Financial Data and Key Metrics Changes - The company reported a Nareit FFO per share growth of 7.2% and core FFO per share growth of 7% for 2025, with same-center NOI growth of 3.8% [5][18] - For 2026, guidance indicates mid-single digit growth rates for Nareit FFO and core FFO per share [5][20] Business Line Data and Key Metrics Changes - The company executed 1,026 leases totaling approximately 6 million square feet in 2025, with portfolio occupancy ending the year at 97.3% leased [12][18] - Comparable renewal rent spreads were reported at 20% in Q4, while comparable new leasing rent spreads were at 34.3% [13][18] Market Data and Key Metrics Changes - The company noted strong demand for necessity-based retail, with no signs of slowing, and high retention rates of 93% [11][12] - The company anticipates bad debt in 2026 to be in line with 2025, which was approximately 78 basis points of revenue [14][56] Company Strategy and Development Direction - The core business focuses on grocery-anchored shopping centers, with a disciplined acquisition strategy targeting an unlevered IRR of 9% for grocery-anchored acquisitions and above 10% for everyday retail centers [8][10] - The company plans to continue its development and redevelopment projects, with 20 projects under active construction and an estimated total investment of approximately $70 million [15][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the consumer and the strength of their portfolio, despite market concerns regarding consumer health and tariffs [5][18] - The company believes it can consistently deliver 3%-4% same-center NOI growth and achieve mid to high single-digit core FFO per share growth on a long-term basis [22] Other Important Information - The company has approximately $925 million of liquidity to support acquisition plans and aims to sell between $100 million and $200 million in assets in 2026 [20][21] - The company is focused on maintaining a high-quality portfolio while improving its long-term growth profile through strategic dispositions [21][70] Q&A Session Summary Question: Acquisition strategy and competition for grocery-anchored assets - Management acknowledged increased competition but noted a high level of confidence in reaching acquisition targets due to a balanced market [25][26] Question: Update on the Ocala development parcel - Management highlighted the growth in the Ocala market and expected unlevered returns above 9.5%-10% on the project [28][29] Question: Portfolio occupancy and leverage in renewal negotiations - Management indicated that high occupancy levels provide leverage in negotiations, with expectations for continued growth in inline stores [33][35] Question: Everyday retail acquisition strategy - Management sees everyday retail as a unique opportunity but emphasizes a disciplined approach to ensure high returns [39][40] Question: Capital deployment alternatives - Management discussed the potential for ground-up development and share buybacks, noting that acquisitions remain a priority [44][46] Question: Impact of Amazon's store closures on grocery demand - Management expressed that Amazon's struggles in brick-and-mortar retail do not significantly impact their grocery demand [49][50] Question: Bad debt expectations for 2026 - Management confirmed that bad debt levels are expected to remain consistent with 2025, with no significant concerns [56][57] Question: Credit rating and cost of debt - Management believes they are an underrated credit and is focused on increasing scale to improve their credit rating [60][61] Question: Disposition strategy and cap rates - Management outlined a strategy of trading out stabilized assets for higher return opportunities, with expectations for cap rates in the 5.5% to sub-5 range [68][70]

Financial Data and Key Metrics Changes - Whitestone REIT achieved a 94.2% occupancy rate, an increase of 30 basis points from Q2 2025, indicating strong leasing performance [5][34] - The company reported a 4.8% growth in same store net operating income (NOI) for the quarter, driven by increases in shop space leases across Texas and Arizona [5][12] - Average base rent rose to $25.59, reflecting an 8.2% increase year-over-year and a 26% increase compared to four years ago, translating to a 5.9% compound annual growth rate [7] - Core FFO per share was reported at $0.26, with expectations for a slight increase in Q4 due to new lease commencements [7][20] - Revenue for the quarter increased by 6%, with improved quality of revenue evidenced by a reduction in uncollectible accounts [22] Business Line Data and Key Metrics Changes - The company signed $29.1 million in total lease value, with new leases showing spreads of 22.5% and renewals at 18.6%, resulting in a combined straight-line leasing spread of 19.3% [12] - Foot traffic across the portfolio increased by 4% compared to Q3 2024, indicating healthy consumer engagement [12] Market Data and Key Metrics Changes - The markets in Texas and Arizona continue to show significant strength, supported by business-friendly environments and strong demographic trends [11] - The Houston metro area has added nearly 2 million people over the last 15 years, while the Phoenix metro area has added 1 million residents, contributing to demand for retail space [17] Company Strategy and Development Direction - The company aims to deliver consistent earnings growth and achieve a long-term core FFO per share growth target of 5% to 7% [6][9] - Whitestone REIT is focused on asset recycling, having disposed of one property this quarter and planning further acquisitions and dispositions to enhance portfolio value [10][47] - The company is actively redeveloping properties, with projects expected to contribute to same store NOI growth in 2026 [6][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to maintain strong leasing demand and occupancy rates, with no signs of weakening in leasing spreads [24][30] - The company is optimistic about the fourth quarter, traditionally its strongest leasing period, and anticipates a strong finish to the year [5][35] - Management highlighted the importance of understanding consumer behavior and adapting to changes in the market to sustain growth [15][18] Other Important Information - The company amended and extended its credit facility, improving its valuation cap rate to 6.75% and enhancing its financial flexibility [20][21] - The dividend is well-covered with a healthy payout ratio, and the company expects to grow the dividend in line with earnings growth [22] Q&A Session Summary Question: What are the expectations for rent expirations in 2026? - Management indicated that there is strong leasing demand and no unique factors affecting next year's rental rates, expecting similar leasing spreads as in recent quarters [23][24] Question: Can you provide details on the change in occupancy? - Management explained that the decrease in occupancy in smaller centers is due to taking back space to attract higher revenue and stronger quality tenants [30][31] Question: Any updates on the Pillarstone JV? - Management confirmed nearing the end of the collection phase, with a settlement agreement filed with the court expected to be approved, leading to a distribution of proceeds in December [36][37] Question: What are the assumptions driving leverage lower in Q4? - Management noted improvements in operations and expected strong performance in Q4, which typically sees sales break points hit [44][46] Question: What is the strategy for site developments? - Management stated that decisions on whether to hold or sell pad sites are made on a case-by-case basis, focusing on maximizing shareholder value [91][92]

Financial Data and Key Metrics Changes - Core FFO per share was $0.61 for the quarter and $2.40 for the year, representing an increase of 4.8% compared to 2023 [15] - Cash available for distribution totaled $370 million in 2024, with approximately $95 million of free cash flow retained after dividends paid [15] - Same store cash NOI grew 4.4% for the quarter and achieved record same store cash NOI growth of 5.8% for the year [15][16] - Net debt to annualized run rate adjusted EBITDA was 5.2x at year-end with liquidity of $623 million [15] Business Line Data and Key Metrics Changes - Leasing activity for the quarter included 23 leases totaling 2.4 million square feet, generating cash and straight-line leasing spreads of 19.4% and 34.9% respectively [15] - For the year, cash and straight-line leasing spreads were 28.3% and 41.8% respectively [15] - The company has already leased 70% of its operating portfolio square feet expected for 2025, achieving cash leasing spreads of 23.8% [9][16] Market Data and Key Metrics Changes - The national industrial leasing demand in 2024 was muted compared to recent years, but many markets remain healthy from both supply and demand standpoints [7] - The strongest market rent growth was observed in non-coastal and manufacturing markets [8] - Active tenant industries included commercial services, building products, and air freight and logistics [8] Company Strategy and Development Direction - The company anticipates a continued contraction in the supply pipeline, with deliveries down over 30% expected to persist into 2025 [7] - The company is focusing on airshoring and onshoring projects, which are expected to drive warehouse demand [8] - The company has entered a joint venture development partnership to construct approximately 400,000 square feet across two buildings in the Charlotte market, with a project cost of approximately $56 million [13][14] Management's Comments on Operating Environment and Future Outlook - Management noted an increase in tenant demand since the election, spanning a broad array of industries [7] - The company expects same store cash NOI growth to range between 3.5% to 4% for 2025, with retention rates projected between 70% to 75% [17] - Management expressed optimism about the acquisition market gaining momentum as the year progresses [11] Other Important Information - Acquisition volume for the fourth quarter totaled $294 million, consisting of 15 buildings with cash and straight-line cap rates of 6.2% and 6.9% respectively [10] - The company sold two buildings for aggregate proceeds of $29 million during the quarter [11] Q&A Session Summary Question: Leasing spreads and 2025 leasing expectations - Management indicated that Q4 leasing spreads were lower due to fixed-rate renewal options, but excluding those, spreads would have been 34% [22] - For 2025, management expects leasing spreads to be around 24% to 25% [23] Question: Development yields and specific asset performance - Management expects mid-6% yields for the Tampa assets and noted leasing activity in Spartanburg is increasing [28][29] Question: Impact of tariffs on tenants - Management stated there is uncertainty regarding tariffs, with tenants unsure of the impact and timing [36][38] Question: Trends in the private transaction market - Management noted a pause in the private market but expects an uptick in transaction activity as the year progresses [42][43] Question: Leasing activity post-election - Management observed a material uptick in tours and inquiries across various markets, indicating increased leasing activity [50] Question: Clarification on occupancy loss and leasing expectations - Management explained that the expected leasing for 2025 includes both new speculative leasing and renewals [55][61]