Whitestone REIT(US:WSR)2025-05-01 13:32Financial Data and Key Metrics Changes - Core FFO per share for the quarter was $0.25, up 4.2% compared to Q1 2024 [8] - Same store net operating income (NOI) growth was 4.8%, near the top of the forecasted range [9] - Straight line leasing spreads were 20.3%, marking the twelfth consecutive quarter with spreads exceeding 17% [9] - Annual net effective ABR per square foot increased by 4% over Q1 2024 [9] - Debt to EBITDAre ratio improved to 7.2 times from 7.8 times a year ago [25] Business Line Data and Key Metrics Changes - Redevelopment efforts contributed to a 1% lift in same store NOI growth, with a capital investment of $8 million in 2024 [8] - The company has sold 11 properties and acquired several new centers, enhancing the average household income level and ABR for its properties [10] - The company anticipates a 100 basis points lift in same store NOI growth from redevelopment projects in 2026, 2027, and 2028 [8] Market Data and Key Metrics Changes - Green Street's population forecast for the company's footprint is 50 to 70 basis points higher than the national average, with job growth CAGR expected to be 40 basis points above the national average [11] - Phoenix, the largest market for the company, leads the country in industrial construction underway [11] Company Strategy and Development Direction - The company is focused on capitalizing on the reshoring trend, which is expected to benefit its properties as manufacturing moves closer to home [7] - The strategy includes a focus on service-based businesses, which are anticipated to perform better in various economic cycles [6] - The company aims for a long-term core FFO growth target of 5% to 7%, supported by redevelopment and acquisitions [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to perform in different economic cycles, despite current macroeconomic uncertainties [67] - The company is optimistic about the future of service-based businesses in the Sunbelt region [11] - Management noted that while there are signs of a consumer pullback, traffic remains strong, and sales have not significantly declined [50] Other Important Information - The company has $16 million in cash and $98 million available under its credit facility, with a nearly 50% payout ratio for dividends [26] - The company is preparing for upcoming conferences and is eager to engage with investors [12] Q&A Session Summary Question: Why did occupancy decline? - The decline in occupancy was primarily due to a retenanting effort at Terra Vida, where a low-paying tenant was replaced by higher-performing tenants [28][29] Question: Is the $50 million in acquisitions already under contract? - The $50 million figure represents an estimate of current opportunities being pursued, not necessarily under contract yet [30][32] Question: What are the expectations for leverage levels this year? - The company expects to end the year in the low sixes for the debt to EBITDA ratio, with improvements anticipated from increased earnings and cash flow [33][34] Question: What redevelopment projects are contributing to same store NOI growth? - Key projects include Lions Square and Williams Trace, which are expected to enhance revenue quality through retenanting and redevelopment efforts [41][42] Question: Are tenants seeing any consumer pullback? - While there are indications of a shift in consumer behavior, particularly in restaurant alcohol sales, overall traffic remains strong and has not significantly impacted sales [48][50]