776,000.
|
|
|
December 31,
|
||||||
Description
|
|
2019
|
|
2018
|
||||
Fixed rate notes
|
|
|
|
|
||||
$10.5 million, 4.85% Note, due September 24, 2020 (1)
|
|
$
|
9,260
|
|
|
$
|
9,500
|
|
$50.0 million, 1.75% plus 1.35% to 1.90% Note, due October 30, 2020 (2)
|
|
—
|
|
|
50,000
|
|
||
$50.0 million, 1.50% plus 1.35% to 1.90% Note, due January 29, 2021 (3)
|
|
—
|
|
|
50,000
|
|
||
$100.0 million, 1.73% plus 1.35% to 1.90% Note, due October 30, 2022 (4)
|
|
100,000
|
|
|
100,000
|
|
||
$165.0 million, 2.24% plus 1.35% to 1.90% Note, due January 31, 2024 (5)
|
|
165,000
|
|
|
—
|
|
||
$80.0 million, 3.72% Note, due June 1, 2027
|
|
80,000
|
|
|
80,000
|
|
||
$6.5 million 3.80% Note, due January 1, 2019
|
|
—
|
|
|
5,657
|
|
||
$19.0 million 4.15% Note, due December 1, 2024
|
|
19,000
|
|
|
19,000
|
|
||
$20.2 million 4.28% Note, due June 6, 2023
|
|
18,616
|
|
|
18,996
|
|
||
$14.0 million 4.34% Note, due September 11, 2024
|
|
13,482
|
|
|
13,718
|
|
||
$14.3 million 4.34% Note, due September 11, 2024
|
|
14,243
|
|
|
14,300
|
|
||
$15.1 million 4.99% Note, due January 6, 2024
|
|
14,409
|
|
|
14,643
|
|
||
$2.6 million 5.46% Note, due October 1, 2023
|
|
2,386
|
|
|
2,430
|
|
||
$50.0 million, 5.09% Note, due March 22, 2029
|
|
50,000
|
|
|
—
|
|
||
$50.0 million, 5.17% Note, due March 22, 2029
|
|
50,000
|
|
|
—
|
|
||
Floating rate notes
|
|
|
|
|
||||
Unsecured line of credit, LIBOR plus 1.40% to 1.90%, due January 31, 2023 (6)
|
|
109,500
|
|
|
241,200
|
|
||
Total notes payable principal
|
|
645,896
|
|
|
619,444
|
|
||
Less deferred financing costs, net of accumulated amortization
|
|
(1,197
|
)
|
|
(1,239
|
)
|
||
|
|
$
|
644,699
|
|
|
$
|
618,205
|
|
(1)
|
Promissory note includes an interest rate swap that fixed the interest rate at 3.55% for the duration of the term through September 24, 2018 and 4.85% beginning September 25, 2018 through September 24, 2020.
|
(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 4, 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 note includes an interest rate swap that fixed the LIBOR portion of the interest rate at an average rate of 2.24% for the duration of the term through January 31, 2024.
|
(6)
|
Unsecured line of credit includes certain Pillarstone Properties as of December 31, 2018, in determining the amount of credit available under the 2018 Facility which were released from collateral during 2019.
|
•
|
maximum total indebtedness to total asset value ratio of 0.60 to 1.00;
|
•
|
maximum secured debt to total asset value ratio of 0.40 to 1.00;
|
•
|
minimum EBITDA (earnings before interest, taxes, depreciation, amortization or extraordinary items) to fixed charges ratio of 1.50 to 1.00;
|
•
|
maximum other recourse debt to total asset value ratio of 0.15 to 1.00; and
|
•
|
maintenance of a minimum tangible net worth (adjusted for accumulated depreciation and amortization) of $372 million plus 75% of the net proceeds from additional equity offerings (as defined therein).
|
•
|
$250.0 million unsecured revolving credit facility with a maturity date of January 1, 2023 (the “2019 Revolver”);
|
•
|
$165.0 million unsecured term loan with a maturity date of January 31, 2024 (“Term Loan A”); and
|
•
|
$100.0 million unsecured term loan with a maturity date of October 30, 2022 (“Term Loan B” and together with Term Loan A, the “2019 Term Loans”).
|
•
|
maximum total indebtedness to total asset value ratio of 0.60 to 1.00;
|
•
|
maximum secured debt to total asset value ratio of 0.40 to 1.00;
|
•
|
minimum EBITDA (earnings before interest, taxes, depreciation, amortization or extraordinary items) to fixed charges ratio of 1.50 to 1.00;
|
•
|
maximum other recourse debt to total asset value ratio of 0.15 to 1.00; and
|
•
|
maintenance of a minimum tangible net worth (adjusted for accumulated depreciation and amortization) of $372 million plus 75% of the net proceeds from additional equity offerings (as defined therein).
|
•
|
extended the maturity date of the $300 million unsecured revolving credit facility under the 2014 Facility (the “2018 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 “2018 Term Loans”) to January 29, 2021 from November 7, 2019.
|
|
|
Amount Due
|
||
Year
|
|
(in thousands)
|
||
|
|
|
||
2020
|
|
$
|
10,951
|
|
2021
|
|
1,611
|
|
|
2022
|
|
101,683
|
|
|
2023
|
|
137,363
|
|
|
2024
|
|
228,573
|
|
|
Thereafter
|
|
165,715
|
|
|
Total
|
|
$
|
645,896
|
|
|
|
|
|
Payment due by period (in thousands)
|
||||||||||||||||
Consolidated Contractual Obligations
|
|
Total
|
|
Less than 1
year (2020) |
|
1 - 3 years
(2021 - 2022) |
|
3 - 5 years
(2023 - 2024) |
|
More than
5 years (after 2024) |
||||||||||
Long-Term Debt - Principal
|
|
$
|
645,896
|
|
|
$
|
10,951
|
|
|
$
|
103,294
|
|
|
$
|
365,936
|
|
|
$
|
165,715
|
|
Long-Term Debt - Fixed Interest
|
|
107,674
|
|
|
21,742
|
|
|
41,975
|
|
|
26,746
|
|
|
17,211
|
|
|||||
Long-Term Debt - Variable Interest (1)
|
|
13,633
|
|
|
4,544
|
|
|
9,089
|
|
|
—
|
|
|
—
|
|
|||||
Unsecured Credit Facility - Unused commitment fee (2)
|
|
1,077
|
|
|
351
|
|
|
702
|
|
|
24
|
|
|
—
|
|
|||||
Operating Lease Obligations
|
|
212
|
|
|
126
|
|
|
82
|
|
|
4
|
|
|
—
|
|
|||||
Related Party Rent Lease Obligations
|
|
1,170
|
|
|
790
|
|
|
380
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
769,662
|
|
|
$
|
38,504
|
|
|
$
|
155,522
|
|
|
$
|
392,710
|
|
|
$
|
182,926
|
|
(1)
|
As of December 31, 2019, we had one loan totaling $109.5 million which bore interest at a floating rate. The variable interest rate payments are based on LIBOR plus 1.40% to LIBOR plus 1.90%, which reflects our new interest rates under our 2019 Facility. The information in the table above reflects our projected interest rate obligations for the floating rate payments based on one-month LIBOR as of December 31, 2019, of 1.76%.
|
(2)
|
The unused commitment fees on our unsecured credit facility, payable quarterly, are based on the average daily unused amount of our unsecured credit facility. The fees are 0.20% for facility usage greater than 50% or 0.25% for facility usage less than 50%. The information in the table above reflects our projected obligations for our unsecured credit facility based on our December 31, 2019 balance of $374.5 million.
|
•
|
our funds from operations;
|
•
|
our debt service requirements;
|
•
|
our capital expenditure requirements for our properties;
|
•
|
our taxable income, combined with the annual distribution requirements necessary to maintain REIT qualification;
|
•
|
requirements of Maryland law;
|
•
|
our overall financial condition; and
|
•
|
other factors deemed relevant by our board of trustees.
|
|
|
Common Shares
|
|
Noncontrolling OP Unit Holders
|
|
Total
|
||||||||||||||
Quarter Paid
|
|
Distributions Per Common Share
|
|
Total Amount Paid
|
|
Distributions Per OP Unit
|
|
Total Amount Paid
|
|
Total Amount Paid
|
||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fourth Quarter
|
|
$
|
0.2850
|
|
|
$
|
11,580
|
|
|
$
|
0.2850
|
|
|
$
|
262
|
|
|
$
|
11,842
|
|
Third Quarter
|
|
0.2850
|
|
|
11,430
|
|
|
0.2850
|
|
|
264
|
|
|
11,694
|
|
|||||
Second Quarter
|
|
0.2850
|
|
|
11,316
|
|
|
0.2850
|
|
|
265
|
|
|
11,581
|
|
|||||
First Quarter
|
|
0.2850
|
|
|
11,301
|
|
|
0.2850
|
|
|
264
|
|
|
11,565
|
|
|||||
Total
|
|
$
|
1.1400
|
|
|
$
|
45,627
|
|
|
$
|
1.1400
|
|
|
$
|
1,055
|
|
|
$
|
46,682
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fourth Quarter
|
|
$
|
0.2850
|
|
|
$
|
11,302
|
|
|
$
|
0.2850
|
|
|
$
|
265
|
|
|
$
|
11,567
|
|
Third Quarter
|
|
0.2850
|
|
|
11,294
|
|
|
0.2850
|
|
|
286
|
|
|
11,580
|
|
|||||
Second Quarter
|
|
0.2850
|
|
|
11,203
|
|
|
0.2850
|
|
|
295
|
|
|
11,498
|
|
|||||
First Quarter
|
|
0.2850
|
|
|
11,145
|
|
|
0.2850
|
|
|
309
|
|
|
11,454
|
|
|||||
Total
|
|
$
|
1.1400
|
|
|
$
|
44,944
|
|
|
$
|
1.1400
|
|
|
$
|
1,155
|
|
|
$
|
46,099
|
|
|
|
Year ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Number of properties owned and operated
|
|
58
|
|
|
57
|
|
||
Aggregate GLA (sq. ft.)(1)
|
|
4,848,652
|
|
|
4,841,660
|
|
||
Ending occupancy rate - operating portfolio(1)
|
|
90
|
%
|
|
90
|
%
|
||
Ending occupancy rate
|
|
90
|
%
|
|
90
|
%
|
||
|
|
|
|
|
||||
Total revenues
|
|
$
|
119,251
|
|
|
$
|
119,863
|
|
Total operating expenses
|
|
85,305
|
|
|
86,391
|
|
||
Total other expense
|
|
24,988
|
|
|
19,575
|
|
||
Income from operations before equity investments in real estate partnerships and income tax
|
|
8,958
|
|
|
13,897
|
|
||
Equity in earnings of real estate partnership
|
|
15,076
|
|
|
8,431
|
|
||
Provision for income taxes
|
|
(400
|
)
|
|
(347
|
)
|
||
Income from continuing operations
|
|
23,634
|
|
|
21,981
|
|
||
Income from discontinued operations
|
|
594
|
|
|
—
|
|
||
Net income
|
|
24,228
|
|
|
21,981
|
|
||
Less: Net income attributable to noncontrolling interests
|
|
545
|
|
|
550
|
|
||
Net income attributable to Whitestone REIT
|
|
$
|
23,683
|
|
|
$
|
21,431
|
|
|
|
|
|
|
||||
Funds from operations(2)
|
|
$
|
38,026
|
|
|
$
|
39,398
|
|
Funds from operations core(3)
|
|
44,935
|
|
|
48,778
|
|
||
Property net operating income(4)
|
|
88,578
|
|
|
89,949
|
|
||
Distributions paid on common shares and OP units
|
|
46,682
|
|
|
46,099
|
|
||
Distributions per common share and OP unit
|
|
$
|
1.1400
|
|
|
$
|
1.1400
|
|
(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 an explanation and reconciliation of funds from operations and funds from operations core to net income, see “Funds From Operations” below.
|
(3)
|
For a reconciliation of funds from operations core to net income, see “FFO Core” below.
|
(4)
|
For an explanation and reconciliation of property net operating income to net income, see “Property Net Operating Income” below.
|
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
Revenue
|
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Same Store
|
|
|
|
|
|
|
|
|
|||||||
Rental revenues (1)
|
|
$
|
86,555
|
|
|
$
|
86,046
|
|
|
$
|
509
|
|
|
1
|
%
|
Recoveries(2)
|
|
31,670
|
|
|
30,588
|
|
|
1,082
|
|
|
4
|
%
|
|||
Bad debt(3)
|
|
(1,461
|
)
|
|
—
|
|
|
(1,461
|
)
|
|
Not meaningful
|
|
|||
Total rental
|
|
116,764
|
|
|
116,634
|
|
|
130
|
|
|
0
|
%
|
|||
Other revenues (4)
|
|
1,286
|
|
|
1,387
|
|
|
(101
|
)
|
|
(7
|
)%
|
|||
Same Store Total
|
|
118,050
|
|
|
118,021
|
|
|
29
|
|
|
0
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Non-Same Store and Management Fees
|
|
|
|
|
|
|
|
|
|||||||
Rental revenues
|
|
196
|
|
|
598
|
|
|
(402
|
)
|
|
(67
|
)%
|
|||
Recoveries
|
|
77
|
|
|
232
|
|
|
(155
|
)
|
|
(67
|
)%
|
|||
Bad debt
|
|
(23
|
)
|
|
—
|
|
|
(23
|
)
|
|
Not meaningful
|
|
|||
Total rental (5)
|
|
250
|
|
|
830
|
|
|
(580
|
)
|
|
(70
|
)%
|
|||
Other revenues
|
|
96
|
|
|
4
|
|
|
92
|
|
|
Not meaningful
|
|
|||
Management fees (6)
|
|
855
|
|
|
1,008
|
|
|
(153
|
)
|
|
(15
|
)%
|
|||
Non-Same Store and Management Fees Total
|
|
1,201
|
|
|
1,842
|
|
|
(641
|
)
|
|
(35
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Total revenue
|
|
$
|
119,251
|
|
|
$
|
119,863
|
|
|
$
|
(612
|
)
|
|
(1
|
)%
|
(1)
|
The Same Store tenant rent increase of $509,000 resulted from a decrease of $324,000 from the decrease in the average leased square feet to 4,382,812 from 4,399,134, offset by increase of $833,000 from the average rent per leased square foot increasing from $19.56 to $19.75.
|
(2)
|
The Same Store recoveries revenue increase of $1,082,000 is primarily attributable to increases in Same Store real estate taxes and property maintenance costs.
|
(3)
|
Same Store bad debt of $1,461,000 is included as a reduction of revenue for the year ended December 31, 2019. Prior to our adoption of Topic 842 in 2019, we recognized bad debt in total operating expenses. For the year ended December 31, 2018, the Same Store bad debt expense recognized in total operating expenses was $1,466,000. No bad debt expense is recognized in total operating expenses for 2019.
|
(4)
|
The decrease in Same Store other revenues is primarily comprised of decreased lease termination fees.
|
(5)
|
Non-Same Store total rental revenue for the year ended December 31, 2019 was primarily generated from our acquisition of the Las Colinas Village property on December 6, 2019. Non-Same Store total rental revenue for the year ended December 31, 2018 was generated from the Torrey Square and Bellnott Square properties prior to their sales during 2018. Please refer to Note 4 (Real Estate) to the accompanying consolidated financial statements for more information regarding the property acquisitions and property sales.
|
(6)
|
On December 27, 2018, Pillarstone OP, through an indirect wholly owned subsidiary, Whitestone Industrial-Office, LLC, sold a portfolio of three properties. The decrease in management fees is primarily due to less properties under management.
|
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
Operating Expenses
|
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Same Store
|
|
|
|
|
|
|
|
|
|||||||
Operating and maintenance, excluding bad debt
|
|
$
|
19,655
|
|
|
$
|
18,672
|
|
|
$
|
983
|
|
|
5
|
%
|
Bad debt (1)
|
|
—
|
|
|
1,466
|
|
|
(1,466
|
)
|
|
(100
|
)%
|
|||
Real estate taxes
|
|
16,245
|
|
|
16,146
|
|
|
99
|
|
|
1
|
%
|
|||
Same Store total
|
|
35,900
|
|
|
36,284
|
|
|
(384
|
)
|
|
(1
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Non-Same Store and affiliated company rents
|
|
|
|
|
|
|
|
|
|||||||
Operating and maintenance
|
|
143
|
|
|
131
|
|
|
12
|
|
|
9
|
%
|
|||
Real estate taxes (2)
|
|
48
|
|
|
216
|
|
|
(168
|
)
|
|
(78
|
)%
|
|||
Affiliated company rents (3)
|
|
813
|
|
|
800
|
|
|
13
|
|
|
2
|
%
|
|||
Non-Same Store and affiliated company rents total
|
|
1,004
|
|
|
1,147
|
|
|
(143
|
)
|
|
(12
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Depreciation and amortization
|
|
26,740
|
|
|
25,679
|
|
|
1,061
|
|
|
4
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
General and administrative (4)
|
|
21,661
|
|
|
23,281
|
|
|
(1,620
|
)
|
|
(7
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Total operating expenses
|
|
$
|
85,305
|
|
|
$
|
86,391
|
|
|
$
|
(1,086
|
)
|
|
(1
|
)%
|
(1)
|
Prior to our adoption of Topic 842 in 2019, we recorded an allowance for bad debt as a component of operating and maintenance expense. Subsequent to the adoption of Topic 842, we included the impact of tenant allowances as a reduction of revenue. Bad debt expense was $1,466,000 for the year ended December 31, 2018, and for the year ended December 31, 2019, we recorded a $1,461,000 reduction to Same Store revenue for tenant rent allowances.
|
(2)
|
Non-Same Store real estate tax expense for the year ended December 31, 2019 resulted from our acquisition of our Las Colinas Village property on December 6, 2019. Non-Same Store real estate tax expense for the year ended December 31, 2018 was incurred from the Torrey Square and Bellnott Square properties prior to their sales during 2018. Please refer to Note 4 (Real Estate) to the accompanying consolidated financial statements for more information regarding the property acquisitions and property sales.
|
(3)
|
Affiliated company rents are spaces that we lease from Pillarstone OP.
|
(4)
|
The general and administrative expense decrease was attributable to a $2,534,000 reduction in professional fees and other expenses incurred in connection with our 2018 Annual Meeting of Shareholders and a $275,000 decrease in share-based compensation expense, offset by increases of $812,000 in legal fees, $171,000 of salaries and benefits, net of allocated costs, and $206,000 in other general and administrative expenses. Please refer to Note 17 (Commitments and Contingencies) and Note 15 (Incentive Share Plan) to the accompanying consolidated financial statements for more information regarding legal fees and share-based compensation expense.
|
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
Other Expenses (Income)
|
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Interest expense (1)
|
|
$
|
26,285
|
|
|
$
|
25,177
|
|
|
$
|
1,108
|
|
|
4
|
%
|
Gain on sale of properties (2)
|
|
(853
|
)
|
|
(4,629
|
)
|
|
3,776
|
|
|
(82
|
)%
|
|||
Loss on sale or disposal of assets
|
|
215
|
|
|
82
|
|
|
133
|
|
|
162
|
%
|
|||
Interest, dividend and other investment income (3)
|
|
(659
|
)
|
|
(1,055
|
)
|
|
396
|
|
|
(38
|
)%
|
|||
Total other expense
|
|
$
|
24,988
|
|
|
$
|
19,575
|
|
|
$
|
5,413
|
|
|
28
|
%
|
(1)
|
The $1,108,000 increase in interest expense is attributable to an increase in our effective interest rate to 4.02% for the year ended December 31, 2019 as compared to 3.89% for the year ended December 31, 2018, resulting in a $844,000 increase in interest expense, and an increase in our average outstanding notes payable balance of $6,733,000 that resulted in $262,000 in increased interest expense. Amortization of loan fees increased interest expense by $2,000 for the year ended December 31, 2019 as compared to the year ended December 31, 2018.
|
(2)
|
During the year ended December 31, 2019, we received an $0.8 million principal payment in connection with the sale of two retail buildings we completed on November 29, 2016. In 2016, we provided seller-financing for the retail buildings, Webster Pointe and Centre South, and deferred a $1.7 million gain until principal payments on the seller-financed loan are received. The purchaser of the retail buildings sold the Webster Pointe property on November 15, 2019 and paid the entire principal balance of the loan related to Webster Pointe. As of December 31, 2019, we had a total of $2.7 million in deferred gains for seller-financed loans to be recognized upon receipt of principal payments. The $2.7 million in deferred gains includes amounts from the sale for Centre South discussed above and amounts from the sales of Royal Crest and Featherwood discussed below.
|
(3)
|
The $396,000 decrease in interest, dividend and other investment income was primarily comprised of a $411,000 decrease in interest income from our financed receivable from Pillarstone OP. As of December 31, 2019, the balance of the financed receivable from Pillarstone OP was paid off, and we do not expect to receive any interest income from financed receivables with Pillarstone OP in 2020.
|
|
|
Year Ended
December 31,
|
|
Increase
|
|
% Increase
|
|||||||||
|
|
2019
|
|
2018
|
|
(Decrease)
|
|
(Decrease)
|
|||||||
Same Store (51 properties, excluding development land)
|
|
|
|
|
|
|
|
|
|||||||
Property revenues
|
|
|
|
|
|
|
|
|
|||||||
Rental
|
|
$
|
116,764
|
|
|
$
|
116,634
|
|
|
$
|
130
|
|
|
—
|
%
|
Management, transaction and other fees
|
|
1,286
|
|
|
1,387
|
|
|
(101
|
)
|
|
(7
|
)%
|
|||
Total property revenues
|
|
118,050
|
|
|
118,021
|
|
|
29
|
|
|
—
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Property expenses
|
|
|
|
|
|
|
|
|
|||||||
Property operation and maintenance
|
|
19,655
|
|
|
20,138
|
|
|
(483
|
)
|
|
(2
|
)%
|
|||
Real estate taxes
|
|
16,245
|
|
|
16,146
|
|
|
99
|
|
|
1
|
%
|
|||
Total property expenses
|
|
35,900
|
|
|
36,284
|
|
|
(384
|
)
|
|
(1
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Total property revenues less total property expenses
|
|
82,150
|
|
|
81,737
|
|
|
413
|
|
|
1
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Same Store straight line rent adjustments
|
|
(1,110
|
)
|
|
(2,125
|
)
|
|
1,015
|
|
|
(48
|
)%
|
|||
Same Store amortization of above/below market rents
|
|
(761
|
)
|
|
(1,018
|
)
|
|
257
|
|
|
(25
|
)%
|
|||
Same Store lease termination fees
|
|
(576
|
)
|
|
(729
|
)
|
|
153
|
|
|
(21
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Same Store NOI(1)
|
|
$
|
79,703
|
|
|
$
|
77,865
|
|
|
$
|
1,838
|
|
|
2
|
%
|
(1)
|
See below for a reconciliation of property net operating income to net income.
|
|
|
Year Ended December 31,
|
||||||
PROPERTY NET OPERATING INCOME (“NOI”)
|
|
2019
|
|
2018
|
||||
Net income attributable to Whitestone REIT
|
|
$
|
23,683
|
|
|
$
|
21,431
|
|
General and administrative expenses
|
|
21,661
|
|
|
23,281
|
|
||
Depreciation and amortization
|
|
26,740
|
|
|
25,679
|
|
||
Equity in earnings of real estate partnership
|
|
(15,076
|
)
|
|
(8,431
|
)
|
||
Interest expense
|
|
26,285
|
|
|
25,177
|
|
||
Interest, dividend and other investment income
|
|
(659
|
)
|
|
(1,055
|
)
|
||
Provision for income taxes
|
|
400
|
|
|
347
|
|
||
Gain on sale of assets and properties of continuing operations, net
|
|
(853
|
)
|
|
(4,629
|
)
|
||
Gain on sale of assets and properties of discontinued operations, net
|
|
(594
|
)
|
|
—
|
|
||
Management fee, net of related expenses
|
|
(42
|
)
|
|
(208
|
)
|
||
Loss on disposal of assets and properties of continuing operations, net
|
|
215
|
|
|
82
|
|
||
NOI of real estate partnership (pro rata)
|
|
6,273
|
|
|
7,725
|
|
||
Net income attributable to noncontrolling interests
|
|
545
|
|
|
550
|
|
||
NOI
|
|
$
|
88,578
|
|
|
$
|
89,949
|
|
Non-Same Store NOI (1)
|
|
(155
|
)
|
|
(487
|
)
|
||
NOI of real estate partnership (pro rata)
|
|
(6,273
|
)
|
|
(7,725
|
)
|
||
NOI less Non-Same Store NOI and NOI of real estate partnership (pro rata)
|
|
82,150
|
|
|
81,737
|
|
||
Same Store straight line rent adjustments
|
|
(1,110
|
)
|
|
(2,125
|
)
|
||
Same Store amortization of above/below market rents
|
|
(761
|
)
|
|
(1,018
|
)
|
||
Same Store lease termination fees
|
|
(576
|
)
|
|
(729
|
)
|
||
Same Store NOI (2)
|
|
$
|
79,703
|
|
|
$
|
77,865
|
|
(1)
|
We define “Non-Same Stores” as properties that have been acquired since the beginning of the period being compared and properties that have been sold, but not classified as discontinued operations. For purposes of comparing the twelve months ended December 31, 2019 to the twelve months ended December 31, 2018, Non-Same Stores include properties acquired between January 1, 2018 and December 31, 2019 and properties sold between January 1, 2018 and December 31, 2019, but not included in discontinued operations.
|
(2)
|
We define “Same Stores” as properties that have been owned during the entire period being compared. For purposes of comparing the twelve months ended December 31, 2019 to the twelve months ended December 31, 2018, Same Stores include properties owned before January 1, 2018 and not sold before December 31, 2019. Straight line rent adjustments, above/below market rents, and lease termination fees are excluded.
|
|
|
Year Ended December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Number of properties owned and operated
|
|
57
|
|
|
59
|
|
||
Aggregate GLA (sq. ft.)(1)
|
|
4,841,660
|
|
|
5,023,215
|
|
||
Ending occupancy rate - operating portfolio(1)
|
|
90
|
%
|
|
91
|
%
|
||
Ending occupancy rate
|
|
90
|
%
|
|
90
|
%
|
||
|
|
|
|
|
||||
Total revenues
|
|
$
|
119,863
|
|
|
$
|
125,959
|
|
Total operating expenses
|
|
86,391
|
|
|
93,299
|
|
||
Total other expense
|
|
19,575
|
|
|
23,408
|
|
||
Income before equity investments in real estate partnerships, income tax, and profit sharing expense
|
|
13,897
|
|
|
9,252
|
|
||
Equity in earnings of real estate partnership
|
|
8,431
|
|
|
—
|
|
||
Provision for income taxes
|
|
(347
|
)
|
|
(386
|
)
|
||
Profit sharing expense
|
|
—
|
|
|
(278
|
)
|
||
Net income
|
|
21,981
|
|
|
8,588
|
|
||
Less: Net income attributable to noncontrolling interests
|
|
550
|
|
|
254
|
|
||
Net income attributable to Whitestone REIT
|
|
$
|
21,431
|
|
|
$
|
8,334
|
|
|
|
|
|
|
||||
Funds from operations(2)
|
|
$
|
39,398
|
|
|
$
|
35,045
|
|
Funds from operations core(3)
|
|
48,778
|
|
|
47,096
|
|
||
Property net operating income (4)
|
|
89,949
|
|
|
83,849
|
|
||
Distributions paid on common shares and OP units
|
|
46,099
|
|
|
41,713
|
|
||
Distributions per common share and OP unit
|
|
$
|
1.1400
|
|
|
$
|
1.1400
|
|
(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 an explanation and reconciliation of funds from operations and funds from operations core to net income, see “Funds From Operations” below.
|
(3)
|
For a reconciliation of funds from operations core to net income, see “FFO Core” below.
|
(4)
|
For an explanation and reconciliation of property net operating income to net income, see “Property Net Operating Income” below.
|
Overall Operating Maintenance and Real Estate
|
|
Year Ended December 31,
|
|
Increase
|
|
% Increase
|
|||||||||
Tax Expenses
|
|
2018
|
|
2017
|
|
(Decrease)
|
|
(Decrease)
|
|||||||
Real estate taxes
|
|
$
|
16,362
|
|
|
$
|
17,897
|
|
|
$
|
(1,535
|
)
|
|
(9
|
)%
|
Utilities
|
|
4,470
|
|
|
5,514
|
|
|
(1,044
|
)
|
|
(19
|
)%
|
|||
Contract services
|
|
7,017
|
|
|
7,186
|
|
|
(169
|
)
|
|
(2
|
)%
|
|||
Repairs and maintenance
|
|
3,900
|
|
|
5,052
|
|
|
(1,152
|
)
|
|
(23
|
)%
|
|||
Bad debt
|
|
1,391
|
|
|
2,356
|
|
|
(965
|
)
|
|
(41
|
)%
|
|||
Labor and other
|
|
4,291
|
|
|
4,105
|
|
|
186
|
|
|
5
|
%
|
|||
Total
|
|
$
|
37,431
|
|
|
$
|
42,110
|
|
|
$
|
(4,679
|
)
|
|
(11
|
)%
|
Same Store Operating Maintenance and Real
|
|
Year Ended December 31,
|
|
Increase
|
|
% Increase
|
|||||||||
Estate Tax Expenses
|
|
2018
|
|
2017
|
|
(Decrease)
|
|
(Decrease)
|
|||||||
Real estate taxes
|
|
$
|
13,253
|
|
|
$
|
13,032
|
|
|
$
|
221
|
|
|
2
|
%
|
Utilities
|
|
3,816
|
|
|
3,935
|
|
|
(119
|
)
|
|
(3
|
)%
|
|||
Contract services
|
|
5,602
|
|
|
5,278
|
|
|
324
|
|
|
6
|
%
|
|||
Repairs and maintenance
|
|
3,571
|
|
|
3,830
|
|
|
(259
|
)
|
|
(7
|
)%
|
|||
Bad debt
|
|
1,361
|
|
|
1,867
|
|
|
(506
|
)
|
|
(27
|
)%
|
|||
Labor and other
|
|
3,191
|
|
|
2,891
|
|
|
300
|
|
|
10
|
%
|
|||
Total
|
|
$
|
30,794
|
|
|
$
|
30,833
|
|
|
$
|
(39
|
)
|
|
—
|
%
|
Non-Same Store Operating Maintenance and Real
|
|
Year Ended December 31,
|
|
Increase
|
|
% Increase
|
|||||||||
Estate Tax Expenses
|
|
2018
|
|
2017
|
|
(Decrease)
|
|
(Decrease)
|
|||||||
Real estate taxes
|
|
$
|
3,109
|
|
|
$
|
2,273
|
|
|
$
|
836
|
|
|
37
|
%
|
Utilities
|
|
654
|
|
|
417
|
|
|
237
|
|
|
57
|
%
|
|||
Contract services
|
|
1,415
|
|
|
764
|
|
|
651
|
|
|
85
|
%
|
|||
Repairs and maintenance
|
|
329
|
|
|
309
|
|
|
20
|
|
|
6
|
%
|
|||
Bad debt
|
|
30
|
|
|
100
|
|
|
(70
|
)
|
|
(70
|
)%
|
|||
Labor and other
|
|
1,100
|
|
|
239
|
|
|
861
|
|
|
360
|
%
|
|||
Total
|
|
$
|
6,637
|
|
|
$
|
4,102
|
|
|
$
|
2,535
|
|
|
62
|
%
|
|
|
Year Ended December 31,
|
|
Increase
|
|
% Increase
|
||||||||||
|
|
2018
|
|
2017
|
|
(Decrease)
|
|
(Decrease)
|
||||||||
Interest expense
|
|
$
|
25,177
|
|
|
$
|
23,651
|
|
|
$
|
1,526
|
|
|
6
|
%
|
|
Gain on sale of properties
|
|
(4,629
|
)
|
|
(16
|
)
|
|
(4,613
|
)
|
|
Not Meaningful
|
|||||
Loss on sale or disposal of assets
|
|
82
|
|
|
183
|
|
|
(101
|
)
|
|
(55
|
)%
|
||||
Interest, dividend and other investment income
|
|
(1,055
|
)
|
|
(410
|
)
|
|
(645
|
)
|
|
157
|
%
|
||||
Total other expenses
|
|
$
|
19,575
|
|
|
$
|
23,408
|
|
—
|
|
$
|
(3,833
|
)
|
|
(16
|
)%
|
|
|
Year Ended December 31,
|
|
Increase
|
|
% Increase
|
|||||||||
|
|
2018
|
|
2017
|
|
(Decrease)
|
|
(Decrease)
|
|||||||
Same Store (49 properties excluding development land)
|
|
|
|
|
|
|
|
|
|||||||
Property revenues
|
|
|
|
|
|
|
|
|
|||||||
Rental revenues
|
|
$
|
72,454
|
|
|
$
|
71,987
|
|
|
$
|
467
|
|
|
1
|
%
|
Other revenues
|
|
26,130
|
|
|
24,746
|
|
|
$
|
1,384
|
|
|
6
|
%
|
||
Total property revenues
|
|
98,584
|
|
|
96,733
|
|
|
1,851
|
|
|
2
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Property expenses
|
|
|
|
|
|
|
|
|
|||||||
Property operation and maintenance
|
|
16,741
|
|
|
17,801
|
|
|
(1,060
|
)
|
|
(6
|
)%
|
|||
Real estate taxes
|
|
13,253
|
|
|
13,032
|
|
|
221
|
|
|
2
|
%
|
|||
Total property expenses
|
|
29,994
|
|
|
30,833
|
|
|
(839
|
)
|
|
(3
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Total property revenues less total property expenses
|
|
68,590
|
|
|
65,900
|
|
|
2,690
|
|
|
4
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Same Store straight line rent adjustments
|
|
(1,168
|
)
|
|
(2,264
|
)
|
|
1,096
|
|
|
(48
|
)%
|
|||
Same Store amortization of above/below market rents
|
|
(172
|
)
|
|
(365
|
)
|
|
193
|
|
|
(53
|
)%
|
|||
Same Store lease termination fees
|
|
(595
|
)
|
|
(537
|
)
|
|
(58
|
)
|
|
11
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Same Store NOI(1)
|
|
$
|
66,655
|
|
|
$
|
62,734
|
|
|
$
|
3,921
|
|
|
6
|
%
|
(1)
|
See below for a reconciliation of property net operating income to net income.
|
|
|
Year Ended December 31,
|
||||||
PROPERTY NET OPERATING INCOME (“NOI”)
|
|
2018
|
|
2017
|
||||
Net income attributable to Whitestone REIT
|
|
$
|
21,431
|
|
|
$
|
8,334
|
|
General and administrative expenses
|
|
23,281
|
|
|
23,949
|
|
||
Depreciation and amortization
|
|
25,679
|
|
|
27,240
|
|
||
Equity in earnings of real estate partnership
|
|
(8,431
|
)
|
|
—
|
|
||
Interest expense
|
|
25,177
|
|
|
23,651
|
|
||
Interest, dividend and other investment income
|
|
(1,055
|
)
|
|
(410
|
)
|
||
Provision for income taxes
|
|
347
|
|
|
386
|
|
||
Gain on sale of assets and properties of continuing operations, net
|
|
(4,629
|
)
|
|
(16
|
)
|
||
Management fee, net of related expenses
|
|
(208
|
)
|
|
—
|
|
||
Profit sharing expense
|
|
—
|
|
|
278
|
|
||
Loss on disposal of assets and properties of continuing operations, net
|
|
82
|
|
|
183
|
|
||
NOI of real estate partnership (pro rata)
|
|
7,725
|
|
|
—
|
|
||
Net income attributable to noncontrolling interests
|
|
550
|
|
|
254
|
|
||
NOI
|
|
$
|
89,949
|
|
|
$
|
83,849
|
|
Non-Same Store NOI (1)
|
|
(13,634
|
)
|
|
(9,683
|
)
|
||
Pillarstone OP properties NOI
|
|
—
|
|
|
(8,266
|
)
|
||
NOI of real estate partnership (pro rata)
|
|
(7,725
|
)
|
|
—
|
|
||
NOI less Non-Same Store NOI and NOI of real estate partnership (pro rata)
|
|
68,590
|
|
|
65,900
|
|
||
Same Store straight line rent adjustments
|
|
(1,168
|
)
|
|
(2,264
|
)
|
||
Same Store amortization of above/below market rents
|
|
(172
|
)
|
|
(365
|
)
|
||
Same Store lease termination fees
|
|
(595
|
)
|
|
(537
|
)
|
||
Same Store NOI (2)
|
|
$
|
66,655
|
|
|
$
|
62,734
|
|
(1)
|
We define “Non-Same Stores” as properties that have been acquired since the beginning of the period being compared and properties that have been sold, but not classified as discontinued operations. For purposes of comparing the twelve months ended December 31, 2018 to the twelve months ended December 31, 2017, Non-Same Stores include properties acquired between January 1, 2017 and December 31, 2018 and properties sold between January 1, 2017 and December 31, 2018, but not included in discontinued operations.
|
(2)
|
We define “Same Stores” as properties that have been owned during the entire period being compared. For purposes of comparing the twelve months ended December 31, 2018 to the twelve months ended December 31, 2017, Same Stores include properties owned before January 1, 2017 and not sold before December 31, 2018. Straight line rent adjustments, above/below market rents, and lease termination fees are excluded.
|
|
|
Year Ended December 31,
|
||||||||||
FFO AND FFO CORE
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net income attributable to Whitestone REIT
|
|
$
|
23,683
|
|
|
$
|
21,431
|
|
|
$
|
8,334
|
|
Adjustments to reconcile to FFO:(1)
|
|
|
|
|
|
|
||||||
Depreciation and amortization of real estate assets
|
|
26,468
|
|
|
25,401
|
|
|
26,290
|
|
|||
Depreciation and amortization of real estate assets of real estate partnership (pro rata)(2)
|
|
2,362
|
|
|
2,903
|
|
|
—
|
|
|||
Gain on disposal of assets and properties of continuing operations, net
|
|
(638
|
)
|
|
(4,547
|
)
|
|
—
|
|
|||
Gain on sale of assets and properties of discontinued operations, net
|
|
(594
|
)
|
|
—
|
|
|
—
|
|
|||
(Gain) loss on sale or disposal of properties or assets of real estate partnership (pro rata)(2)
|
|
(13,800
|
)
|
|
(6,340
|
)
|
|
167
|
|
|||
Net income attributable to noncontrolling interests
|
|
545
|
|
|
550
|
|
|
254
|
|
|||
FFO
|
|
$
|
38,026
|
|
|
$
|
39,398
|
|
|
$
|
35,045
|
|
|
|
|
|
|
|
|
||||||
Share-based compensation expense
|
|
$
|
6,483
|
|
|
$
|
6,758
|
|
|
$
|
10,426
|
|
Proxy contest professional fees
|
|
—
|
|
|
2,534
|
|
|
—
|
|
|||
Early debt extinguishment costs of real estate partnership
|
|
426
|
|
|
88
|
|
|
—
|
|
|||
Acquisition costs
|
|
—
|
|
|
—
|
|
|
1,625
|
|
|||
FFO Core
|
|
$
|
44,935
|
|
|
$
|
48,778
|
|
|
$
|
47,096
|
|
(1)
|
Includes pro-rata share attributable to real estate partnership.
|
(2)
|
Included in equity in earnings of real estate partnership on the consolidated statements of operations and comprehensive income.
|
|
|
Year Ended December 31,
|
||||||||||
PROPERTY NET OPERATING INCOME (“NOI”)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net income attributable to Whitestone REIT
|
|
$
|
23,683
|
|
|
$
|
21,431
|
|
|
$
|
8,334
|
|
General and administrative expenses
|
|
21,661
|
|
|
23,281
|
|
|
23,949
|
|
|||
Depreciation and amortization
|
|
26,740
|
|
|
25,679
|
|
|
27,240
|
|
|||
Equity in earnings of real estate partnership
|
|
(15,076
|
)
|
|
(8,431
|
)
|
|
—
|
|
|||
Interest expense
|
|
26,285
|
|
|
25,177
|
|
|
23,651
|
|
|||
Interest, dividend and other investment income
|
|
(659
|
)
|
|
(1,055
|
)
|
|
(410
|
)
|
|||
Provision for income taxes
|
|
400
|
|
|
347
|
|
|
386
|
|
|||
Gain on sale of assets and properties of continuing operations, net
|
|
(853
|
)
|
|
(4,629
|
)
|
|
(16
|
)
|
|||
Gain on sale of assets and properties of discontinued operations, net
|
|
(594
|
)
|
|
—
|
|
|
—
|
|
|||
Management fee, net of related expenses
|
|
(42
|
)
|
|
(208
|
)
|
|
—
|
|
|||
Profit sharing expense
|
|
—
|
|
|
—
|
|
|
278
|
|
|||
Loss on disposal of assets and properties of continuing operations, net
|
|
215
|
|
|
82
|
|
|
183
|
|
|||
NOI of real estate partnership (pro rata)
|
|
6,273
|
|
|
7,725
|
|
|
—
|
|
|||
Net income attributable to noncontrolling interests
|
|
545
|
|
|
550
|
|
|
254
|
|
|||
NOI
|
|
$
|
88,578
|
|
|
$
|
89,949
|
|
|
$
|
83,849
|
|
•
|
Application of New Accounting Pronouncements, including proper assessment of judgment items in complex accounting transactions - The Company did not have effective controls to ensure the proper application of new accounting pronouncements in its financial statements. After its review of the error and its internal controls over financial reporting and disclosure controls and procedures, the Company determined that it did not appropriately weigh its legal rights in its assessment of the transfer of control criteria under Topic 606 as it pertained to the Contribution.
|
•
|
The formation and implementation of a disclosure review committee, including outside technical advisors, the Chief Financial Officer, accounting staff, and other members of management. The committee meets quarterly, at a minimum, to provide guidance and oversight to ensure the proper implementation of the enhanced internal controls regarding the adoption of new accounting pronouncements. The committee met twice and reviewed its work with the Audit Committee prior to filing of the Quarterly Report on Form 10-Q for the three months ended March 31, 2019 and met once and reviewed its work with the Audit Committee prior to the filing of the Quarterly Report on Form 10-Q for the three and six months ended June 30, 2019.
|
•
|
Enhancements to our internal controls regarding the adoption of new accounting pronouncements, including quarterly review of new accounting pronouncements with the Audit Committee and a discussion of key judgment areas.
|
•
|
Engagement of outside technical experts to assist the Company in the application and adoption of new accounting pronouncements.
|
•
|
Completion of training of accounting personnel.
|
•
|
The hiring of additional qualified accounting staff.
|
Plan Category
|
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
|
Weighted-average exercise price of outstanding options, warrants and rights
|
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|
|
|||||
|
|
(a)
|
|
(b)
|
|
(c)
|
|
|||||
Equity compensation plans approved by security holders
|
|
—
|
|
(1
|
)
|
$
|
—
|
|
|
1,792,528
|
|
(2)
|
|
|
|
|
|
|
|
|
|||||
Equity compensation plans not approved by security holders
|
|
—
|
|
|
—
|
|
|
—
|
|
(3)
|
||
|
|
|
|
|
|
|
|
|||||
Total
|
|
—
|
|
|
$
|
—
|
|
|
1,792,528
|
|
|
(1)
|
Excludes 1,135,172 common shares subject to outstanding restricted common share units granted pursuant to our 2008 Long-Term Equity Incentive Ownership Plan, as amended (the “2008 Plan”) and 1,575,418 common shares granted pursuant to our 2018 Long-Term Equity Incentive Ownership Plan (the “2018 Plan”).
|
(2)
|
At our annual meeting of shareholders on May 11, 2017, our shareholders voted to approve the 2018 Plan. The 2018 Plan provides for the issuance of up to 3,433,831 common shares and OP units pursuant to awards under the 2018 Plan. The 2018 Plan became effective on July 30, 2018, which is the day after the 2008 Plan expired. Pursuant to the 2008 Plan, the maximum aggregate number of common shares that were issuable under the 2008 Plan was increased upon each issuance of common shares by the Company so that at any time the maximum number of shares that were issuable under the 2008 Plan equaled 12.5% of the aggregate number of common shares of the Company and OP units issued and outstanding (other than units issued to or held by the Company).
|
(3)
|
Excludes 8,333 restricted common shares issued to trustees outside the 2008 Plan.
|
1.
|
Financial Statements. The list of our financial statements filed as part of this Annual Report on Form 10-K is set forth on page F-1 herein.
|
2.
|
Financial Statement Schedules.
|
a.
|
Schedule II - Valuation and Qualifying Accounts
|
b.
|
Schedule III - Real Estate and Accumulated Depreciation
|
3.
|
Exhibits. The list of exhibits filed as part of this Annual Report on Form 10-K in response to Item 601 of Regulation S-K is submitted on the Exhibit Index attached hereto and incorporated herein by reference.
|
Exhibit No.
|
Description
|
Exhibit No.
|
Description
|
Exhibit No.
|
Description
|
Exhibit No.
|
Description
|
Exhibit No.
|
Description
|
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
|
|
|
|
|
WHITESTONE REIT
|
Date:
|
March 2, 2020
|
By:
|
|
/s/ James C. Mastandrea
|
|
|
|
|
James C. Mastandrea, Chairman and CEO
|
March 2, 2020
|
/s/ James C. Mastandrea
|
|
|
James C. Mastandrea, Chairman and CEO
|
|
|
(Principal Executive Officer)
|
|
|
|
|
March 2, 2020
|
/s/ David K. Holeman
|
|
|
David K. Holeman, Chief Financial Officer
|
|
|
(Principal Financial and Principal Accounting Officer)
|
|
|
|
|
March 2, 2020
|
/s/ Nandita Berry
|
|
|
Nandita Berry, Trustee
|
|
|
|
|
March 2, 2020
|
/s/ Jeffrey A. Jones
|
|
|
Jeffrey A. Jones, Trustee
|
|
|
|
|
March 2, 2020
|
/s/ Donald F. Keating
|
|
|
Donald F. Keating, Trustee
|
|
|
|
|
March 2, 2020
|
/s/ Paul T. Lambert
|
|
|
Paul T. Lambert, Trustee
|
|
|
|
|
March 2, 2020
|
/s/ Jack L. Mahaffey
|
|
|
Jack L. Mahaffey, Trustee
|
|
|
|
|
March 2, 2020
|
/s/ David F. Taylor
|
|
|
David F. Taylor, Trustee
|
|
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
|
||
|
|
|
|
|
Page
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
Whitestone REIT and Subsidiaries
|
||||||||
CONSOLIDATED BALANCE SHEETS
|
||||||||
(in thousands, except per share data)
|
||||||||
|
|
|
||||||
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
ASSETS
|
||||||||
Real estate assets, at cost
|
|
|
|
|
||||
Property
|
|
$
|
1,099,955
|
|
|
$
|
1,052,238
|
|
Accumulated depreciation
|
|
(137,933
|
)
|
|
(113,300
|
)
|
||
Total real estate assets
|
|
962,022
|
|
|
938,938
|
|
||
Investment in real estate partnership
|
|
34,097
|
|
|
26,236
|
|
||
Cash and cash equivalents
|
|
15,530
|
|
|
13,658
|
|
||
Restricted cash
|
|
113
|
|
|
128
|
|
||
Escrows and acquisition deposits
|
|
8,388
|
|
|
8,211
|
|
||
Accrued rents and accounts receivable, net of allowance for doubtful accounts
|
|
22,854
|
|
|
21,642
|
|
||
Receivable due from related party
|
|
477
|
|
|
394
|
|
||
Financed receivable due from related party
|
|
—
|
|
|
5,661
|
|
||
Unamortized lease commissions, legal fees and loan costs
|
|
8,960
|
|
|
6,698
|
|
||
Prepaid expenses and other assets(1)
|
|
3,819
|
|
|
7,306
|
|
||
Total assets
|
|
$
|
1,056,260
|
|
|
$
|
1,028,872
|
|
LIABILITIES AND EQUITY
|
||||||||
Liabilities:
|
|
|
|
|
||||
Notes payable
|
|
$
|
644,699
|
|
|
$
|
618,205
|
|
Accounts payable and accrued expenses(2)
|
|
39,336
|
|
|
33,729
|
|
||
Payable due to related party
|
|
307
|
|
|
58
|
|
||
Tenants' security deposits
|
|
6,617
|
|
|
6,130
|
|
||
Dividends and distributions payable
|
|
12,203
|
|
|
11,600
|
|
||
Total liabilities
|
|
703,162
|
|
|
669,722
|
|
||
Commitments and contingencies:
|
|
—
|
|
|
—
|
|
||
Equity:
|
|
|
|
|
||||
Preferred shares, $0.001 par value per share; 50,000,000 shares authorized; none issued and outstanding as of December 31, 2019 and December 31, 2018
|
|
—
|
|
|
—
|
|
||
Common shares, $0.001 par value per share; 400,000,000 shares authorized; 41,492,117 and 39,778,029 issued and outstanding as of December 31, 2019 and December 31, 2018, respectively
|
|
41
|
|
|
39
|
|
||
Additional paid-in capital
|
|
554,816
|
|
|
527,662
|
|
||
Accumulated deficit
|
|
(204,049
|
)
|
|
(181,361
|
)
|
||
Accumulated other comprehensive gain (loss)
|
|
(5,491
|
)
|
|
4,116
|
|
||
Total Whitestone REIT shareholders' equity
|
|
345,317
|
|
|
350,456
|
|
||
Noncontrolling interest in subsidiary
|
|
7,781
|
|
|
8,694
|
|
||
Total equity
|
|
353,098
|
|
|
359,150
|
|
||
Total liabilities and equity
|
|
$
|
1,056,260
|
|
|
$
|
1,028,872
|
|
|
|
|
||
|
|
December 31,
|
||
|
|
2019
|
|
2018
|
(1) Operating lease right of use assets (net) (related to adoption of Topic 842)
|
|
$
|
1,328
|
|
|
N/A
|
(2) Operating lease liabilities (related to adoption of Topic 842)
|
|
$
|
1,331
|
|
|
N/A
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Revenues
|
|
|
|
|
|
|
||||||
Rental(1)
|
|
$
|
117,014
|
|
|
$
|
117,464
|
|
|
$
|
124,792
|
|
Management, transaction, and other fees
|
|
2,237
|
|
|
2,399
|
|
|
1,167
|
|
|||
Total revenues
|
|
119,251
|
|
|
119,863
|
|
|
125,959
|
|
|||
|
|
|
|
|
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
|
26,740
|
|
|
25,679
|
|
|
27,240
|
|
|||
Operating and maintenance
|
|
20,611
|
|
|
21,069
|
|
|
24,213
|
|
|||
Real estate taxes
|
|
16,293
|
|
|
16,362
|
|
|
17,897
|
|
|||
General and administrative(2)
|
|
21,661
|
|
|
23,281
|
|
|
23,949
|
|
|||
Total operating expenses
|
|
85,305
|
|
|
86,391
|
|
|
93,299
|
|
|||
|
|
|
|
|
|
|
||||||
Other expenses (income)
|
|
|
|
|
|
|
|
|
|
|||
Interest expense
|
|
26,285
|
|
|
25,177
|
|
|
23,651
|
|
|||
Gain on sale of properties
|
|
(853
|
)
|
|
(4,629
|
)
|
|
(16
|
)
|
|||
Loss on sale or disposal of assets
|
|
215
|
|
|
82
|
|
|
183
|
|
|||
Interest, dividend and other investment income
|
|
(659
|
)
|
|
(1,055
|
)
|
|
(410
|
)
|
|||
Total other expense
|
|
24,988
|
|
|
19,575
|
|
|
23,408
|
|
|||
|
|
|
|
|
|
|
||||||
Income before equity investments in real estate partnerships and income tax
|
|
8,958
|
|
|
13,897
|
|
|
9,252
|
|
|||
|
|
|
|
|
|
|
||||||
Equity in earnings of real estate partnership
|
|
15,076
|
|
|
8,431
|
|
|
—
|
|
|||
Provision for income tax
|
|
(400
|
)
|
|
(347
|
)
|
|
(386
|
)
|
|||
Profit sharing expense
|
|
—
|
|
|
—
|
|
|
(278
|
)
|
|||
Income from continuing operations
|
|
23,634
|
|
|
21,981
|
|
|
8,588
|
|
|||
|
|
|
|
|
|
|
||||||
Gain on sale of property from discontinued operations
|
|
594
|
|
|
—
|
|
|
—
|
|
|||
Income from discontinued operations
|
|
594
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
||||||
Net income
|
|
24,228
|
|
|
21,981
|
|
|
8,588
|
|
|||
|
|
|
|
|
|
|
||||||
Less: Net income attributable to noncontrolling interests
|
|
545
|
|
|
550
|
|
|
254
|
|
|||
|
|
|
|
|
|
|
||||||
Net income attributable to Whitestone REIT
|
|
$
|
23,683
|
|
|
$
|
21,431
|
|
|
$
|
8,334
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Basic Earnings Per Share:
|
|
|
|
|
|
|
||||||
Income from continuing operations attributable to Whitestone REIT, excluding amounts attributable to unvested restricted shares
|
|
$
|
0.57
|
|
|
$
|
0.54
|
|
|
$
|
0.22
|
|
Income from discontinued operations attributable to Whitestone REIT
|
|
0.02
|
|
|
0.00
|
|
|
0.00
|
|
|||
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares
|
|
$
|
0.59
|
|
|
$
|
0.54
|
|
|
$
|
0.22
|
|
Diluted Earnings Per Share:
|
|
|
|
|
|
|
||||||
Income from continuing operations attributable to Whitestone REIT, excluding amounts attributable to unvested restricted shares
|
|
$
|
0.56
|
|
|
$
|
0.52
|
|
|
$
|
0.22
|
|
Income from discontinued operations attributable to Whitestone REIT
|
|
0.01
|
|
|
0.00
|
|
|
0.00
|
|
|||
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares
|
|
$
|
0.57
|
|
|
$
|
0.52
|
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
||||||
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
40,184
|
|
|
39,274
|
|
|
35,428
|
|
|||
Diluted
|
|
41,462
|
|
|
40,612
|
|
|
36,255
|
|
|||
|
|
|
|
|
|
|
||||||
Consolidated Statements of Comprehensive Income
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
24,228
|
|
|
$
|
21,981
|
|
|
$
|
8,588
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive gain (loss)
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Unrealized gain (loss) on cash flow hedging activities
|
|
(9,828
|
)
|
|
1,192
|
|
|
2,022
|
|
|||
Unrealized gain on available-for-sale marketable securities
|
|
—
|
|
|
18
|
|
|
118
|
|
|||
|
|
|
|
|
|
|
||||||
Comprehensive income
|
|
14,400
|
|
|
23,191
|
|
|
10,728
|
|
|||
|
|
|
|
|
|
|
||||||
Less: Net income attributable to noncontrolling interests
|
|
545
|
|
|
550
|
|
|
254
|
|
|||
Less: Comprehensive gain (loss) attributable to noncontrolling interests
|
|
(221
|
)
|
|
30
|
|
|
63
|
|
|||
|
|
|
|
|
|
|
||||||
Comprehensive income attributable to Whitestone REIT
|
|
$
|
14,076
|
|
|
$
|
22,611
|
|
|
$
|
10,411
|
|
|
|
Year Ended December 31,
|
||||
|
|
2019
|
|
2018
|
|
2017
|
(1) Rental
|
|
|
|
|
|
|
||||||
Rental revenues
|
|
$
|
86,750
|
|
|
$
|
86,644
|
|
|
$
|
94,568
|
|
Recoveries
|
|
31,748
|
|
|
30,820
|
|
|
30,224
|
|
|||
Bad debt
|
|
(1,484
|
)
|
|
N/A
|
|
|
N/A
|
|
|||
Total rental
|
|
$
|
117,014
|
|
|
$
|
117,464
|
|
|
$
|
124,792
|
|
(2) Bad debt included in operating and maintenance expenses prior to adoption of Topic 842
|
|
N/A
|
|
$
|
1,391
|
|
|
$
|
2,340
|
|
Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in thousands, except per share and unit data)
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
Additional
|
|
|
|
Other
|
|
Total
|
|
Noncontrolling
|
|
|
||||||||||||||||||||
|
|
Common Shares
|
|
Paid-in
|
|
Accumulated
|
|
Comprehensive
|
|
Shareholders’
|
|
Interests
|
|
Total
|
||||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
Gain (Loss)
|
|
Equity
|
|
Units
|
|
Dollars
|
|
Equity
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance, December 31, 2016
|
|
29,468
|
|
|
$
|
29
|
|
|
$
|
396,494
|
|
|
$
|
(141,695
|
)
|
|
$
|
859
|
|
|
$
|
255,687
|
|
|
1,103
|
|
|
$
|
11,941
|
|
|
$
|
267,628
|
|
Exchange of noncontrolling interest OP units for common shares
|
|
19
|
|
|
—
|
|
|
206
|
|
|
—
|
|
|
—
|
|
|
206
|
|
|
(19
|
)
|
|
(206
|
)
|
|
—
|
|
|||||||
Issuance of common shares under dividend reinvestment plan
|
|
9
|
|
|
—
|
|
|
127
|
|
|
—
|
|
|
—
|
|
|
127
|
|
|
—
|
|
|
—
|
|
|
127
|
|
|||||||
Issuance of common shares - ATM Program, net of offering costs
|
|
1,324
|
|
|
1
|
|
|
18,516
|
|
|
—
|
|
|
—
|
|
|
18,517
|
|
|
—
|
|
|
—
|
|
|
18,517
|
|
|||||||
Issuance of common shares - overnight offering, net of offering costs
|
|
8,019
|
|
|
8
|
|
|
99,887
|
|
|
—
|
|
|
—
|
|
|
99,895
|
|
|
—
|
|
|
—
|
|
|
99,895
|
|
|||||||
Repurchase of common shares (2)
|
|
(324
|
)
|
|
—
|
|
|
(4,339
|
)
|
|
—
|
|
|
—
|
|
|
(4,339
|
)
|
|
—
|
|
|
—
|
|
|
(4,339
|
)
|
|||||||
Share-based compensation
|
|
707
|
|
|
—
|
|
|
10,410
|
|
|
—
|
|
|
—
|
|
|
10,410
|
|
|
—
|
|
|
—
|
|
|
10,410
|
|
|||||||
Distributions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43,323
|
)
|
|
—
|
|
|
(43,323
|
)
|
|
—
|
|
|
(1,239
|
)
|
|
(44,562
|
)
|
|||||||
Unrealized gain on change in fair value of cash flow hedge
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,962
|
|
|
1,962
|
|
|
—
|
|
|
60
|
|
|
2,022
|
|
|||||||
Unrealized gain on change in fair value of available-for sale marketable securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
115
|
|
|
115
|
|
|
—
|
|
|
3
|
|
|
118
|
|
|||||||
Reallocation of ownership percentage between parent and subsidiary
|
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,334
|
|
|
—
|
|
|
8,334
|
|
|
—
|
|
|
254
|
|
|
8,588
|
|
|||||||
Balance, December 31, 2017
|
|
39,222
|
|
|
38
|
|
|
521,314
|
|
|
(176,684
|
)
|
|
2,936
|
|
|
347,604
|
|
|
1,084
|
|
|
10,800
|
|
|
358,404
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Impact of change in accounting principal:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
ASU 2014-09(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,119
|
|
|
—
|
|
|
19,119
|
|
|
—
|
|
|
—
|
|
|
19,119
|
|
|||||||
Balance January 1, 2018
|
|
39,222
|
|
|
38
|
|
|
521,314
|
|
|
(157,565
|
)
|
|
2,936
|
|
|
366,723
|
|
|
1,084
|
|
|
10,800
|
|
|
377,523
|
|
|||||||
Exchange of noncontrolling interest OP units for common shares
|
|
155
|
|
|
1
|
|
|
1,545
|
|
|
—
|
|
|
—
|
|
|
1,546
|
|
|
(155
|
)
|
|
(1,546
|
)
|
|
—
|
|
|||||||
Issuance of common shares under dividend reinvestment plan
|
|
10
|
|
|
—
|
|
|
133
|
|
|
—
|
|
|
—
|
|
|
133
|
|
|
—
|
|
|
—
|
|
|
133
|
|
|||||||
Exchange offer costs
|
|
—
|
|
|
—
|
|
|
(126
|
)
|
|
—
|
|
|
—
|
|
|
(126
|
)
|
|
—
|
|
|
—
|
|
|
(126
|
)
|
|||||||
Repurchase of common shares (2)
|
|
(160
|
)
|
|
—
|
|
|
(1,961
|
)
|
|
—
|
|
|
—
|
|
|
(1,961
|
)
|
|
—
|
|
|
—
|
|
|
(1,961
|
)
|
|||||||
Share-based compensation
|
|
551
|
|
|
—
|
|
|
6,742
|
|
|
—
|
|
|
—
|
|
|
6,742
|
|
|
—
|
|
|
—
|
|
|
6,742
|
|
|||||||
Distributions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(45,227
|
)
|
|
—
|
|
|
(45,227
|
)
|
|
—
|
|
|
(1,125
|
)
|
|
(46,352
|
)
|
|||||||
Unrealized gain on change in fair value of cash flow hedge
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,162
|
|
|
1,162
|
|
|
—
|
|
|
30
|
|
|
1,192
|
|
|||||||
Unrealized gain on change in fair value of available-for sale marketable securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|||||||
Reallocation of ownership percentage between parent and subsidiary
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,431
|
|
|
—
|
|
|
21,431
|
|
|
—
|
|
|
550
|
|
|
21,981
|
|
|||||||
Balance, December 31, 2018
|
|
39,778
|
|
|
$
|
39
|
|
|
$
|
527,662
|
|
|
$
|
(181,361
|
)
|
|
$
|
4,116
|
|
|
$
|
350,456
|
|
|
929
|
|
|
$
|
8,694
|
|
|
$
|
359,150
|
|
See the accompanying notes to consolidated financial statements.
|
||||||||||||||||||||||||||||||||||
Exchange of noncontrolling interest OP units for common shares
|
|
20
|
|
|
$
|
—
|
|
|
$
|
186
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
186
|
|
|
(20
|
)
|
|
$
|
(186
|
)
|
|
$
|
—
|
|
Issuance of common shares under dividend reinvestment plan
|
|
10
|
|
|
—
|
|
|
137
|
|
|
—
|
|
|
—
|
|
|
137
|
|
|
—
|
|
|
—
|
|
|
137
|
|
|||||||
Issuance of common shares - ATM Program, net of offering costs
|
|
1,612
|
|
|
2
|
|
|
21,244
|
|
|
—
|
|
|
—
|
|
|
21,246
|
|
|
—
|
|
|
—
|
|
|
21,246
|
|
|||||||
Exchange offer costs
|
|
—
|
|
|
—
|
|
|
(120
|
)
|
|
—
|
|
|
—
|
|
|
(120
|
)
|
|
—
|
|
|
—
|
|
|
(120
|
)
|
|||||||
Repurchase of common shares (2)
|
|
(65
|
)
|
|
—
|
|
|
(776
|
)
|
|
—
|
|
|
—
|
|
|
(776
|
)
|
|
—
|
|
|
—
|
|
|
(776
|
)
|
|||||||
Share-based compensation
|
|
137
|
|
|
—
|
|
|
6,483
|
|
|
—
|
|
|
—
|
|
|
6,483
|
|
|
—
|
|
|
—
|
|
|
6,483
|
|
|||||||
Distributions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46,371
|
)
|
|
—
|
|
|
(46,371
|
)
|
|
—
|
|
|
(1,051
|
)
|
|
(47,422
|
)
|
|||||||
Unrealized loss on change in fair value of cash flow hedge
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,607
|
)
|
|
(9,607
|
)
|
|
—
|
|
|
(221
|
)
|
|
(9,828
|
)
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,683
|
|
|
—
|
|
|
23,683
|
|
|
—
|
|
|
545
|
|
|
24,228
|
|
|||||||
Balance, December 31, 2019
|
|
41,492
|
|
|
$
|
41
|
|
|
$
|
554,816
|
|
|
$
|
(204,049
|
)
|
|
$
|
(5,491
|
)
|
|
$
|
345,317
|
|
|
909
|
|
|
$
|
7,781
|
|
|
$
|
353,098
|
|
(1)
|
Represents the impact of change in accounting principal for our modified retrospective adoption of ASU 2014-09. See Note 2 of the notes to the consolidated financial statements for additional disclosure.
|
(2)
|
During the years ended December 31, 2019, 2018 and 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 shares.
|
Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) |
||||||||||||
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net income from continuing operations
|
|
$
|
23,634
|
|
|
$
|
21,981
|
|
|
$
|
8,588
|
|
Net income from discontinued operations
|
|
594
|
|
|
—
|
|
|
—
|
|
|||
Net income
|
|
24,228
|
|
|
21,981
|
|
|
8,588
|
|
|||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
|
26,740
|
|
|
25,679
|
|
|
27,240
|
|
|||
Amortization of deferred loan costs
|
|
1,095
|
|
|
1,092
|
|
|
1,283
|
|
|||
Amortization of notes payable discount
|
|
—
|
|
|
—
|
|
|
508
|
|
|||
Loss on sale of marketable securities
|
|
—
|
|
|
20
|
|
|
91
|
|
|||
Gain on sale or disposal of assets and properties
|
|
(638
|
)
|
|
(4,547
|
)
|
|
167
|
|
|||
Bad debt
|
|
1,484
|
|
|
1,391
|
|
|
2,340
|
|
|||
Share-based compensation
|
|
6,483
|
|
|
6,741
|
|
|
10,410
|
|
|||
Equity in earnings of real estate partnership
|
|
(15,076
|
)
|
|
(8,431
|
)
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||||||
Escrows and acquisition deposits
|
|
(177
|
)
|
|
(295
|
)
|
|
(3,570
|
)
|
|||
Accrued rents and accounts receivable
|
|
(2,998
|
)
|
|
(1,893
|
)
|
|
(5,430
|
)
|
|||
Receivable due from (to) related party
|
|
(83
|
)
|
|
610
|
|
|
—
|
|
|||
Distributions from real estate partnership
|
|
6,926
|
|
|
1,324
|
|
|
—
|
|
|||
Unamortized lease commissions, legal fees and loan costs
|
|
(1,824
|
)
|
|
(1,676
|
)
|
|
(2,299
|
)
|
|||
Prepaid expenses and other assets
|
|
(4,163
|
)
|
|
1,175
|
|
|
168
|
|
|||
Accounts payable and accrued expenses
|
|
5,609
|
|
|
(2,429
|
)
|
|
1,337
|
|
|||
Payable due to (from) related party
|
|
249
|
|
|
(1,621
|
)
|
|
—
|
|
|||
Tenants' security deposits
|
|
487
|
|
|
436
|
|
|
565
|
|
|||
Net cash provided by operating activities
|
|
47,748
|
|
|
39,557
|
|
|
41,398
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|||
Acquisitions of real estate
|
|
(34,804
|
)
|
|
—
|
|
|
(125,468
|
)
|
|||
Additions to real estate
|
|
(13,243
|
)
|
|
(11,638
|
)
|
|
(17,575
|
)
|
|||
Proceeds from sales of properties
|
|
—
|
|
|
12,574
|
|
|
26
|
|
|||
Proceeds from financed receivable due from related party
|
|
5,661
|
|
|
9,812
|
|
|
—
|
|
|||
Investment in real estate partnership
|
|
—
|
|
|
—
|
|
|
(2,394
|
)
|
|||
Proceeds from sales of marketable securities
|
|
—
|
|
|
30
|
|
|
513
|
|
|||
Net cash provided by (used in) investing activities
|
|
(42,386
|
)
|
|
10,778
|
|
|
(144,898
|
)
|
|||
Net cash provided by investing activities of discontinued operations
|
|
594
|
|
|
—
|
|
|
—
|
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|||
Distributions paid to common shareholders
|
|
(45,627
|
)
|
|
(44,944
|
)
|
|
(40,472
|
)
|
|||
Distributions paid to OP unit holders
|
|
(1,055
|
)
|
|
(1,155
|
)
|
|
(1,241
|
)
|
|||
Proceeds from issuance of common shares, net of offering costs
|
|
21,244
|
|
|
—
|
|
|
118,412
|
|
|||
Payments of exchange offer costs
|
|
(120
|
)
|
|
(126
|
)
|
|
—
|
|
|||
Proceeds from bonds payable
|
|
100,000
|
|
|
—
|
|
|
—
|
|
|||
Net proceeds from (payments of) credit facility
|
|
(66,700
|
)
|
|
9,000
|
|
|
45,600
|
|
|||
Repayments of notes payable
|
|
(8,095
|
)
|
|
(2,543
|
)
|
|
(11,543
|
)
|
|||
Payments of loan origination costs
|
|
(2,970
|
)
|
|
(30
|
)
|
|
(695
|
)
|
|||
Repurchase of common shares
|
|
(776
|
)
|
|
(1,961
|
)
|
|
(4,339
|
)
|
|||
Net cash used in financing activities
|
|
(4,099
|
)
|
|
(41,759
|
)
|
|
105,722
|
|
|||
Net increase in cash, cash equivalents and restricted cash
|
|
1,857
|
|
|
8,576
|
|
|
2,222
|
|
|||
Cash, cash equivalents and restricted cash at beginning of period
|
|
13,786
|
|
|
5,210
|
|
|
2,988
|
|
|||
Cash, cash equivalents and restricted cash at end of period (1)
|
|
$
|
15,643
|
|
|
$
|
13,786
|
|
|
$
|
5,210
|
|
(1)
|
For a reconciliation of cash, cash equivalents and restricted cash, see supplemental disclosures below.
|
Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Supplemental Disclosures
(in thousands)
|
||||||||||||
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
|||
Cash paid for interest
|
|
$
|
25,360
|
|
|
$
|
24,610
|
|
|
$
|
22,541
|
|
Cash paid for taxes
|
|
$
|
396
|
|
|
$
|
304
|
|
|
$
|
337
|
|
Non cash investing and financing activities:
|
|
|
|
|
|
|
|
|
|
|||
Disposal of fully depreciated real estate
|
|
$
|
234
|
|
|
$
|
937
|
|
|
$
|
1,036
|
|
Financed insurance premiums
|
|
$
|
1,238
|
|
|
$
|
1,273
|
|
|
$
|
1,115
|
|
Value of shares issued under dividend reinvestment plan
|
|
$
|
137
|
|
|
$
|
133
|
|
|
$
|
127
|
|
Value of common shares exchanged for OP units
|
|
$
|
186
|
|
|
$
|
1,546
|
|
|
$
|
206
|
|
Change in fair value of available-for-sale securities
|
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
118
|
|
Change in fair value of cash flow hedge
|
|
$
|
(9,828
|
)
|
|
$
|
1,192
|
|
|
$
|
2,022
|
|
Reallocation of ownership percentage between parent and subsidiary
|
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
13
|
|
Debt issued with acquisitions of real estate
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
80,000
|
|
Property received as termination fee
|
|
$
|
—
|
|
|
$
|
250
|
|
|
$
|
—
|
|
|
|
December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cash, cash equivalents and restricted cash
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
15,530
|
|
|
$
|
13,658
|
|
|
$
|
5,005
|
|
Restricted cash
|
|
113
|
|
|
128
|
|
|
205
|
|
|||
Total cash, cash equivalents and restricted cash
|
|
$
|
15,643
|
|
|
$
|
13,786
|
|
|
$
|
5,210
|
|
•
|
53 wholly-owned properties that meet our Community Centered Properties® strategy; and
|
•
|
five parcels of land held for future development.
|
•
|
Apply Topic 842 to each lease that existed at the beginning of the earliest comparative period presented in the financial statements as well as leases that commenced after that date. Under this method, prior comparative periods presented are adjusted. For leases that commenced prior to the beginning of the earliest comparative period presented, a cumulative-effect adjustment is recognized at that date.
|
•
|
Apply the guidance to each lease that had commenced as of the beginning of the reporting period in which the entity first applies the lease standard with a cumulative-effect adjustment as of that date. Prior comparative periods would not be adjusted under this method.
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands, except per share data)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Total revenues
|
|
$
|
122,286
|
|
|
$
|
123,243
|
|
|
$
|
137,043
|
|
Net income
|
|
$
|
24,047
|
|
|
$
|
21,876
|
|
|
$
|
11,217
|
|
Net income attributable to Whitestone REIT (1)
|
|
$
|
23,502
|
|
|
$
|
21,326
|
|
|
$
|
10,888
|
|
|
|
|
|
|
|
|
||||||
Basic Earnings Per Share:
|
|
$
|
0.58
|
|
|
$
|
0.54
|
|
|
$
|
0.28
|
|
|
|
|
|
|
|
|
||||||
Diluted Earnings Per Share:
|
|
$
|
0.57
|
|
|
$
|
0.52
|
|
|
$
|
0.27
|
|
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
||||||
Basic (2)
|
|
40,184
|
|
|
39,274
|
|
|
37,933
|
|
|||
Diluted (2)
|
|
41,462
|
|
|
40,612
|
|
|
38,760
|
|
(1)
|
Net income attributable to Whitestone REIT reflects historical ownership percentages and does not reflect the effects of the April 2017 Offering (as defined in Note 14), assuming the sale of the common shares took place on January 1, 2017, as the related impact on ownership percentage is minimal.
|
(2)
|
Pro forma weighted averages reflect the April 2017 Offering, assuming the sale of the common shares took place on January 1, 2017.
|
|
|
|
The Company’s Investment as of December 31,
|
||||||
|
|
|
2019
|
|
2018
|
||||
Real estate partnership
|
Ownership Interest
|
|
|
|
|
||||
Pillarstone OP(1)(2)
|
81.4%
|
|
$
|
34,097
|
|
|
$
|
26,236
|
|
Total real estate partnership(3)
|
|
|
$
|
34,097
|
|
|
$
|
26,236
|
|
|
|
Year Ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Pillarstone OP
|
|
$
|
15,076
|
|
|
$
|
8,431
|
|
|
|
Year Ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Assets:
|
|
|
|
|
||||
Real estate, net
|
|
$
|
50,338
|
|
|
$
|
72,661
|
|
Other assets
|
|
6,742
|
|
|
6,617
|
|
||
Total assets
|
|
57,080
|
|
|
79,278
|
|
||
Liabilities and equity:
|
|
|
|
|
||||
Notes payable
|
|
15,434
|
|
|
47,064
|
|
||
Other liabilities
|
|
3,575
|
|
|
4,322
|
|
||
Equity
|
|
38,071
|
|
|
27,892
|
|
||
Total liabilities and equity
|
|
57,080
|
|
|
79,278
|
|
||
Company’s share of equity
|
|
31,008
|
|
|
22,717
|
|
||
Cost of investment in excess of the Company’s share of underlying net book value
|
|
3,089
|
|
|
3,519
|
|
||
Carrying value of investment in real estate partnership
|
|
$
|
34,097
|
|
|
$
|
26,236
|
|
|
|
Year Ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Rental revenues
|
|
$
|
14,253
|
|
|
$
|
17,180
|
|
Property expenses
|
|
(9,045
|
)
|
|
(6,687
|
)
|
||
Other expenses
|
|
(3,449
|
)
|
|
(7,848
|
)
|
||
Gain on sale of properties or disposal of assets
|
|
16,943
|
|
|
7,839
|
|
||
Net income
|
|
$
|
18,702
|
|
|
$
|
10,484
|
|
|
|
||
Real estate assets, at cost
|
|
||
Property
|
$
|
95,146
|
|
Accumulated depreciation
|
(35,980
|
)
|
|
Total real estate assets
|
59,166
|
|
|
|
|
||
Investment in real estate partnership
|
4,095
|
|
|
|
|
||
Liabilities
|
|
||
Notes payable(1)
|
(48,840
|
)
|
|
|
|
||
Net carrying value
|
$
|
14,421
|
|
(1)
|
Excludes approximately $15.5 million in notes payable due to Whitestone as of December 31, 2017.
|
Net carrying value
|
$
|
14,421
|
|
OP Unit Purchase Agreement
|
3,000
|
|
|
Notes payable
|
48,840
|
|
|
Maximum exposure to loss
|
$
|
66,261
|
|
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Tenant receivables
|
|
$
|
16,741
|
|
|
$
|
14,686
|
|
Accrued rents and other recoveries
|
|
16,983
|
|
|
16,423
|
|
||
Allowance for doubtful accounts
|
|
(11,173
|
)
|
|
(9,746
|
)
|
||
Other receivables
|
|
303
|
|
|
279
|
|
||
Totals
|
|
$
|
22,854
|
|
|
$
|
21,642
|
|
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Leasing commissions
|
|
$
|
9,868
|
|
|
$
|
8,789
|
|
Deferred legal cost
|
|
393
|
|
|
406
|
|
||
Deferred financing cost
|
|
3,908
|
|
|
4,076
|
|
||
Total cost
|
|
14,169
|
|
|
13,271
|
|
||
Less: leasing commissions accumulated amortization
|
|
(4,200
|
)
|
|
(3,534
|
)
|
||
Less: deferred legal cost accumulated amortization
|
|
(179
|
)
|
|
(125
|
)
|
||
Less: deferred financing cost accumulated amortization
|
|
(830
|
)
|
|
(2,914
|
)
|
||
Total cost, net of accumulated amortization
|
|
$
|
8,960
|
|
|
$
|
6,698
|
|
Years Ended December 31,
|
|
Leasing Commissions
|
|
Deferred Legal Costs
|
|
Deferred Financing Costs
|
|
Total
|
||||||||
2020
|
|
$
|
1,593
|
|
|
$
|
59
|
|
|
$
|
900
|
|
|
$
|
2,552
|
|
2021
|
|
1,365
|
|
|
45
|
|
|
900
|
|
|
2,310
|
|
||||
2022
|
|
1,117
|
|
|
35
|
|
|
839
|
|
|
1,991
|
|
||||
2023
|
|
853
|
|
|
22
|
|
|
220
|
|
|
1,095
|
|
||||
2024
|
|
612
|
|
|
20
|
|
|
192
|
|
|
824
|
|
||||
Thereafter
|
|
128
|
|
|
33
|
|
|
27
|
|
|
188
|
|
||||
Total
|
|
$
|
5,668
|
|
|
$
|
214
|
|
|
$
|
3,078
|
|
|
$
|
8,960
|
|
Years Ended December 31,
|
|
Minimum Future Rents(1)
|
||
2020
|
|
$
|
83,552
|
|
2021
|
|
72,507
|
|
|
2022
|
|
60,766
|
|
|
2023
|
|
48,812
|
|
|
2024
|
|
36,988
|
|
|
Thereafter
|
|
110,496
|
|
|
Total
|
|
$
|
413,121
|
|
Years Ended December 31,
|
|
Minimum Future Rents
|
||
2020
|
|
$
|
919
|
|
2021
|
|
412
|
|
|
2022
|
|
50
|
|
|
2023
|
|
4
|
|
|
Total undiscounted rental payments
|
|
1,385
|
|
|
Less imputed interest
|
|
54
|
|
|
Total lease liabilities
|
|
$
|
1,331
|
|
Years Ended December 31,
|
|
Minimum Future Rents
|
||
2019
|
|
$
|
81,149
|
|
2020
|
|
70,181
|
|
|
2021
|
|
59,550
|
|
|
2022
|
|
48,431
|
|
|
2023
|
|
37,327
|
|
|
Thereafter
|
|
122,102
|
|
|
Total
|
|
$
|
418,740
|
|
|
|
|
|
Payment due by period
|
||||||||||||||||
Lease Obligations
|
|
Total
|
|
Less than 1
year (2019) |
|
1 - 3 years
(2020 - 2021) |
|
3 - 5 years
(2022 - 2023) |
|
More than
5 years (after 2023) |
||||||||||
Operating Lease Obligations
|
|
185
|
|
|
85
|
|
|
100
|
|
|
—
|
|
|
—
|
|
|||||
Related Party Rent Lease Obligations
|
|
963
|
|
|
441
|
|
|
522
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
1,148
|
|
|
$
|
526
|
|
|
$
|
622
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
December 31,
|
||||||
Description
|
|
2019
|
|
2018
|
||||
Fixed rate notes
|
|
|
|
|
||||
$10.5 million, 4.85% Note, due September 24, 2020 (1)
|
|
$
|
9,260
|
|
|
$
|
9,500
|
|
$50.0 million, 1.75% plus 1.35% to 1.90% Note, due October 30, 2020 (2)
|
|
—
|
|
|
50,000
|
|
||
$50.0 million, 1.50% plus 1.35% to 1.90% Note, due January 29, 2021 (3)
|
|
—
|
|
|
50,000
|
|
||
$100.0 million, 1.73% plus 1.35% to 1.90% Note, due October 30, 2022 (4)
|
|
100,000
|
|
|
100,000
|
|
||
$165.0 million, 2.24% plus 1.35% to 1.90% Note, due January 31, 2024 (5)
|
|
165,000
|
|
|
—
|
|
||
$80.0 million, 3.72% Note, due June 1, 2027
|
|
80,000
|
|
|
80,000
|
|
||
$6.5 million 3.80% Note, due January 1, 2019
|
|
—
|
|
|
5,657
|
|
||
$19.0 million 4.15% Note, due December 1, 2024
|
|
19,000
|
|
|
19,000
|
|
||
$20.2 million 4.28% Note, due June 6, 2023
|
|
18,616
|
|
|
18,996
|
|
||
$14.0 million 4.34% Note, due September 11, 2024
|
|
13,482
|
|
|
13,718
|
|
||
$14.3 million 4.34% Note, due September 11, 2024
|
|
14,243
|
|
|
14,300
|
|
||
$15.1 million 4.99% Note, due January 6, 2024
|
|
14,409
|
|
|
14,643
|
|
||
$2.6 million 5.46% Note, due October 1, 2023
|
|
2,386
|
|
|
2,430
|
|
||
$50.0 million, 5.09% Note, due March 22, 2029
|
|
50,000
|
|
|
—
|
|
||
$50.0 million, 5.17% Note, due March 22, 2029
|
|
50,000
|
|
|
—
|
|
||
Floating rate notes
|
|
|
|
|
||||
Unsecured line of credit, LIBOR plus 1.40% to 1.90%, due January 31, 2023 (6)
|
|
109,500
|
|
|
241,200
|
|
||
Total notes payable principal
|
|
645,896
|
|
|
619,444
|
|
||
Less deferred financing costs, net of accumulated amortization
|
|
(1,197
|
)
|
|
(1,239
|
)
|
||
|
|
$
|
644,699
|
|
|
$
|
618,205
|
|
(1)
|
Promissory note includes an interest rate swap that fixed the interest rate at 3.55% for the duration of the term through September 24, 2018 and 4.85% beginning September 25, 2018 through September 24, 2020.
|
(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 4, 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 note includes an interest rate swap that fixed the LIBOR portion of the interest rate at an average rate of 2.24% for the duration of the term through January 31, 2024.
|
(6)
|
Unsecured line of credit includes certain Pillarstone Properties as of December 31, 2018, in determining the amount of credit available under the 2018 Facility which were released from collateral during 2019.
|
•
|
maximum total indebtedness to total asset value ratio of 0.60 to 1.00;
|
•
|
maximum secured debt to total asset value ratio of 0.40 to 1.00;
|
•
|
minimum EBITDA (earnings before interest, taxes, depreciation, amortization or extraordinary items) to fixed charges ratio of 1.50 to 1.00;
|
•
|
maximum other recourse debt to total asset value ratio of 0.15 to 1.00; and
|
•
|
maintenance of a minimum tangible net worth (adjusted for accumulated depreciation and amortization) of $372 million plus 75% of the net proceeds from additional equity offerings (as defined therein).
|
•
|
$250.0 million unsecured revolving credit facility with a maturity date of January 1, 2023 (the “2019 Revolver”);
|
•
|
$165.0 million unsecured term loan with a maturity date of January 31, 2024 (“Term Loan A”); and
|
•
|
$100.0 million unsecured term loan with a maturity date of October 30, 2022 (“Term Loan B” and together with Term Loan A, the “2019 Term Loans”).
|
•
|
maximum total indebtedness to total asset value ratio of 0.60 to 1.00;
|
•
|
maximum secured debt to total asset value ratio of 0.40 to 1.00;
|
•
|
minimum EBITDA (earnings before interest, taxes, depreciation, amortization or extraordinary items) to fixed charges ratio of 1.50 to 1.00;
|
•
|
maximum other recourse debt to total asset value ratio of 0.15 to 1.00; and
|
•
|
maintenance of a minimum tangible net worth (adjusted for accumulated depreciation and amortization) of $372 million plus 75% of the net proceeds from additional equity offerings (as defined therein).
|
•
|
extended the maturity date of the $300 million unsecured revolving credit facility under the 2014 Facility (the “2018 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 “2018 Term Loans”) to January 29, 2021 from November 7, 2019.
|
Year
|
|
Amount Due
|
||
2020
|
|
$
|
10,951
|
|
2021
|
|
1,611
|
|
|
2022
|
|
101,683
|
|
|
2023
|
|
137,363
|
|
|
2024
|
|
228,573
|
|
|
Thereafter
|
|
165,715
|
|
|
Total
|
|
$
|
645,896
|
|
|
|
|
|
Payment due by period (in thousands)
|
||||||||||||||||
Consolidated Contractual Obligations
|
|
Total
|
|
Less than 1
year (2020) |
|
1 - 3 years
(2021 - 2022) |
|
3 - 5 years
(2023 - 2024) |
|
More than
5 years (after 2024) |
||||||||||
Long-Term Debt - Principal
|
|
$
|
645,896
|
|
|
$
|
10,951
|
|
|
$
|
103,294
|
|
|
$
|
365,936
|
|
|
$
|
165,715
|
|
Long-Term Debt - Fixed Interest
|
|
107,674
|
|
|
21,742
|
|
|
41,975
|
|
|
26,746
|
|
|
17,211
|
|
|||||
Long-Term Debt - Variable Interest (1)
|
|
13,633
|
|
|
4,544
|
|
|
9,089
|
|
|
—
|
|
|
—
|
|
|||||
Unsecured credit facility - Unused commitment fee (2)
|
|
1,077
|
|
|
351
|
|
|
702
|
|
|
24
|
|
|
—
|
|
|||||
Operating Lease Obligations
|
|
212
|
|
|
126
|
|
|
82
|
|
|
4
|
|
|
—
|
|
|||||
Related Party Rent Lease Obligations
|
|
1,170
|
|
|
790
|
|
|
380
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
769,662
|
|
|
$
|
38,504
|
|
|
$
|
155,522
|
|
|
$
|
392,710
|
|
|
$
|
182,926
|
|
(1)
|
As of December 31, 2019, we had one loan totaling $109.5 million which bore interest at a floating rate. The variable interest rate payments are based on LIBOR plus 1.40% to LIBOR plus 1.90%, which reflects our new interest rates under the 2019 Facility. The information in the table above reflects our projected interest rate obligations for the floating rate payments based on one-month LIBOR as of December 31, 2019, of 1.76%.
|
(2)
|
The unused commitment fees on the 2019 Facility, payable quarterly, are based on the average daily unused amount of the 2019 Facility. The fees are 0.20% for facility usage greater than 50% or 0.25% for facility usage less than 50%. The information in the table above reflects our projected obligations for the 2019 Facility based on our December 31, 2019 balance of $374.5 million.
|
|
|
December 31, 2019
|
|||
Balance Sheet Location
|
|
Estimated Fair Value
|
|||
Prepaid expenses and other assets
|
|
|
$
|
59
|
|
Accounts payable and accrued expenses
|
|
|
$
|
(5,660
|
)
|
|
|
December 31, 2018
|
|||
Balance Sheet Location
|
|
Estimated Fair Value
|
|||
Prepaid expenses and other assets
|
|
|
$
|
4,286
|
|
Accounts payable and accrued expenses
|
|
|
$
|
(59
|
)
|
|
|
Amount Recognized as Comprehensive Income (Loss)
|
|
Location of Income (Loss) Recognized in Earnings
|
|
Amount of Income (Loss) Recognized in Earnings (1)
|
||||
Year ended December 31, 2019
|
|
$
|
(9,828
|
)
|
|
Interest expense
|
|
$
|
1,036
|
|
Year ended December 31, 2018
|
|
$
|
1,192
|
|
|
Interest expense
|
|
$
|
646
|
|
Year ended December 31, 2017
|
|
$
|
2,022
|
|
|
Interest expense
|
|
$
|
(1,575
|
)
|
(1)
|
There was no ineffective portion of our interest rate swaps recognized in earnings for the years ended December 31, 2019, 2018 and 2017.
|
|
|
Year Ended
|
||||||||||
|
|
December 31,
|
||||||||||
(in thousands, except per share data)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Numerator:
|
|
|
|
|
|
|
||||||
Income from continuing operations
|
|
$
|
23,634
|
|
|
$
|
21,981
|
|
|
$
|
8,588
|
|
Less: Net income attributable to noncontrolling interests
|
|
(511
|
)
|
|
(550
|
)
|
|
(254
|
)
|
|||
Distributions paid on unvested restricted shares
|
|
(41
|
)
|
|
(301
|
)
|
|
(456
|
)
|
|||
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares
|
|
23,082
|
|
|
21,130
|
|
|
7,878
|
|
|||
Income from discontinued operations
|
|
594
|
|
|
—
|
|
|
—
|
|
|||
Less: Net income attributable to noncontrolling interests
|
|
(34
|
)
|
|
—
|
|
|
—
|
|
|||
Income from discontinued operations attributable to Whitestone REIT
|
|
560
|
|
|
—
|
|
|
—
|
|
|||
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares
|
|
$
|
23,642
|
|
|
$
|
21,130
|
|
|
$
|
7,878
|
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
|
||||||
Weighted average number of common shares - basic
|
|
40,184
|
|
|
39,274
|
|
|
35,428
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
|
||||||
Unvested restricted shares
|
|
1,278
|
|
|
1,338
|
|
|
827
|
|
|||
Weighted average number of common shares - dilutive
|
|
41,462
|
|
|
40,612
|
|
|
36,255
|
|
|||
|
|
|
|
|
|
|
||||||
Earnings Per Share:
|
|
|
|
|
|
|
||||||
Basic:
|
|
|
|
|
|
|
||||||
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares
|
|
$
|
0.57
|
|
|
$
|
0.54
|
|
|
$
|
0.22
|
|
Income from discontinued operations attributable to Whitestone REIT
|
|
0.02
|
|
|
0.00
|
|
|
0.00
|
|
|||
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares
|
|
$
|
0.59
|
|
|
$
|
0.54
|
|
|
$
|
0.22
|
|
Diluted:
|
|
|
|
|
|
|
||||||
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares
|
|
$
|
0.56
|
|
|
$
|
0.52
|
|
|
$
|
0.22
|
|
Income from discontinued operations attributable to Whitestone REIT
|
|
0.01
|
|
|
0.00
|
|
|
0.00
|
|
|||
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares
|
|
$
|
0.57
|
|
|
$
|
0.52
|
|
|
$
|
0.22
|
|
|
|
2019
|
|
2018
|
|
2017
|
|||
Ordinary income (unaudited)
|
|
28.6
|
%
|
|
39.1
|
%
|
|
15.3
|
%
|
Return of capital (unaudited)
|
|
19.4
|
%
|
|
26.5
|
%
|
|
84.7
|
%
|
Capital gain distributions (unaudited)
|
|
52.0
|
%
|
|
34.4
|
%
|
|
—
|
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
||||
|
|
Location of Revenue (Expense)
|
|
2019
|
|
2018
|
||||
Rent
|
|
Operating and maintenance
|
|
$
|
(813
|
)
|
|
$
|
(779
|
)
|
Property management fee income
|
|
Management, transaction, and other fees
|
|
$
|
856
|
|
|
$
|
1,008
|
|
Interest income
|
|
Interest, dividend and other investment income
|
|
$
|
171
|
|
|
$
|
582
|
|
|
|
Common Shares
|
|
Noncontrolling OP Unit Holders
|
|
Total
|
||||||||||||||
Quarter Paid
|
|
Distribution Per Common Share
|
|
Total Amount Paid
|
|
Distribution Per OP Unit
|
|
Total Amount Paid
|
|
Total Amount Paid
|
||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fourth Quarter
|
|
$
|
0.2850
|
|
|
$
|
11,580
|
|
|
$
|
0.2850
|
|
|
$
|
262
|
|
|
$
|
11,842
|
|
Third Quarter
|
|
0.2850
|
|
|
11,430
|
|
|
0.2850
|
|
|
264
|
|
|
11,694
|
|
|||||
Second Quarter
|
|
0.2850
|
|
|
11,316
|
|
|
0.2850
|
|
|
265
|
|
|
11,581
|
|
|||||
First Quarter
|
|
0.2850
|
|
|
11,301
|
|
|
0.2850
|
|
|
264
|
|
|
11,565
|
|
|||||
Total
|
|
$
|
1.1400
|
|
|
$
|
45,627
|
|
|
$
|
1.1400
|
|
|
$
|
1,055
|
|
|
$
|
46,682
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fourth Quarter
|
|
$
|
0.2850
|
|
|
$
|
11,302
|
|
|
$
|
0.2850
|
|
|
$
|
265
|
|
|
$
|
11,567
|
|
Third Quarter
|
|
0.2850
|
|
|
11,294
|
|
|
0.2850
|
|
|
286
|
|
|
11,580
|
|
|||||
Second Quarter
|
|
0.2850
|
|
|
11,203
|
|
|
0.2850
|
|
|
295
|
|
|
11,498
|
|
|||||
First Quarter
|
|
0.2850
|
|
|
11,145
|
|
|
0.2850
|
|
|
309
|
|
|
11,454
|
|
|||||
Total
|
|
$
|
1.1400
|
|
|
$
|
44,944
|
|
|
$
|
1.1400
|
|
|
$
|
1,155
|
|
|
$
|
46,099
|
|
|
|
Shares
|
|
Weighted-Average
Grant Date
Fair Value (1)
|
|||
Non-vested at January 1, 2019
|
|
1,923,382
|
|
|
$
|
12.41
|
|
Granted
|
|
762,630
|
|
|
9.46
|
|
|
Vested
|
|
(284,964
|
)
|
|
11.76
|
|
|
Forfeited
|
|
(61,116
|
)
|
|
12.62
|
|
|
Non-vested at December 31, 2019
|
|
2,339,932
|
|
|
$
|
11.52
|
|
Available for grant at December 31, 2019
|
|
1,792,528
|
|
|
|
(1)
|
The fair value of the shares granted were determined based on observable market transactions occurring near the date of the grants.
|
|
|
Shares Granted
|
|
Shares Vested
|
||||||||||
Year Ended
|
|
Non-Vested Shares Issued
|
|
Weighted-Average Grant-Date Fair Value
|
|
Vested Shares
|
|
Total Vest-Date Fair Value
|
||||||
|
|
|
|
|
|
|
|
(in thousands)
|
||||||
Year Ended December 31, 2019
|
|
762,630
|
|
|
$
|
9.46
|
|
|
(284,964
|
)
|
|
$
|
3,352
|
|
Year Ended December 31, 2018
|
|
653,472
|
|
|
$
|
11.07
|
|
|
(560,126
|
)
|
|
$
|
7,978
|
|
Year Ended December 31, 2017
|
|
1,354,534
|
|
|
$
|
12.92
|
|
|
(881,710
|
)
|
|
$
|
12,829
|
|
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues
|
|
$
|
29,694
|
|
|
$
|
29,578
|
|
|
$
|
29,879
|
|
|
$
|
30,100
|
|
Net income
|
|
$
|
2,839
|
|
|
$
|
3,404
|
|
|
$
|
1,849
|
|
|
$
|
16,136
|
|
Net income attributable to Whitestone REIT
|
|
$
|
2,774
|
|
|
$
|
3,327
|
|
|
$
|
1,807
|
|
|
$
|
15,776
|
|
Basic Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income from continuing operations attributable to Whitestone REIT, excluding amounts attributable to unvested restricted shares(1)
|
|
$
|
0.07
|
|
|
$
|
0.06
|
|
|
$
|
0.04
|
|
|
$
|
0.39
|
|
Income from discontinued operations attributable to Whitestone REIT(1)
|
|
0.00
|
|
|
0.02
|
|
|
0.00
|
|
|
0.00
|
|
||||
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares(1)
|
|
$
|
0.07
|
|
|
$
|
0.08
|
|
|
$
|
0.04
|
|
|
$
|
0.39
|
|
Diluted Earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations attributable to Whitestone REIT, excluding amounts attributable to unvested restricted shares(1)
|
|
$
|
0.07
|
|
|
$
|
0.06
|
|
|
$
|
0.04
|
|
|
$
|
0.38
|
|
Income from discontinued operations attributable to Whitestone REIT(1)
|
|
0.00
|
|
|
0.02
|
|
|
0.00
|
|
|
(0.01
|
)
|
||||
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares(1)
|
|
$
|
0.07
|
|
|
$
|
0.08
|
|
|
$
|
0.04
|
|
|
$
|
0.37
|
|
|
|
|
|
|
|
|
|
|
||||||||
2018
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
$
|
29,785
|
|
|
$
|
29,473
|
|
|
$
|
30,704
|
|
|
$
|
29,901
|
|
Net income
|
|
$
|
3,269
|
|
|
$
|
2,005
|
|
|
$
|
8,033
|
|
|
$
|
8,674
|
|
Net income attributable to Whitestone REIT
|
|
$
|
3,181
|
|
|
$
|
1,954
|
|
|
$
|
7,835
|
|
|
$
|
8,457
|
|
Basic Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares (1)
|
|
$
|
0.08
|
|
|
$
|
0.05
|
|
|
$
|
0.20
|
|
|
$
|
0.21
|
|
Diluted Earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares (1)
|
|
$
|
0.08
|
|
|
$
|
0.05
|
|
|
$
|
0.19
|
|
|
$
|
0.21
|
|
(1)
|
The sum of individual quarterly basic and diluted earnings per share amounts may not agree with the year-to-date basic and diluted earning per share amounts as the result of each period’s computation being based on the weighted average number of common shares outstanding during that period.
|
|
|
(in thousands)
|
||||||||||||||
|
|
Balance at
|
|
|
|
Deductions
|
|
Balance at
|
||||||||
|
|
Beginning
|
|
|
|
from
|
|
End of
|
||||||||
Description
|
|
of Year
|
|
Charges(1)
|
|
Reserves
|
|
Year
|
||||||||
Allowance for doubtful accounts:
|
|
|
|
|
|
|
|
|
||||||||
Year ended December 31, 2019
|
|
$
|
9,746
|
|
|
$
|
1,484
|
|
|
$
|
(57
|
)
|
|
$
|
11,173
|
|
Year ended December 31, 2018
|
|
8,608
|
|
|
1,391
|
|
|
(253
|
)
|
|
9,746
|
|
||||
Year ended December 31, 2017
|
|
7,133
|
|
|
2,340
|
|
|
(865
|
)
|
|
8,608
|
|
|
|
|
|
|
|
Costs Capitalized Subsequent
|
|
Gross Amount at which Carried at
|
||||||||||||||||||||
|
|
Initial Cost (in thousands)
|
|
to Acquisition (in thousands)
|
|
End of Period (in thousands)(1) (2)
|
||||||||||||||||||||||
|
|
|
|
Building and
|
|
Improvements
|
|
Carrying
|
|
|
|
Building and
|
|
|
||||||||||||||
Property Name
|
|
Land
|
|
Improvements
|
|
(net)
|
|
Costs
|
|
Land
|
|
Improvements
|
|
Total
|
||||||||||||||
Whitestone Properties:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Ahwatukee Plaza
|
|
$
|
5,126
|
|
|
$
|
4,086
|
|
|
$
|
365
|
|
|
$
|
—
|
|
|
$
|
5,126
|
|
|
$
|
4,451
|
|
|
$
|
9,577
|
|
Anthem Marketplace
|
|
4,790
|
|
|
17,973
|
|
|
1,722
|
|
|
—
|
|
|
4,790
|
|
|
19,695
|
|
|
24,485
|
|
|||||||
Anthem Marketplace Phase II
|
|
204
|
|
|
—
|
|
|
492
|
|
|
—
|
|
|
204
|
|
|
492
|
|
|
696
|
|
|||||||
Bissonnet Beltway
|
|
415
|
|
|
1,947
|
|
|
484
|
|
|
—
|
|
|
415
|
|
|
2,431
|
|
|
2,846
|
|
|||||||
BLVD Place
|
|
63,893
|
|
|
90,942
|
|
|
1,507
|
|
|
—
|
|
|
63,893
|
|
|
92,449
|
|
|
156,342
|
|
|||||||
The Citadel
|
|
472
|
|
|
1,777
|
|
|
2,900
|
|
|
—
|
|
|
472
|
|
|
4,677
|
|
|
5,149
|
|
|||||||
City View Village
|
|
2,044
|
|
|
4,149
|
|
|
108
|
|
|
—
|
|
|
2,044
|
|
|
4,257
|
|
|
6,301
|
|
|||||||
Davenport Village
|
|
11,367
|
|
|
34,101
|
|
|
1,279
|
|
|
—
|
|
|
11,367
|
|
|
35,380
|
|
|
46,747
|
|
|||||||
Desert Canyon
|
|
1,976
|
|
|
1,704
|
|
|
2,566
|
|
|
—
|
|
|
1,976
|
|
|
4,270
|
|
|
6,246
|
|
|||||||
Eldorado Plaza
|
|
16,551
|
|
|
30,746
|
|
|
250
|
|
|
—
|
|
|
16,551
|
|
|
30,996
|
|
|
47,547
|
|
|||||||
Fountain Hills Plaza
|
|
5,113
|
|
|
15,340
|
|
|
255
|
|
|
—
|
|
|
5,113
|
|
|
15,595
|
|
|
20,708
|
|
|||||||
Fountain Square
|
|
5,573
|
|
|
9,828
|
|
|
2,327
|
|
|
—
|
|
|
5,573
|
|
|
12,155
|
|
|
17,728
|
|
|||||||
Fulton Ranch Towne Center
|
|
7,604
|
|
|
22,612
|
|
|
2,515
|
|
|
—
|
|
|
7,604
|
|
|
25,127
|
|
|
32,731
|
|
|||||||
Gilbert Tuscany Village
|
|
1,767
|
|
|
3,233
|
|
|
1,599
|
|
|
—
|
|
|
1,767
|
|
|
4,832
|
|
|
6,599
|
|
|||||||
Gilbert Tuscany Village Hard Corner
|
|
856
|
|
|
794
|
|
|
169
|
|
|
—
|
|
|
856
|
|
|
963
|
|
|
1,819
|
|
|||||||
Heritage Trace Plaza
|
|
6,209
|
|
|
13,821
|
|
|
622
|
|
|
—
|
|
|
6,209
|
|
|
14,443
|
|
|
20,652
|
|
|||||||
Headquarters Village
|
|
7,171
|
|
|
18,439
|
|
|
1,363
|
|
|
—
|
|
|
7,171
|
|
|
19,802
|
|
|
26,973
|
|
|||||||
Keller Place
|
|
5,977
|
|
|
7,577
|
|
|
790
|
|
|
—
|
|
|
5,977
|
|
|
8,367
|
|
|
14,344
|
|
|||||||
Kempwood Plaza
|
|
733
|
|
|
1,798
|
|
|
2,076
|
|
|
—
|
|
|
733
|
|
|
3,874
|
|
|
4,607
|
|
|||||||
La Mirada
|
|
12,853
|
|
|
24,464
|
|
|
1,166
|
|
|
—
|
|
|
12,853
|
|
|
25,630
|
|
|
38,483
|
|
|||||||
Las Colinas Village
|
|
16,706
|
|
|
18,098
|
|
|
(167
|
)
|
|
—
|
|
|
16,706
|
|
|
17,931
|
|
|
34,637
|
|
|||||||
Lion Square
|
|
1,546
|
|
|
4,289
|
|
|
4,573
|
|
|
—
|
|
|
1,546
|
|
|
8,862
|
|
|
10,408
|
|
|||||||
The Marketplace at Central
|
|
1,305
|
|
|
5,324
|
|
|
1,337
|
|
|
—
|
|
|
1,305
|
|
|
6,661
|
|
|
7,966
|
|
|||||||
Market Street at DC Ranch
|
|
9,710
|
|
|
26,779
|
|
|
6,786
|
|
|
—
|
|
|
9,710
|
|
|
33,565
|
|
|
43,275
|
|
|||||||
Mercado at Scottsdale Ranch
|
|
8,728
|
|
|
12,560
|
|
|
1,553
|
|
|
—
|
|
|
8,728
|
|
|
14,113
|
|
|
22,841
|
|
|||||||
Paradise Plaza
|
|
6,155
|
|
|
10,221
|
|
|
1,356
|
|
|
—
|
|
|
6,155
|
|
|
11,577
|
|
|
17,732
|
|
|||||||
Parkside Village North
|
|
3,877
|
|
|
8,629
|
|
|
199
|
|
|
—
|
|
|
3,877
|
|
|
8,828
|
|
|
12,705
|
|
|||||||
Parkside Village South
|
|
5,562
|
|
|
27,154
|
|
|
424
|
|
|
—
|
|
|
5,562
|
|
|
27,578
|
|
|
33,140
|
|
|||||||
Pima Norte
|
|
1,086
|
|
|
7,162
|
|
|
2,748
|
|
|
—
|
|
|
1,086
|
|
|
9,910
|
|
|
10,996
|
|
|||||||
Pinnacle of Scottsdale
|
|
6,648
|
|
|
22,466
|
|
|
1,885
|
|
|
—
|
|
|
6,648
|
|
|
24,351
|
|
|
30,999
|
|
|||||||
Pinnacle of Scottsdale Phase II
|
|
883
|
|
|
4,659
|
|
|
2,722
|
|
|
—
|
|
|
883
|
|
|
7,381
|
|
|
8,264
|
|
|||||||
The Promenade at Fulton Ranch
|
|
5,198
|
|
|
13,367
|
|
|
681
|
|
|
—
|
|
|
5,198
|
|
|
14,048
|
|
|
19,246
|
|
|||||||
Providence
|
|
918
|
|
|
3,675
|
|
|
2,931
|
|
|
—
|
|
|
918
|
|
|
6,606
|
|
|
7,524
|
|
|||||||
Quinlan Crossing
|
|
9,561
|
|
|
28,683
|
|
|
732
|
|
|
—
|
|
|
9,561
|
|
|
29,415
|
|
|
38,976
|
|
|||||||
Seville
|
|
6,913
|
|
|
25,518
|
|
|
637
|
|
|
—
|
|
|
6,913
|
|
|
26,155
|
|
|
33,068
|
|
|||||||
Shaver
|
|
184
|
|
|
633
|
|
|
101
|
|
|
—
|
|
|
184
|
|
|
734
|
|
|
918
|
|
|||||||
Shops at Pecos Ranch
|
|
3,781
|
|
|
15,123
|
|
|
792
|
|
|
—
|
|
|
3,781
|
|
|
15,915
|
|
|
19,696
|
|
|||||||
Shops at Starwood
|
|
4,093
|
|
|
11,487
|
|
|
529
|
|
|
—
|
|
|
4,093
|
|
|
12,016
|
|
|
16,109
|
|
|||||||
Shops at Starwood Phase III
|
|
1,818
|
|
|
7,069
|
|
|
2,168
|
|
|
1,153
|
|
|
1,818
|
|
|
10,390
|
|
|
12,208
|
|
|||||||
The Shops at Williams Trace
|
|
5,920
|
|
|
14,297
|
|
|
759
|
|
|
—
|
|
|
5,920
|
|
|
15,056
|
|
|
20,976
|
|
|||||||
South Richey
|
|
778
|
|
|
2,584
|
|
|
1,960
|
|
|
—
|
|
|
778
|
|
|
4,544
|
|
|
5,322
|
|
|||||||
Spoerlein Commons
|
|
2,340
|
|
|
7,296
|
|
|
940
|
|
|
—
|
|
|
2,340
|
|
|
8,236
|
|
|
10,576
|
|
|||||||
The Strand at Huebner Oaks
|
|
5,805
|
|
|
12,335
|
|
|
817
|
|
|
—
|
|
|
5,805
|
|
|
13,152
|
|
|
18,957
|
|
|||||||
SugarPark Plaza
|
|
1,781
|
|
|
7,125
|
|
|
1,337
|
|
|
—
|
|
|
1,781
|
|
|
8,462
|
|
|
10,243
|
|
|||||||
Sunridge
|
|
276
|
|
|
1,186
|
|
|
532
|
|
|
—
|
|
|
276
|
|
|
1,718
|
|
|
1,994
|
|
|||||||
Sunset at Pinnacle Peak
|
|
3,610
|
|
|
2,734
|
|
|
756
|
|
|
—
|
|
|
3,610
|
|
|
3,490
|
|
|
7,100
|
|
|||||||
Terravita Marketplace
|
|
7,171
|
|
|
9,392
|
|
|
1,086
|
|
|
—
|
|
|
7,171
|
|
|
10,478
|
|
|
17,649
|
|
|||||||
Town Park
|
|
850
|
|
|
2,911
|
|
|
450
|
|
|
—
|
|
|
850
|
|
|
3,361
|
|
|
4,211
|
|
|
|
|
|
|
|
Costs Capitalized Subsequent
|
|
Gross Amount at which Carried at
|
||||||||||||||||||||
|
|
Initial Cost (in thousands)
|
|
to Acquisition (in thousands)
|
|
End of Period (in thousands)(1) (2)
|
||||||||||||||||||||||
|
|
|
|
Building and
|
|
Improvements
|
|
Carrying
|
|
|
|
Building and
|
|
|
||||||||||||||
Property Name
|
|
Land
|
|
Improvements
|
|
(net)
|
|
Costs
|
|
Land
|
|
Improvements
|
|
Total
|
||||||||||||||
Village Square at Dana Park
|
|
10,877
|
|
|
40,250
|
|
|
3,804
|
|
|
—
|
|
|
10,877
|
|
|
44,054
|
|
|
54,931
|
|
|||||||
Westchase
|
|
423
|
|
|
1,751
|
|
|
3,281
|
|
|
—
|
|
|
423
|
|
|
5,032
|
|
|
5,455
|
|
|||||||
Williams Trace Plaza
|
|
6,800
|
|
|
14,003
|
|
|
1,696
|
|
|
—
|
|
|
6,800
|
|
|
15,699
|
|
|
22,499
|
|
|||||||
Windsor Park
|
|
2,621
|
|
|
10,482
|
|
|
8,592
|
|
|
—
|
|
|
2,621
|
|
|
19,074
|
|
|
21,695
|
|
|||||||
Woodlake Plaza
|
|
1,107
|
|
|
4,426
|
|
|
3,125
|
|
|
—
|
|
|
1,107
|
|
|
7,551
|
|
|
8,658
|
|
|||||||
Total Whitestone Properties
|
|
$
|
305,725
|
|
|
$
|
688,999
|
|
|
$
|
85,677
|
|
|
$
|
1,153
|
|
|
$
|
305,725
|
|
|
$
|
775,829
|
|
|
$
|
1,081,554
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Land Held for Development:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
BLVD Place Phase II-B
|
|
10,500
|
|
|
—
|
|
|
15
|
|
|
1,939
|
|
|
10,500
|
|
|
1,954
|
|
|
12,454
|
|
|||||||
Dana Park Development
|
|
4,000
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
4,000
|
|
|
25
|
|
|
4,025
|
|
|||||||
Eldorado Plaza Development
|
|
911
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
911
|
|
|
30
|
|
|
941
|
|
|||||||
Fountain Hills
|
|
277
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
277
|
|
|
—
|
|
|
277
|
|
|||||||
Market Street at DC Ranch
|
|
704
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
704
|
|
|
—
|
|
|
704
|
|
|||||||
Total - Land Held for Development
|
|
$
|
16,392
|
|
|
$
|
—
|
|
|
$
|
70
|
|
|
$
|
1,939
|
|
|
$
|
16,392
|
|
|
$
|
2,009
|
|
|
$
|
18,401
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Grand Totals - Whitestone Properties
|
|
$
|
322,117
|
|
|
$
|
688,999
|
|
|
$
|
85,747
|
|
|
$
|
3,092
|
|
|
$
|
322,117
|
|
|
$
|
777,838
|
|
|
$
|
1,099,955
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated Depreciation
|
|
Date of
|
|
Date
|
|
Depreciation
|
||
Property Name
|
|
Encumbrances
|
|
(in thousands)
|
|
Construction
|
|
Acquired
|
|
Life
|
||
Whitestone Properties:
|
|
|
|
|
|
|
|
|
|
|
||
Ahwatukee Plaza
|
|
|
|
$
|
943
|
|
|
|
|
8/16/2011
|
|
5-39 years
|
Anthem Marketplace
|
|
(3)
|
|
3,206
|
|
|
|
|
6/28/2013
|
|
5-39 years
|
|
Anthem Marketplace Phase II
|
|
|
|
9
|
|
|
3/1/2019
|
|
|
|
5-39 years
|
|
Bissonnet Beltway
|
|
|
|
1,958
|
|
|
|
|
1/1/1999
|
|
5-39 years
|
|
BLVD Place
|
|
(4)
|
|
6,245
|
|
|
|
|
5/26/2017
|
|
5-39 years
|
|
The Citadel
|
|
|
|
2,042
|
|
|
|
|
9/28/2010
|
|
5-39 years
|
|
City View Village
|
|
|
|
537
|
|
|
|
|
3/31/2015
|
|
5-39 years
|
|
Davenport Village
|
|
|
|
4,548
|
|
|
|
|
5/27/2015
|
|
5-39 years
|
|
Desert Canyon
|
|
|
|
802
|
|
|
|
|
4/13/2011
|
|
5-39 years
|
|
Eldorado Plaza
|
|
|
|
2,091
|
|
|
|
|
5/3/2017
|
|
5-39 years
|
|
Fountain Hills Plaza
|
|
|
|
2,589
|
|
|
|
|
10/7/2013
|
|
5-39 years
|
|
Fountain Square
|
|
|
|
2,758
|
|
|
|
|
9/21/2012
|
|
5-39 years
|
|
Fulton Ranch Towne Center
|
|
|
|
3,259
|
|
|
|
|
11/5/2014
|
|
5-39 years
|
|
Gilbert Tuscany Village
|
|
|
|
1,762
|
|
|
|
|
6/28/2011
|
|
5-39 years
|
|
Gilbert Tuscany Village Hard Corner
|
|
|
|
128
|
|
|
|
|
8/28/2015
|
|
5-39 years
|
|
Heritage Trace Plaza
|
|
|
|
2,152
|
|
|
|
|
7/1/2014
|
|
5-39 years
|
|
Headquarters Village
|
|
(5)
|
|
3,699
|
|
|
|
|
3/28/2013
|
|
5-39 years
|
|
Keller Place
|
|
|
|
964
|
|
|
|
|
8/26/2015
|
|
5-39 years
|
|
Kempwood Plaza
|
|
|
|
1,808
|
|
|
|
|
2/2/1999
|
|
5-39 years
|
|
La Mirada
|
|
|
|
2,264
|
|
|
|
|
9/30/2016
|
|
5-39 years
|
|
Las Colinas Village
|
|
|
|
39
|
|
|
|
|
12/6/2019
|
|
5-39 years
|
|
Lion Square
|
|
|
|
5,235
|
|
|
|
|
1/1/2000
|
|
5-39 years
|
|
The Marketplace at Central
|
|
|
|
1,956
|
|
|
|
|
11/1/2010
|
|
5-39 years
|
|
Market Street at DC Ranch
|
|
|
|
6,932
|
|
|
|
|
12/5/2013
|
|
5-39 years
|
|
Mercado at Scottsdale Ranch
|
|
|
|
2,602
|
|
|
|
|
6/19/2013
|
|
5-39 years
|
|
Paradise Plaza
|
|
|
|
2,517
|
|
|
|
|
8/8/2012
|
|
5-39 years
|
|
Parkside Village North
|
|
|
|
1,068
|
|
|
|
|
7/2/2015
|
|
5-39 years
|
|
Parkside Village South
|
|
|
|
3,195
|
|
|
|
|
7/2/2015
|
|
5-39 years
|
|
Pima Norte
|
|
|
|
3,166
|
|
|
|
|
10/4/2007
|
|
5-39 years
|
|
Pinnacle of Scottsdale
|
|
(6)
|
|
5,391
|
|
|
|
|
12/22/2011
|
|
5-39 years
|
|
Pinnacle of Scottsdale Phase II
|
|
|
|
934
|
|
|
3/31/2017
|
|
|
|
5-39 years
|
|
The Promenade at Fulton Ranch
|
|
|
|
1,951
|
|
|
|
|
11/5/2014
|
|
5-39 years
|
|
Providence
|
|
|
|
2,510
|
|
|
|
|
3/30/2001
|
|
5-39 years
|
|
Quinlan Crossing
|
|
|
|
3,366
|
|
|
|
|
8/26/2015
|
|
5-39 years
|
|
Seville
|
|
|
|
2,245
|
|
|
|
|
9/30/2016
|
|
5-39 years
|
|
Shaver
|
|
|
|
389
|
|
|
|
|
12/17/1999
|
|
5-39 years
|
|
Shops at Pecos Ranch
|
|
(7)
|
|
3,074
|
|
|
|
|
12/28/2012
|
|
5-39 years
|
|
Shops at Starwood
|
|
(8)
|
|
2,568
|
|
|
|
|
12/28/2011
|
|
5-39 years
|
|
Shops at Starwood Phase III
|
|
|
|
1,121
|
|
|
12/31/2016
|
|
|
|
5-39 years
|
|
The Shops at Williams Trace
|
|
|
|
2,027
|
|
|
|
|
12/24/2014
|
|
5-39 years
|
|
South Richey
|
|
|
|
2,572
|
|
|
|
|
8/25/1999
|
|
5-39 years
|
|
Spoerlein Commons
|
|
|
|
2,391
|
|
|
|
|
1/16/2009
|
|
5-39 years
|
|
The Strand at Huebner Oaks
|
|
|
|
1,854
|
|
|
|
|
9/19/2014
|
|
5-39 years
|
|
SugarPark Plaza
|
|
|
|
3,265
|
|
|
|
|
9/8/2004
|
|
5-39 years
|
|
Sunridge
|
|
|
|
889
|
|
|
|
|
1/1/2002
|
|
5-39 years
|
|
Sunset at Pinnacle Peak
|
|
|
|
882
|
|
|
|
|
5/29/2012
|
|
5-39 years
|
|
Terravita Marketplace
|
|
(9)
|
|
2,389
|
|
|
|
|
8/8/2011
|
|
5-39 years
|
|
Town Park
|
|
|
|
2,225
|
|
|
|
|
1/1/1999
|
|
5-39 years
|
|
|
|
|
Accumulated Depreciation
|
|
Date of
|
|
Date
|
|
Depreciation
|
||
Property Name
|
|
Encumbrances
|
|
(in thousands)
|
|
Construction
|
|
Acquired
|
|
Life
|
||
Village Square at Dana Park
|
|
(10)
|
|
8,776
|
|
|
|
|
9/21/2012
|
|
5-39 years
|
|
Westchase
|
|
|
|
2,365
|
|
|
|
|
1/1/2002
|
|
5-39 years
|
|
Williams Trace Plaza
|
|
|
|
1,937
|
|
|
|
|
12/24/2014
|
|
5-39 years
|
|
Windsor Park
|
|
|
|
9,419
|
|
|
|
|
12/16/2003
|
|
5-39 years
|
|
Woodlake Plaza
|
|
|
|
2,919
|
|
|
|
|
3/14/2005
|
|
5-39 years
|
|
|
|
|
|
$
|
137,933
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Land Held for Development:
|
|
|
|
|
|
|
|
|
|
|
||
BLVD Place Phase II-B
|
|
|
|
—
|
|
|
|
|
5/26/2017
|
|
Land - Not Depreciated
|
|
Dana Park Development
|
|
|
|
—
|
|
|
|
|
9/21/2012
|
|
Land - Not Depreciated
|
|
Eldorado Plaza Development
|
|
|
|
—
|
|
|
|
|
12/29/2017
|
|
Land - Not Depreciated
|
|
Fountain Hills
|
|
|
|
—
|
|
|
|
|
10/7/2013
|
|
Land - Not Depreciated
|
|
Market Street at DC Ranch
|
|
|
|
—
|
|
|
|
|
12/5/2013
|
|
Land - Not Depreciated
|
|
Total - Land Held For Development
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Grand Totals - Whitestone Properties
|
|
|
|
$
|
137,933
|
|
|
|
|
|
|
|
(1)
|
Reconciliations of total real estate carrying value for the three years ended December 31, follows (in thousands):
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Balance at beginning of period
|
|
$
|
1,052,238
|
|
|
$
|
1,149,454
|
|
|
$
|
920,310
|
|
Cumulative effect of accounting change for adoption of ASU 2017-05.
|
|
—
|
|
|
(95,146
|
)
|
|
—
|
|
|||
Additions during the period:
|
|
|
|
|
|
|
|
|
|
|||
Acquisitions
|
|
34,804
|
|
|
—
|
|
|
213,545
|
|
|||
Improvements
|
|
13,474
|
|
|
11,638
|
|
|
17,575
|
|
|||
|
|
48,278
|
|
|
(83,508
|
)
|
|
231,120
|
|
|||
Deductions - cost of real estate sold or retired
|
|
(561
|
)
|
|
(13,708
|
)
|
|
(1,976
|
)
|
|||
Balance at close of period
|
|
$
|
1,099,955
|
|
|
$
|
1,052,238
|
|
|
$
|
1,149,454
|
|
(2)
|
The aggregate cost of real estate for federal income tax purposes is $1,100,000.
|
(3)
|
This property secures a $15.1 million mortgage note.
|
(4)
|
This property secures a $80.0 million mortgage note.
|
(5)
|
This property secures a $19.0 million mortgage note.
|
(6)
|
This property secures a $14.1 million mortgage note.
|
(7)
|
This property secures a $14.0 million mortgage note.
|
(8)
|
This property secures a $14.3 million mortgage note.
|
(9)
|
This property secures a $10.5 million mortgage note.
|
(10)
|
A portions of this property secures a $2.6 million mortgage note.
|
Trustee
|
Class
|
Year in Which Term to Expire
|
Paul T. Lambert
|
I
|
2022
|
David F. Taylor
|
I
|
2022
|
Donald F. Keating
|
II
|
2020
|
Najeeb A. Khan
|
II
|
2020
|
Nandita V. Berry
|
III
|
2021
|
Jack L. Mahaffey
|
III
|
2021
|
James C. Mastandrea
|
III
|
2021
|
|
||
|
|
|
ATTEST:
|
|
WHITESTONE REIT
|
|
|
|
By: /s/ John J. Dee
|
|
By: /s/ James C. Mastandrea (SEAL)
|
Name: John J. Dee
|
|
Name: James C. Mastandrea
|
Title: Secretary
|
|
Title: Chairman and Chief Executive Officer
|
NAME OF SUBSIDIARY
|
JURISDICTION OF FORMATION
|
Whitestone REIT Operating Partnership, LP
|
Delaware
|
Pillarstone Capital REIT Operating Partnership LP
|
Delaware
|
Whitestone Centers LLC
|
Texas
|
Whitestone REIT Operating Partnership III GP, LLC
|
Texas
|
Whitestone REIT Operating Partnership III LP, LTD
|
Texas
|
Whitestone REIT Operating Partnership III LP
|
Texas
|
Whitestone REIT Operating Company IV, LLC
|
Texas
|
Whitestone Pima Norte LLC
|
Texas
|
Whitestone Corporate Park West LLC
|
Texas
|
Whitestone Retail Services, L.L.C.
|
Delaware
|
Whitestone Brokerage Services, L.L.C.
|
Texas
|
Whitestone SunnySlope Village, L.L.C.
|
Delaware
|
Whitestone Featherwood, LLC
|
Texas
|
Whitestone Terravita Marketplace, LLC
|
Delaware
|
Whitestone Ahwatukee Plaza, LLC
|
Delaware
|
Whitestone Brokerage Services AZ, LLC
|
Arizona
|
Whitestone Pinnacle of Scottsdale, LLC
|
Delaware
|
Whitestone Pinnacle of Scottsdale - Phase II, LLC
|
Delaware
|
Whitestone Shops At Starwood, LLC
|
Delaware
|
Whitestone Shops At Starwood - Phase III, LLC
|
Delaware
|
Whitestone Shops at Pinnacle, LLC
|
Delaware
|
Whitestone Paradise Village, LLC
|
Delaware
|
Whitestone Fountain Square, LLC
|
Delaware
|
Whitestone Village Square at Dana Park, LLC
|
Delaware
|
Whitestone Village Square at Dana Park Development Land, LLC
|
Delaware
|
Whitestone Pecos Ranch, LLC
|
Delaware
|
Whitestone Headquarters Village, LLC
|
Delaware
|
Whitestone TRS, Inc.
|
Delaware
|
Whitestone Mercado, LLC
|
Delaware
|
Whitestone Realty, LLC
|
Arizona
|
Whitestone Anthem Marketplace, LLC
|
Delaware
|
Whitestone Anthem Marketplace Development Land, LLC
|
Delaware
|
Whitestone Fountain Hills, LLC
|
Delaware
|
Whitestone Woodlake Plaza, LLC
|
Delaware
|
Whitestone Market Street at DC Ranch, LLC
|
Delaware
|
Whitestone Heritage Trace Plaza 1, LLC
|
Delaware
|
Whitestone Heritage Trace Plaza 2, LLC
|
Delaware
|
Whitestone Strand, LLC
|
Delaware
|
Whitestone Promenade, LLC
|
Delaware
|
Whitestone Towne Center, LLC
|
Delaware
|
Whitestone Williams Trace Plaza, LLC
|
Delaware
|
Whitestone Williams Trace Shops, LLC
|
Delaware
|
Whitestone Clear Lake Offices, LLC
|
Delaware
|
Whitestone Towne Center Corner, LLC
|
Delaware
|
Whitestone Village Square at Dana Park Corner, LLC
|
Delaware
|
Whitestone City View, LLC
|
Delaware
|
Whitestone Davenport TRS, LLC
|
Delaware
|
Whitestone Davenport Village, LLC
|
Delaware
|
Whitestone Parkside Village South, LLC
|
Delaware
|
Whitestone Parkside Village North, LLC
|
Delaware
|
Whitestone Quinlan Crossing, LLC
|
Delaware
|
Whitestone Keller Place, LLC
|
Delaware
|
Whitestone Gilbert Tuscany Village Corner, LLC
|
Delaware
|
1.
|
I have reviewed this annual report on Form 10-K, for the period ended December 31, 2019, 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
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(b)
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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.
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1.
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I have reviewed this annual report on Form 10-K, for the period ended December 31, 2019, of Whitestone REIT;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ James C. Mastandrea
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James C. Mastandrea
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Chairman and Chief Executive Officer
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ David K. Holeman
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David K. Holeman
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Chief Financial Officer
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