Whitestone REIT(US:WSR)2020-02-27 22:35Financial Data and Key Metrics Changes - Whitestone REIT achieved a net income of $23.7 million or $0.57 per share for the year, compared to $21.4 million or $0.52 per share in 2018 [22] - Funds from operations (FFO) for the year was $38 million or $0.90 per share, down from $39.4 million or $0.94 per share in 2018 [23] - Core FFO for the year was $44.9 million or $1.06 per share, compared to $48.8 million or $1.16 per share in the prior year [24] - The company reported a debt-to-EBITDA ratio of 8.6x, improved from 8.7x in Q4 2018 [28] Business Line Data and Key Metrics Changes - Annualized base rent per share increased by 2.2% to $19.77, with same-store net operating income (NOI) growth of 4.7% for Q4 and 2.4% for the full year [11][12] - The company completed 2019 with minimal store closings and a solid balance sheet, indicating a larger tenant base and a higher value real estate portfolio [10] Market Data and Key Metrics Changes - Total occupancy at year-end was 90.3%, remaining relatively flat compared to the previous quarter and the year-ago quarter [20] - The company signed 208 renewal leases and 109 new leases in 2019, representing 953,000 square feet at a weighted average lease term of 4.1 years [20] Company Strategy and Development Direction - Whitestone plans to invest approximately $230 million in its current portfolio over the next several years, aiming to add incremental value of $175 million and generate an additional $24 million in annual NOI [13] - The company has a strategy focused on off-market acquisitions and has identified opportunities for growth in demographic spreads similar to its current market [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to improve occupancy and rental rates, particularly with the recent acquisition of Las Colinas Village [36][37] - The 2020 guidance anticipates net income per share in the range of $0.20 to $0.24 and FFO core per share in the range of $1.05 to $1.09, reflecting management's view of current market conditions [30] Other Important Information - The company completed the off-market acquisition of Las Colinas Village, a 105,000 square foot center, funded through a combination of proceeds from dispositions, debt, and equity [28] - General and administrative expenses as a percentage of revenue improved to 15.9% in Q4, down from 16.6% for the full year [21] Q&A Session Summary Question: Can you tell us how you sourced the Las Colinas acquisition and what the initial cap rate is expected to be? - The implied NOI at the time of acquisition represented about a 7% unlevered yield on investment costs, with the asset being 86% occupied [33] Question: What is the immediate plan for the Las Colinas property? - The immediate plan is to push up occupancy, with a focus on integrating the property into operations over the next 18 to 24 months [36] Question: Regarding guidance, are there any dispositions currently being marketed? - Guidance is based on the current portfolio, and while opportunities for recycling value are being explored, timing is difficult to predict [40] Question: What is driving the increase in share counts for the year? - The increase is largely driven by the full impact of the ATM program, with $12.6 million sold under the program in Q4 2019 [43] Question: Any comments on the recent acquisition and the company's growth strategy? - Management expressed excitement about the acquisition, marking a return to a growth strategy after addressing previous challenges with activist investors [45]