Whitestone REIT (WSR) 2 Mar 222021 Q4 Earnings call transcript

Greetings, and welcome to Whitestone REIT's Fourth Quarter and Year-End 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, David Mordy, Whitestone REIT's, Director of Investor Relations. you. Thank

begin. may You

thank conference joining call. and quarter REIT's XXXX earnings you morning, Whitestone for fourth Good

Officer; earnings be XXXX. I call Holeman, operating Chief company in this includes data this that Investor a Chief Joining a may fourth only Company's number Please Actual filed Dave as date, for Executive to information. this from news of some of historical uncertainties, a fact time. of Officer; Operating materially may due accurate section. period obligation and Holeman, today call statements important the have differ those Chief Scott me also with factors. been website, Whitestone's turn on call deemed It Executive now Christine today's made and during the and may statements Mastandrea, are detailed be that The Acknowledging the and webcast today's call Whitestone's Dave on Form the filings note, refer release and supplemental be Officer. to to SEC quarter package with www.whitestonereit.com, including are results Relations undertakes financial X, Please most may over no available Financial is earnings to note and to forward-looking release call this other update discussion are SEC XX-K the time-sensitive factors. and that risks, the these Hogan, will not recent news that Chief our statements. Officer. information of March forward-looking for our

QX. the earnings XX.X% growth. in by call. point, ongoing versus To derive for benefits joining same was The XXXX spreads, had Texas. country foot Good Whitestone's our driven We of income leasing leasing rose XX.X% David. fastest morning, our of you over results you, positive growth and rent growing markets as fourth base the the quarter and by in highlighted on XXXX annual from XXXX increases in some Same-store for quarter Arizona financial occupancy, net the XXXX QX period. that conference revenue in Thank was we focus and square per the strong performance operating improvement thank for

our has into has initiatives. Hogan, Controller numbers COO And and on will us promoted the operating today. Scott delivered promoted provide of We plans insight metrics, and some our began X.X% leasing to provide focusing since on the senior us as several for new the corporations Whitestone, our on markets. FFO also growth who call ongoing per management as Mastandrea, me our team the year been drive strategic since to thrilled outlook. XXXX today migration I take to and growth. recently Mordy, adjusting individuals Christine operations full with us profited of insight XXXX our share of and David and forgiveness XXXX from recently centers am we'll joined today, through with focus, loan our CFO our XXXX with members our call have been recently and our

Whitestone at inception. near since XX days, been the for the of business have While I've been I helm less with than

two we to unlock decisive seriousness Board management's and shareholder our believe to As and stewards be their's value. focus a of taken commitment invested of the the related Directors months, the by to good part of capital, actions and past firm recent that build these

XXXX we the move returns expect through With build to XXXX existing in to our we progress place, new portfolio. from as our leadership maximize on

I one the priority. we that touch to Today, on that also will is execute ensure to a upon with lay going flow. aligned We is company as our that high for our and view the of level leasing This ends strategy objectives, also forward. of and the will some taken motivation have know begin drive provide that out cash leasing. begins steps number many to value change and been I our incremental

number announcements to had of management related So, and governance. to these we've points, a

change quite for is simple. motivation Our

We shareholders shareholders with execute. listen on a for to laser-focused value renewed are to maximizing to commitment and

We initiatives by commitment that many are costs. reduce first, to are including, of general being energized the implemented, our administrative and

is costs. As Whitestone, in part will Particularly, and compensation. shift an well associated be culture strategy the with immediate G&A of at there reduction that management underway

The its the of as rights alignment termination practices. practices Board shareholder with Second, we corporate a plan and governance governance feedback that into relate shareholder received and February the corporate poison commonly plan, as or are of outreach the terminate and known ongoing reviews pill decision advances the in regularly Whitestone our process. committed of careful to best be part consideration, reaching as best to they aligns took objective. to In engagement Board

properties our important of Fourth, highest the we to believe And in organic overhead on initiatives. entrepreneurial the committed maximize FFO on focus our to our focus our focus close further not are Sunbelt. dilution optimizes mix with tenants We leasing our geographic expenses. share potential. in long-term and first share per from It the we markets. any do We to half markets remains Third, value. and existing growth strength XXXX our on increasing reducing acquisitions call intend near-term and of expect maximize to growth of is nation's on out the

We and have the that a right locations. in in portfolio high many demand traffic markets is high and located

remains strategy Our straightforward.

and business simple easy-to-understand very a have plan. We

it we to thoughtful and approach our drive and must understand grow Our and our we do intention revenue to to strategy disciplined manner. we occupancy. a Fifth, is execute enhance but in on that need

growth not We capital growth be our grow guided stewardship. will sake. But by for will disciplined

into is proceeds strategically acquisitions, the improvement. portfolio In properties we and sheet also and if and with designed evaluate our geography the XXXX, tenant positioned we business. to will development, team determine and place entire mix, are in monetize we to new best-in-class there Our the and leasing balance or scale should drive redeploy are

on look earnings position best-in-class annualized As per we now strong will With activity, we to our Christine. to for increasing to that, build record prosper focus share reductions, we growth come. leasing expect XXXX over and cost call I Together, occupancy, rent XXXX, growth. Whitestone years in that'll on move drive into to with XXXX, turn base to our the will

you, Thank Dave.

want to team thank driving of First, for our their with I our year tenants, to the customers. results commitment their and past the communities,

for to in fourth an in quarter overall XX.X%, from focus resulted was points. quality overall increase from and same-store revenue XX.X% were an X% full of a year. positive XX.X% and Leasing This XXX Our the operations increase on improving perspective an occupancy positive in basis scalability. the spreads tempering

fourth the spreads the X.X% for increase New the in year. XX.X% quarter spreads and quarter, XX.X% in for XX.X% leasing fourth increased year. full of full an increased the and Renewal leasing increased

Our total basis. lease value

our knowing leasing model, with We Scottsdale. country Worth, population of more than acquisitions Austin, than with in XXXX on, as rather localization. which San Phoenix, communities new begins pre-COVID to the needs our and activity fastest result engage job standardization, neighborhoods heavy Our double business growth. in we XXXX being our markets by disciplined Early is serve. business for in we prefer level. partner we was high-income This with of and Houston, and we the growing a the driven Dallas-Fort ensure the meet neighborhoods research Antonio, concentrated our

We retail meet these our regional to migration as We in expect to changing we the invest scale areas continue infrastructure. positioned the continue centers to environment. to

$XX our are X% tenant community uses focusing and average This a allows in soft per the on size over square big we square downsizing in needs. and square to space convenience of lower with a increased the Amazon X,XXX footprints At a Our is and goods. meet This our the mix us compatible further tenant crunch is focusing flexibility XXXX. Retail wider time the shops feet. per box meet foot and approximately needs to space and services of foot, well higher result hard range is for By ABR costs almost the are providing effect. of positioned giving conversion on smaller ABR versus consumer, opportunity.

particular, base and with healthcare, entertainment. In is are services, and pace. be Our fast built tenant education, and intentionally at the self-care sectors a food, diversified growing to wellness restaurants, wellness,

complete overall collections pre-COVID with cash from back shows near with XXXX COVID year-end bounce accounts levels. at Our our receivable by and strength and

and In developing and we enterprise businesses their transitioned with expanding weaker and are cultivating Ace us. tenants Hardware. high-value addition, out Pizza and businesses Barro's Examples

continue XXXX that in that to in Donuts, and mentioned franchise Dunkin' growth locations. are add certainly key be Mathnasium recently the Theory, we and others evidence the may our franchises, Orange Forbes year some of seeing of

connection, shareholder for the to that, lives value. continue provide to tenants work to striving improving by our needs to continue a work Going to community to like grow the to And the we'll of convenience, long-term others forward, continue and team advantage and growth call opportunities and with commerce. durable build I'd turn members economic Scott. over our meet With we'll by of build

Debt benefited income funds also operations, Thank share you, XXXX ABR up $X.XX growth diluted to the $X.XX our in Christine. $X.XX revenue The million of to X.X% $XXX.X grew was million to NAREIT opportunity year grew from for per quarter $XX occupancy fourth the growth. for versus same-store Full $XXX.X for X.X%. to year XX.X% X% share, X.X% versus XXXX the up for year-end the and from improvement XXXX, XXXX. for results. was XXXX. a prior I from year versus the per year. Total appreciate compared a share, share quarter we per $X.XX full million was XXXX, revenue driven revenue by

forgiveness, in FFO was during quarter. $X.XX per came gain Importantly, loan on loan XXXX share XXXX fourth the year-over-year of the from our our growth forgiveness Adjusting X.X%. the for FFO

plan we is compensation, we not published it one with the stock forward Core standards. consistent using FFO industry time, metric stop as While going last excluding to

$XXX balance the our early to various real an a to improvement implemented XX% of the liquidity. book strengthen to our estate over to end year, cost total last net improving Turning debt our XX%, million, ago. measures At was gross ratio Since we debt year sheet. XXXX, have

Our we've We EBITDAre those In XXXX share-based the do compensation to was debt for adjustments. full to making year not continue XX.X intend to reported with past, EBITDAre XXXX. for for management the year times X.X adjustments times ratio versus fees. and full debt the

are year-end targeting We ratio by XXXX. X.X a times EBITDAre of to times to X.X debt

with made area. in We our have in sheet we progress this commitment the significant strengthening and remain we are steadfast balance our on pleased

guidance. $X.XX from debt look quarter growth representing per lines. NOI to share same-store and XXXX With of first quarter of X.X% of in guidance X% our G&A from up, assumptions $X.XX to dividend representing XXXX. inclusive from I'm are XX%, approximately towards XXXX as in will range of guidance and XX% $X.XX, share an course in our key per We included Operator, of investors of $X a costs, The increase occupancy XX.X% quarterly introduce of annual common open of to per a $X.X these approved updating to severance fully XX% is we million for share recently forfeitures wrap now XXXX. reductions an the and excited the of to and XX% to non-recurring second to expected - forward over stock To million million the $X.XX X%, diluted dividend FFO OP to unit we cost Board revenue. and amount the Our bad please questions. targets. the take progress of year that, increase $X.X

with from Craig Kucera Our Securities. Riley question. with Please [Operator comes proceed question Instructions] B. first your

that topic management to didn't center non-retail listening Whitestone opening investor change. a shopping clearly company is to assets those make becoming address was on goal one Pillarstone legacy of many base. REIT guys And philosophical the for in changes the a pure-play appreciate you the light a over Appreciate time? in But Dave, going are and your is I tackling lot your of you comments,

Craig. what properties, we think we XX XX to at and as we originally proceeds ago. to and those focus community in those the look assets would Pillarstone assets of time, a monetize continue Thanks, we category do investment originally do do Absolutely. properties, well. in six look those it years We number properties. into which of and properties on and center to Since assets is that the The those what reinvest categorize intend liquidated want we've I really to be was

improvement quarter the about leasing remaining do is the Changing throughout vacancies gears, have? you fourth nice talk first that the in mentioned a quarter year. you and that you pretty the momentum looking traffic how Can at you really had

very bit do is Thanks is our have a strong, traffic for We retail, of says Wayne the quite I'd to markets, going. This talked about see And the restaurants this a a Most with of little it We puck in our we're already. second-generation question, traffic to lot speaking. also filled. where seeing like the of say of Christine Craig. still a we're just skating has and where for downsizing Gretzky leasing activity. bit

them the our We pullback markets. that, Along sector, have little with in very Wellness left. few seen of very Health we've and

great. you touched sense with what G&A - kind in Okay, far reduction is the much were a non-cash XXXX? in looking forfeiture. you And of reduction know on as But the versus of can bigger a of I as how picture, is us some there some at give cash stock reduction,

hi, is this Yes, Scott.

cash, So expect of with executive $XXX,XXX, year, then of reductions $X cost from some about And for reductions we for share-based cost. include should expense the to balance have compensation, net the of balance savings XXXX, compensation. of in million we have one-time the largely severance forfeitures, which the in

more debt you one pause, on to conservative? Or just indications any seeing 'XX? thinking X% guys from again tenants about X% some of some that give And just Is Okay, kind me the are maybe of bad you guidance. being great.

Thanks We expect any question. no we've deferrals. for give we to collected XXXX, to pause collections us and into about any cash our don't In continue the XXXX, had of be for strong from we really million individual that tenants $X XXXX. who In tenants. with issues XXXX, have

see on may have how side, just to be go. X.X% the So, we'll conservative collections

comes [Operator with Please question Instructions] with the Maxim Our of next question. Michael your Diana proceed Group. from line

development have? the or at are XXXX. on you. first make various your you Thank opportunities any you the you other least to plan Do you have mentioned, or any Dave, redevelopment of half going in out-parcels acquisitions

chime Yes, Thanks, Michael. Christine may I'll start and well. - I'll out in as

do we've the add there is got ability properties I is in of a to in we've GLA. we've instance Dunkin' past to bought continue as think in. with also communicated, site XXXX, ability We'll one the a we've built there's Donuts we things the the more as add where some that put little done for up pad done to we've a outparcels, that we

opportunities there'll So we that like on. be execute

for our like half you'd leasing, reductions. organic to is anything focus the going driving just and really of to growth overhead think the add? message year, cost on I first Christine, we're the on implementing

are As you now. can right imagine, hot drive-throughs Michael, that - really

So a picked into during up on are will portfolio execution 'XX, pause it's we back we redevelopment, identified but to moving we keep from number in where And on we're forward. had our the sites go market getting here, - process, we and of those had year. in expect know the we plans let those, which put on in continue and we do of you that portfolio, this back number COVID, have to delivering and you a can those we shape we imagine with

Okay, great. Thanks much. very

Thanks, Michael.

to the now of the I would comments. end closing the reached have for turn question-and-answer We back like call over session. to Holeman David

our place. new thank joining with XXXX we as the into everyone We're team and leadership on Thank you, operator, for energized call move today. us in

performance this earnings build significantly expenses. our in growth that, And with to We everyone, XXXX us and a will will call per overhead to you we of and property reduced expect continued have strong thank provide progress believe share great and end with day. best-in-class off help We our XXXX.

This concludes call. today's

time. may disconnect at for your this And You lines you we participation. your thank