Greetings and welcome to the Whitestone REIT 4th Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce David Morty, Director of Investor Relations, please go ahead.

Good morning, and thank you for joining Whitestone Reads fourth quarter. The company undertakes no obligation to update.

Thank you, David. Good morning, and thank you for joining Whitestone's fourth quarter 2025 earnings conference call. I'll get right into the key results and then spend a little time on our long-term focus.

For 2025, we delivered a $1.05 core FFO per share.

This is up from 86 cents in 2021, which was the year prior to my appointment as CEO and reshaping of the leadership team. This represents a 5% CAGR, and we did that while strengthening our balance sheet, as evidenced by our debt-to-EBITDA metric, improving from 9.1 times for the full year 2021 to 7.0 times for the full year 2025. In addition, we overcame interest rate headwinds with an $0.11 per share step-up in interest expense between 2022 and 2023. Minimal debt maturities until 2029, one of the strongest leasing environments I have ever seen, and a great team. We have very good visibility into the next three years and are very confident in our ability to generate long-term 5% to 7% core FFO per share growth. Today, we'll talk about some non-FFO benefits we plan on delivering for investors, primarily gaining scale and enhancing the long-term value of our real estate. But know that delivering consistent core FFO growth is our North Star. For 2025, we delivered 4% same-store NOI growth. We delivered this through a combination of strong contractual escalators in excess of 2%. leasing success with straight-line leasing spreads in excess of 19 percent, and targeted redevelopment with projects typically delivering double-digit yields. We're issuing same-store NOI growth guidance of 3 to 4.75 percent for 2026, and we expect to deliver with the same combination of drivers that allowed us to deliver in 2025. During the fourth quarter, we acquired World Cup Plaza in Plano, a highly affluent Dallas sub-market, and one where we are gaining synergies from our concentration of properties there, with World Cup Plaza in close proximity to our Starwood and Lakeside properties. In addition, in the fourth quarter, we acquired Ashford Village, anchored by Houston's largest Japanese grocer and in close proximity to the Ashford Yard development, a mixed-use project currently underway on the former Slumberjay campus. We also disposed of Kempwood Plaza, another of our legacy properties, during the fourth Kempwood Plaza is located in Houston. Whitestone's acquisition and disposition strategy is designed around identifying and then remaining cognizant of the gap between neighborhood strength and the tenant strength. We identify properties where that gap is significant, and then our leasing team goes to work to close that gap. If we feel that that gap no longer exists, especially if it is the result of a neighborhood demand growth slowing, a property becomes a candidate for disposition. You may notice we've significantly increased our Green Street TAP score over the past four years, which is an indication that we're going after higher-end neighborhoods with greater discretionary spending capability. We anticipate this will serve investors well and in various economic cycles, and it's more manageable as we scale. The biggest value to be gained is not because of the overall level of our TAP score, but rather our ability to identify and acquire properties where we can improve a tenant base that lags that TAP. In the past three years, we've acquired approximately $213 million in properties, which provides our leasing team with great opportunities to generate earnings growth. We're capable of increasing that volume handled both by our acquisitions and our leasing teams, and we'll look for ways to increase that volume while achieving both our core FFO per share long-term growth target and continuing to strengthen our balance sheet with continued improvement in our debt to EBITDA RE ratio. Our focus on shop space delivers two additional primary benefits. Shop space requires less capital spend versus the bigger boxes, allowing us to deliver same-store NOI growth while being at the low end of the spectrum on capital spending. In addition, tenant selection and underwriting, our nearly 1,500 tenants provide greater durability of cash flow and greater risk dispersion. Supply-demand conditions within our footprint remain strong, with a limited supply of neighborhood centers coming onto the market and with demand continuing to increase. Foot traffic to our centers was up 3.9% year-over-year and our leasing pipeline remains robust. Our team remains very engaged at looking in ways to generate shareholder value and continue to outperform the market the way we've done over the last several years. With that, I'll turn things over to Christine to share more specifics on results and our focus on increasing the value of our real estate. Christine?

Good morning. We delivered strong, consistent results for 2025. We hit a record occupancy of 94.6% and delivered same-store NOI growth of 4% for the year. Combined straight-line leasing spreads for the fourth quarter were 18.2%, 25.9% for new leases, and 16.6% for renewals. This is our 15th consecutive quarter with leasing spreads in excess of 17%. One of the key initiatives this management team focused on immediately after the 2022 transition was our quality of revenue initiative, pushing to make sure that we had high-quality, fast-growing businesses throughout the portfolio. We're already renewing many of the leases from 2022 and releasing rates we are achieving are a testament to the strength of businesses we've matched to the neighborhoods that surround our centers. Our consistently high leasing spreads reveal the competitive advantage of our model and the expertise of our leasing team. We drove bad debt down to 0.55% for 2025, less than half the rate versus the years prior to the pandemic. Getting down to these levels represent a combination of our tenant selection, our underwriting, and the expectation we've set with our tenants. We believe we have one of the lowest bad debt levels for shop space across the peer set. Over the past four years, we've set out to prove that our geography and focus on actively managing a very high percentage of shop space allows us to outperform our larger peers. Accordingly, we've focused a lot on the annual financial metrics and continuing to deliver for investors on those metrics. This morning, I want to stress that delivering those results go hand-in-hand with a strategy that is enhancing the long-term value of our real estate we have a plan for every property in our portfolio and the plan for each property incorporates anticipated demographic changes and expected nearby urban development with a re-contracting plan that is the demand generated by the sort of the neighborhood when we acquire properties we look for properties with a large delta exists between the strength of the neighborhood and in-place tenants earnings growth is accelerated as we close the gap Let me be clear, we're able to close that gap more quickly and effectively as a result of how we do business because of the team we built. At times, redevelopment is a tool to help close the gap, but the overarching goal in terms of long-term value creation is upgrading the tenant base to match the neighborhood to successfully serve our customers and our clients. A prime example of pursuing a property plan and creating value is Heritage Trades Plaza in Fort Worth. We purchased Heritage Trace in 2014, recognizing the rapid growth of the Alliance Corridor on North Fort Worth. In 2022, HEB, the second-largest private employer in Texas and a grocer of the most dominant brand loyalty in the state, announced they are opening an HEB across from Heritage Trace. HEB made this decision in large part because of the increasingly dense concentration of young, upwardly mobile families in the area, something we discovered early on when we acquired the property. Accordingly, we refocused our plan for the center in order to take advantage of the increased traffic from HEB, as well as the demographic changes that were taking place in the neighborhood. The center developed a very strong traffic from parents returning home from work. Consequently, we took back a larger space in 2024 from a challenge fitness studio that had been in the center since acquisition and created seven spaces in its place. Six out of seven of those spaces were leased immediately in 2025, doubling the base rental rate for the space at approximately $34 per square foot. Overall, we anticipated we'll increase the center's NOI by 30% between 2022 to 2026. Our work is nowhere near done as we've got nearly 50% of the center's leases come due within the next three years, and we will continually review each every tenant to ensure they're keeping up with the speed of the growth in the area and the demography it represents. As I said, this type of plan exists for every center in our portfolio, whether it's upgrading the type of restaurant space, creating a pad when there's none that existed before, or moving and increasing the invisibility of a key space in the center, or such as setting up rooftop pickleball as we relentlessly pursue enhancing the value of our centers. Two acquisitions I'll call out that have rapid development similar to heritage trays are Arcadia Town Center in Phoenix and Garden Oaks in Houston. Arcadia is anchored by the Paradise Valley, one of the 50 wealthiest suburbs in the United States, with home values increasing at double-digit rates. The former Paradise Valley Mall is being redeveloped into a $2.2 billion mixed-use development, and Arcadia is not only anchored close to Paradise Valley, growth is spreading and enveloping the center. The Tempe Waterway and the bike trail pass by the backside of Arcadia, and we anticipate creating a pad site that will capitalize on associated traffic in the neighborhood. Similarly, in Houston, Garden Oaks is benefiting from the expansion of the Heights redeveloped as Houstonites recognize the value of larger plots of land in the area with excellent proximity to downtown for work. Rapid development occurring on Shepherd Drive is expanding northward, and Target anticipates opening a new store next to garden oaks in early 2027. we're evaluating pad site options and tenant candidates for that pad as well as re-merchandising that center let me expand a bit on the record 94.6 occupancy we hit at the end of 2025. this included very strong activity right up to the end of the year when i say that i mean i signed a lease at 11 23 pm on the 31st Our redevelopment capex in 2025 was approximately $5 million with redevelopment projects complete at Williams, Trace, La Mirada, and Lyons Square. We've added redevelopment projects to the list, including at Garden Oaks, and so we'll have a multi-year forecast of $20 million to $30 million in redevelopment spend in addition to the pads that we add every year. Last year we added several pads. We anticipate continuing to do that over the next few years. We will look to accelerate some of that work, and so we'll estimate the time proof for that spend over the next three years. I'd like to thank the leasing, redevelopment, and property management teams for everything they delivered in 2025. Our teams continue to elevate the performance every year, sharpening their plans for our center, adapting to change, and making sure our tenants see the value in operating from a Whitestone property. Their success is our success. In addition, the hard work not only allowed us to deliver in 2025, but lines up the company for continued growth in years ahead?

We delivered very strong results for both the fourth quarter and for the year. We delivered $1.05 in core FFO per share versus $1.01 in 2024, representing 4% growth. In 2024, we had above-average termination fees, which is part of the reason we grew core FFO per share by 11%. Those termination fees were at a normal level for 2025, $0.02 less than 2024. The quarter breakdown for 2025's core FFO was $0.25, $0.26, $0.26, and $0.28. That's about what we anticipated in terms of seeing growth during the year with some additional revenues in Q4, including percent of sales clauses that typically help accelerate things in the fourth quarter. You should anticipate a similar distribution in 2026. Same-store NOI growth of 3.8% for the fourth quarter and 4% for the full year. Our 3% to 4.75% same-store NOI growth forecast is a ground-up tenant-by-tenant forecast for 2026 that incorporates what we're seeing in terms of macroeconomic conditions. Meanwhile, the longer 3-5% growth is based upon what we've been able to achieve historically and incorporates the longer-term benefits of redevelopment projects we have underway. SameStore, ItoI Growth is the primary driver for our core FFO per share growth and gives us the confidence to lay out our five to seven percent growth target in 2026 and the longer term. Occupancy came in at ninety four point six percent and as a reminder we only include tenants in our occupancy when they take possession not when the contract assess and our heavier mix of shop space tenants it equates to a much lower sign not open list and we view the quicker turnaround as one of our competitive advantage occupancy for Whitestone and we were able to move it to that level by having a long-term vision for our properties rather than taking short-term occupancy wins being covered our redevelopment capital we've underwritten double-digit unlevered IRR on those outlays and we generally view the redevelopment is low risk high return investments on the balance sheet front, we finished the year with debt to EBITDA RE at seven times despite acquisitions being greater than dispositions in 2025 by approximately $56 million. In terms of Whitestone's liquidity, we have $7.4 million in cash and $220 million available under the credit. $25 cash flow from operations was 50.8 million dollars and dividends were 27.8 million dollars leaving strong cash flow after dividends to fund growth maturities in 2026 and 80 million in maturities in 2027 so we have a very clear runway in terms of our need to access the debt markets over the start dividend by 5.6 percent for the first quarter of 2026. our intent is to continue growing the dividend in line with core FFO growth. Tone's dividend remains one of the most secure, highest-growing dividends within the peer group, and we believe we have the right plan in place to continue the growth trajectory while maintaining our payout ratio. We'll open the line for questions.

Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star 2. Your first question comes from Mitch Germain. The citizen, please go ahead.

Good morning.

You guys had the final settlement with Pillarstone in the back part, I guess it was the, you know, kind of last week of the year. Just maybe kind of talk about how that payment impacted your balance sheet and what are the different puts or takes we need to be aware of in terms of, you know, maybe, you know, pro forma, you know, what changes occurred, you know, still late in the year.

Gotcha. Okay. What's G&A guide for the year?

G&A for, you didn't include that in your guidance this year. historically you have any idea of kind of where where where things can shake out over the course of 2026? Things have become more predictable and so gotcha okay last one for me obviously inline quarter so congrats with that your guidance was 103 to 107 your result came in at the low end of that range. But all of the various assumptions that you provided, same store occupancy, G&A, interest, you know, you kind of hit the midpoint on all of them. So, you know, and I recognize your comments, Scott, about the cadence of earnings for share increasing as the year went on. But, you know, what's it, you know, is 28 like the starting point now? Is, you know, it kind of, Are we growing from that level, or is it really, you know, some of the occupancy came on late border and you didn't really get the full benefit of that? You know, I'm just trying to understand about how we should be thinking about, you know, kind of one Q and beyond.

You lost me a little bit there, Mitch. No, you're right.

Actually, you're right. It's a dollar five. My apologies. But let's start at 28. Am I growing from 28? Is that the way to think about it, in terms of how we should be thinking about the cadence for 2026?

We feel very confident that it's going to be 5% to 7%.

The annual amount with no...

Gotcha.

I thought you were talking about 2028 when you said 2028.

No, no, no. Dan got it. I appreciate you guys.

Morris Van Dickum with Lathenburg. Please go ahead.

Hey, guys. Thanks. Could you maybe quantify what your signed, not open pipeline is? I know you report physical occupancy, unlike peers who tend to report least occupancy and then provide what the physical occupancy is. But if you could give us a sense of what your least occupancy is in terms of percentage and maybe also in terms of the value of the ABR that you've got signed.

It's different in that we're moving a little bit quicker than some of our peers. We typically have the shorter, smaller space commence leases very quickly. So, you know, so we just haven't reported it because it's not a number that because we get tenants in very quickly. People report signposts as well, but nobody reports. So for us, we report our commenced occupancy and, you know, really at any point in time or with the smaller tenants have leases that we're signing and moving in quickly.

But would you say that based on the leasing demand today, that your leased occupancy is probably, I think, if I recall correctly, your typical S&O pipeline is about 50 basis points. But is that higher today than it has stood historically?

I think you're…

Thanks, Dave. Now, maybe another question. In terms of the fourth quarter average rent that you signed of $32.58, when I compare that to your average AVR of the whole portfolio, there's about 28% delta. Now, I know quarterly things can be tricky, but is that sort of what people should think about in terms of mark-to-market if the portfolio were to be mark-to-market today? Thanks, Scott. And maybe my last question, in terms of what is your shop occupancy today and how is that relative to historical levels and how does that compare to your anchor occupancy today?

So we're at 97.974 a year ago. The smaller space is 60 bps from 92.1 a year ago. So we're continuing to see.

Yeah, and both of them, you mentioned overall occupancy, physical occupancy is at record levels. Both of those would be at physical. That's what I was trying to get at. Apologies, I probably wasn't very clear. Are both of those at record levels, or is there more upside? And how much higher do you think you can push occupancy?

To do that in the portfolio, quality of revenue, there's less opportunity to do so. But our renewals and, again, new leasing spreads, I think, are going to continue going out the next couple of quarters and really into the next couple of years just because there's no new product being built into the markets that we're in.

I think that the small spaces are the ones where we're going to continue to see the ability to move. I mean, historically, as you know, Flores, you know, people always talked about small spaces and lower occupancy. I think that paradigm is shifting. I think you're going to see the small spaces bumping up to the larger space kind of occupancy levels as we move forward. So that's one that will continue to move up. We do think there's opportunity. There's no reason to have a significant amount of vacancy in your small spaces. Obviously, the larger spaces are closer to 100%, but the 98% or so, that's a little more difficult.

Thanks, guys. Appreciate it.

Next question, Gerard Mater with Alliance Global Partners.

Thank you.

Frank, I wanted to ask you on the two acquisitions that you made in the quarter, can you maybe talk about any upside in those properties, maybe on market-market rent or on the occupancy side?

A neighborhood that has good housing stock and what we've been watching is seeing the improvement in the homes in the area. So I think for that, that's going to be just trading space into a rising income. And then if I look at World Cup Plaza, that's more of a re-merchandising effort. So I think this is one where, you know, we can really reposition that property. Just a loan, just because it's along the highway and it has such a high VPD count compared to others, that will be more of a re-merchandising. And same thing, we're already starting that process now with that property versus Ashford will be a natural, I think in the natural path of growth. And so every time a lease turns, we'll be able to do a renewal at a much higher rate.

A second question I have is on the same property expenses that she reported in this quarter. It seems like they were up 30% on the property operations and maintenance side. Can you provide some color on what drove the expenses higher?

Okay. All right. That's all I had.

Next question. Jay Cornreach with Cantor. Please go ahead.

Just wanted to follow up on the comments around the record occupancy levels, which is clearly showing the strength of your shopping centers. But I guess I wonder, you know, with the high occupancy, does that imply maybe some of the shopping centers are closer to maxing out kind of what their occupancy limits are? And maybe some of these centers are more ripe for, like, value creation, asset recycling? Or do you feel like there's just enough leasing power and still some occupancy left that you're happy with the kind of current portfolio you have?

So in the beginning, and this is something that we've been doing, especially when I talk about this when we're doing a re-merchandising effort, or buy an asset that's in the path of growth, they may have a higher occupancy level, but I have the opportunity to raise rents even based on anything. And then also, like I said, at points in a couple years, and I also think because there's just really these are all in infill markets. There's not a lot available for competition. So I think we still have room to go.

How we look at the surrounding neighborhood really is the biggest driver. So I think when we look at acquisitions and dispositions, And that's one of the huge factors is looking at the surrounding neighborhoods. So we think that even the properties that are 100%, as Christine said, we see growing neighborhoods. We see areas where you're looking. Just like we've done, we'll look at our portfolio and look for candidates to dispose and recycle capital. I think in our investor deck on page 10, we've got a lot of detail we provide to the investment community about what we're selling and what we're buying. So we'll continue to look for those opportunities. But largely our properties are in great growing areas where we see, even with high occupancy levels, the ability to move rent.

Great. Appreciate that, Keller. And then just one follow-up. You've outlined the $20 million to $30 million for redevelopment opportunities at, I think, five potential PAD sites. Is there any possibility of any of those coming online in 2026?

Capital for those. That's just more or less getting the approval. It depends on the cost for utilities and adjustment for grade on the site. With the larger developments, and this is something that we're starting to project out for in the sense that we've gotten the approvals for additional GLA in a number of sites, and we already have gone in for design and permitting on some of these, and it's really a question of making sure that we strike when the returns are in the right place with construction costs. And how we look at this is that we do this in phases. That way we can horizontally manage the risk because, again, it's an expansion of a property with additional GLA. So I don't see that coming on necessarily this year, but if some of it does, it'd be later in the year.

Great. Thanks very much.

Thank you.

Next question, Craig Coussara with Lucid Capital Markets.

Hey, good morning, guys. Scott, you kind of touched on this a few times, but I'd be curious to hear sort of the breakout in the fourth quarter of, you know, some percentage rent, and maybe were there any lease terminations as well? Just because your base rent was a little higher than we were looking for. Basically, your rent was a little higher. I'm just trying to figure out how much of that was percentage rents. Were there any lease terminations, any other one-timers? Okay, that's helpful. Ballpark is good enough. And I guess, you know, based on your commentary, it doesn't sound like there's a lot of anticipation for additional occupancy, but I'd be curious in the guidance, is that, you know, how much of that is further occupancy gains, or is that pretty much, you know, the strength of sort of rent growth and leasing? Okay, that's helpful. And just one more from me. You know, clearly you had a pickup in acquisitions this year. You know, I'd just be curious to hear about the volume of deals you're seeing and maybe the appetite you had given the existing liquidity you have. Or, you know, you mentioned, Dave, you might be recycling some capital later this year.

Opportunities in our market. I think one of the comments I made in my looking for retail, So we are out there looking for opportunities, looking in the current markets we're in. We look for assets that are a little different. If you look at what we've bought versus some of our peers, potentially a little smaller assets. We love to find assets with hair. Those are harder and harder to find, but we're finding ones where we can move the rents largely from a re-tenanting and re-mergenizing. So I would say what we're seeing in the market is slightly positive and slightly up. I think our appetite for growth is there, but what will always guide us is disciplined capital allocation and growing earnings and growing the value of the properties. So we do think there's opportunities to grow and scale and look at different ways to do that, but we're always going to be guided with our- Okay, thanks.

That's all my questions.

Next question, John Moussaka with E. Riley Securities, who's going to be Good morning.

Maybe looking at the redevelopment slide in the investor deck a little more, you kind of mentioned there's potential for 1% kind of boost to same-story ROI growth from redevelopment. Is much of that already kind of flowing in the expectations you have for 2026 same-story ROI growth, or could that be additive, particularly if we use your 2026 guidance as like a run rate for a longer term portfolio level growth? And is that 1% that's kind of being talked about in the deck more on maybe the full ground-up pad site level, or is that including some of the things that are a little more, you know, traditional development?

Just like it has that we get a much larger bump in rent whenever we do a redevelopment. Bring into Garden Oaks to pay that Garden Oaks is flowing.

And I guess with something like Lyons Square or, you know, even Garden Oaks you mentioned a little bit, But, like, does that kind of click on relatively immediately after the redevelopment spend is completed, or does it take a couple of leasing cycles for you to see the full uplift from that spend?

It depends on each one. So an example with Lions Square, we heard the redevelopment, and so it can be the redevelopment. If there's a significant re-merchandising that goes with it, we actually do it. We actually start it even before the redevelopment takes place.

So it depends. But I do think that's a key component of our timing of redevelopment. the ability to to move the rents when determined when the yeah but it's not immediate but we look for the ability to move it pretty quickly uh to time that with where we get locked down for multiple years again yeah that's that at garden oaks we wanted to make sure so an example of that is with garden oaks is that we wanted to see uh that the target was coming online before we started that move now with the target coming in we'll start the redevelopment process and we'll start the retenanting.

So we keep the in-place cash flow, reduce the risk, and then, you know, bring it alongside either, in this case, we did the same thing with Lakeside 2, where we waited for the HEB to come online, started the spend just before the HEB came online, then started retenanting while the HEB, you know, was coming out of the ground. So we try to time these things the best so we can get the best IRs.

And then in terms of occupancy, should we expect some, I guess, seasonality in in one queue I just know it tends to be when some of the retenanting in the in place portfolio is in full swings just kind of curious what the expectations are on a super short-term basis for occupancy at the end of the year always

same timing but just as I think just as a seasonal okay appreciate the color that's it for me thank you John I would like to turn the floor over to Dave Holman for closing remarks with that I think this concludes

our call and thank everyone.

This concludes today's teleconference. You may just connect your lines at this time and we thank you for your participation.