Whitestone REIT(US:WSR)2025-10-31 20:16Property Ownership and Acquisitions - As of September 30, 2025, the company wholly owned 55 commercial properties with a total carrying amount of $1,012.5 million and approximately 4.8 million square feet of gross leasable area (GLA) [211] - The company acquired three properties in 2025: 1730 S Val Vista for $3.5 million, South Hulen Shopping Center for $32.4 million, and San Clemente for $12 million, all aligning with its Community Centered Properties® strategy [222][223][224] - The company acquired Village Shops at Dana Park for $5.6 million, a 10,128 square foot property that was 100% leased at the time of purchase [225] - Scottsdale Commons was acquired for $22.2 million, a 69,482 square foot property that was 96.6% leased at the time of purchase [226] - The company completed the sale of Sugar Park Plaza for $20.8 million, recording a gain on sale of $14.0 million [229] Financial Performance - Total revenues for the three months ended September 30, 2025, were approximately $41.0 million, up from $38.6 million for the same period in 2024, and $116.9 million for the nine months ended September 30, 2025, compared to $113.4 million in 2024 [217] - Net income attributable to Whitestone REIT for the three months ended September 30, 2025, was $18,333,000, compared to $7,624,000 in 2024 [237] - Total revenues for the nine months ended September 30, 2025, increased to $116,943,000, up from $113,444,000 in 2024, representing a 3% increase [251] - Same Store rental revenues for the nine months ended September 30, 2025, were $77,793,000, an increase of $2,665,000 or 4% compared to $75,128,000 in 2024 [251] - Property net operating income (NOI) for the nine months ended September 30, 2025, was $81,264,000, compared to $79,972,000 in 2024, reflecting an increase of $1,292,000 [247] Operating Expenses and Income - Total operating expenses for the three months ended September 30, 2025, were $26,925,000, a 4% increase from $25,940,000 in 2024 [243] - General and administrative expenses increased to $5,319,000 in the three months ended September 30, 2025, from $4,878,000 in 2024, marking an increase of 9% [246] - Interest expense for the three months ended September 30, 2025, rose to $8,658,000, up from $8,506,000 in 2024, a 2% increase attributed to a higher effective interest rate [245] - Total operating expenses for the nine months ended September 30, 2025, were $77,534,000, a slight increase of 0% compared to $77,507,000 in 2024 [253] - Same Store net operating income (NOI) for the three months ended September 30, 2025, was $25,591,000, an increase of $1,179,000 or 4.8% from $24,412,000 in 2024 [246] Debt and Interest Rates - As of September 30, 2025, $66.1 million, or approximately 10% of the company's outstanding debt, was subject to floating interest rates, with a potential impact of $0.7 million on annual net income for a 1% change in interest rates [216] - The average effective interest rate on the company's fixed interest rate debt was approximately 4.80% per annum as of September 30, 2025 [322] - Approximately 90% of the company's total outstanding debt, or $579.9 million, was subject to fixed interest rates, limiting the risk of fluctuating interest rates [322] - The interest rate on the Term Loan is set at 3.40% plus an applicable margin, with a maturity date of January 31, 2031 [290] - A 1% increase in interest rates would cause a $17.9 million decline in the fair value of the company's fixed rate debt [322] Cash Flow and Distributions - Cash provided by operating activities during the nine months ended September 30, 2025, was $34,907,000, with total distributions amounting to $20,809,000, resulting in a cash flow surplus of approximately $14,098,000 [266] - Payments of distributions to common shareholders and OP unit holders increased to $20.8 million for the nine months ended September 30, 2025, compared to $18.6 million in 2024, reflecting an increase of approximately 6.7% [278] - The company announced an increase in its quarterly distribution to $0.135 per common share and OP unit, effective January 2025 [267] - Cash flow from operations was $34.9 million for the nine months ended September 30, 2025, down from $40.2 million in 2024, representing a decrease of approximately 8.1% [278] - Cash, cash equivalents, and restricted cash decreased to approximately $6,848,000 as of September 30, 2025, down from $15,370,000 at the end of 2024 [275] Strategic Initiatives - The company is actively evaluating development and redevelopment activities on a case-by-case basis to grow its GLA [220] - The company has identified non-core properties for divestment to reallocate resources towards acquiring properties that align with its long-term growth objectives [221] - The company intends to continue investing in properties with potential for increasing value, which may incur significant capital expenditures [308] - The company completed several property acquisitions and sales, including Garden Oaks and Scottsdale Commons, impacting rental expenses and overall financial performance [254] - The company entered into equity distribution agreements for the sale of up to $100 million of common shares, providing additional funding flexibility [270]