Whitestone REIT(US:WSR)2022-05-04 14:11Financial Data and Key Metrics Changes - Same store NOI growth was reported at 12.9% for Q1 2022, with total revenue increasing by 17.8% to $34.1 million compared to Q1 2021 [7][27] - FFO per diluted share increased to $0.30 from $0.20 in Q1 2021, representing a 50% growth [13][29] - Net income for the quarter was $0.14 per share, up from $0.03 per share in the prior year [28] Business Line Data and Key Metrics Changes - Occupancy levels increased to 91% from 88.7% year-over-year, reflecting a 230 basis point improvement [18] - Aggregate leasing spreads were positive at 10.1% for Q1 and 11.3% over the last 12 months, with new leasing spreads increasing by 12.7% [18] - Average base rent (ABR) rose to approximately $21 per square foot, a 7% increase from the previous year [20] Market Data and Key Metrics Changes - The company focuses on necessity-based community centers in high-growth Sunbelt markets, which continue to drive consumer traffic and tenant demand [8][14] - The tenant mix includes food services (33% of lease square footage), self-care (24%), and financial services (7%), indicating a diversified approach to meet community needs [22][24] Company Strategy and Development Direction - The company aims to maximize shareholder value through organic growth, prudent capital allocation, and reducing G&A expenses [8][9] - There is a commitment to disciplined growth, focusing on properties aligned with core strategies and evaluating potential acquisitions or developments [15][46] - The company is enhancing its governance practices, including the separation of the roles of Chairman and CEO [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2022 guidance, with expectations for best-in-class FFO per share growth [17] - The company anticipates occupancy levels to reach 92% to 93% by year-end, with same-store NOI growth projected between 3% to 5% [32][33] - Management noted the importance of localizing tenant offerings to meet community needs, particularly in response to the "Amazon effect" [21] Other Important Information - G&A expenses were reduced to $3 million for the quarter, with a commitment to lower annual G&A costs by approximately $2.5 million to $3 million compared to 2021 [29][33] - A quarterly dividend of $0.12 per share was approved, representing an 11.6% increase from the first quarter [31] Q&A Session Summary Question: Recovery of operating expenses and taxes - Management noted a one-time adjustment of $200,000 to $300,000, with strong recoveries expected due to increased occupancy [36] Question: Expectations for operating expense recoveries - Management expects recoveries to normalize in the mid-to-high eighties for the balance of the year [37] Question: Maturity of the $100 million term loan - Discussions with lending groups are ongoing, with expectations to recast the credit facility by the end of Q2 or early Q3 [38] Question: G&A adjustments related to executive departures - One-time adjustments of about $2.2 million were noted, with lower stock compensation expected going forward [41] Question: Focus on organic growth versus acquisitions - Management confirmed a focus on organic growth for 2022, with potential development opportunities planned for 2023 [46]