8-K - WSR - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 Or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 26, 2020

Whitestone REIT

(Exact name of registrant as specified in charter)

Maryland	001-34855	76-0594970
(State or other jurisdiction<br><br>of incorporation)	(Commission File Number)	(IRS Employer Identification No.)		2600 South Gessner,	Suite 500,	77063
---	---	---
Houston,	Texas
(Address of principal executive offices)			(Zip Code)

Registrant's telephone number, including area code: (713) 827-9595

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule #14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares of Beneficial Interest, par value $0.001 per share	WSR	New York Stock Exchange
Preferred Stock Purchase Rights	N/A	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 2.02 Results of Operations and Financial Condition.

On October 26, 2020, Whitestone REIT (the “Company”) announced its financial results for the three and nine months ended September 30, 2020. A copy of the Company’s October 26, 2020 press release is furnished as Exhibit 99.1 to this current report on Form 8-K. A copy of the Company’s Quarterly Operating and Financial Supplemental Package is furnished as Exhibit 99.2 to this current report on Form 8-K. The information contained in this current report on Form 8-K, including Exhibits 99.1 and 99.2, shall not be deemed “filed” with the Securities and Exchange Commission nor incorporated by reference into any registration statement filed or to be filed by the Company under the Securities Act of 1933, as amended.

Item 9.01 Exhibits

(d) Exhibits.

99.1 Press release of Whitestone REIT, dated October 26, 2020.

99.2 Quarterly Supplemental Operating and Financial Data Package for Whitestone REIT for the three and nine months ended September 30, 2020.

EXHIBIT INDEX

99.1	Press release of Whitestone REIT, dated October 26, 2020.
99.2	Quarterly Quarterly Supplemental Operating and Financial Data for Whitestone REIT for the three and nine months ended September 30, 2020.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		Whitestone REIT
		(Registrant)
Date:	October 26, 2020	By: /s/ David K. Holeman
		Name: David K. Holeman<br><br>Title: Chief Financial Officer

Document

WHITESTONE REIT

REPORTS THIRD QUARTER 2020 RESULTS & PROVIDES COVID-19 UPDATE

Houston, Texas, October 26, 2020 - Whitestone REIT (NYSE: WSR) (“Whitestone” or the “Company”) today announced its operating and financial results for the third quarter of 2020 along with an update on its business activities in light of the ongoing COVID-19 pandemic. Whitestone is a community-centered shopping center REIT that acquires, owns, manages, develops and redevelops high-quality open-air neighborhood centers primarily in the largest, fastest-growing and most affluent markets in the Sunbelt. Whitestone seeks to create communities that thrive through creating local connections between consumers in the surrounding communities and a well-crafted mix of national, regional and local tenants that provide daily necessities, needed services, entertainment and experiences. Whitestone is a monthly dividend paying stock and has consistently paid dividends for over 15 years. Whitestone’s strong balanced and managed capital structure provides stability and flexibility for growth and positions Whitestone to perform well through economic cycles.

All per share amounts are on a diluted per common share and operating partnership (“OP”) unit basis unless stated otherwise.

Third Quarter Operating and Financial Highlights:

•Net Income attributable to common shareholders of $0.9 million, or $0.02 per diluted share

•Funds from Operations (“FFO”) was $8.5 million, or $0.19 per share

•FFO Core was $10.1 million or $0.23 per share

•Paid quarterly dividend of $0.105 per share

•Rental rates on comparable new and renewal leases signed for the twelve months ended September 30, 2020 increased 4.9% and 12.1%, respectively, on a GAAP basis

•Same-store Net Operating Income (“NOI”) decreased 4.5% and 4.4% for the three and nine month periods, respectively

•Reduced real estate debt by $9.5 million

COVID-19 Update Summary (as of October 26, 2020)

•All 53 community centers are open and have remained open throughout the pandemic

•97% of tenants are open and operating (based on ABR)

•90% of third quarter 2020 contractual rents have been collected

•90% of total October contractual rents have been collected to date

•Entered into rent deferral agreements representing 3% of third quarter 2020 revenue

•Grew cash and cash equivalents by 11% since March 31, 2020 to $40.7 million

•Bad debt/uncollectable revenue for the quarter was $1.4 million, or $0.03 per share, primarily due to COVID-19 pandemic and included $125,000 non-cash straight-line receivables

Jim Mastandrea, Chairman and Chief Executive Officer of Whitestone REIT, commented, “We continue to produce strong operating results and lead the shopping center sector in cash rental collections. Our business has performed well during the pandemic as our entrepreneurial tenants persevere through these uncertain times. Our team has worked tirelessly to help our service-focused, community-centered tenants find creative ways to utilize our open-air properties to serve their local neighborhoods. Our focus remains on protecting our employees, tenants, and communities and the value we have created for the stakeholders we serve.”

Financial Results

Reconciliations of Net Income Attributable to Whitestone REIT to FFO and FFO Core are included herein.

Net income attributable to common shareholders for the quarter ended September 30, 2020 was $0.9 million, or $0.02 per diluted share, inclusive of $1.4 million, or $0.03 per share, related to credit loss and straight-line rent reserve, primarily due to the impact of the COVID-19 pandemic. Net income attributable to common shareholders for the quarter ended September 30, 2019 was $1.8 million, or $0.04 per share.

FFO for the quarter ended September 30, 2020 was $8.5 million, or $0.19 per share, as compared to $9.2 million, or $0.22 per share for the quarter ended September 30, 2019. The decrease is primarily due to the $1.4 million of bad debt/uncollectable

revenue primarily related to the impact of the COVID-19 pandemic. FFO Core for the quarter ended September 30, 2020 was $10.1 million or $0.23 per share, compared to $11.0 million, or $0.26 per share for the quarter ended September 30, 2019.

Operating Results

For the periods ending September 30, 2020 and 2019, the Company’s operating highlights were as follows:

	Third Quarter 2020	Third Quarter 2019
Occupancy:
Wholly Owned Properties	88.9%	90.4%
Same Store Property Net Operating Income Change^(1)^	(4.5)%	2.7%
Rental Rate Growth - Total (GAAP Basis):	11.0%	14.4%
New Leases	2.9%	6.6%
Renewal Leases	13.9%	16.4%
Leasing Transactions:
Number of New Leases	32	26
New Leases - Annualized Revenue (millions)	$9.9	$9.3
Number of Renewal Leases	46	42
Renewal Leases - Annualized Revenue (millions)	$9.7	$9.4

^(1)^ Excludes straight-line rent, amortization of above/below market rates and lease termination fees in both periods.

Real Estate Portfolio Update

Community Centered Properties^TM^ Portfolio Statistics:

As of September 30, 2020, Whitestone wholly owned 58 Community Centered Properties^TM^ with 5.0 million square feet of gross leasable area ("GLA"). Five of the 58 Community Centered Properties^TM^ are land parcels held for future development. The portfolio is comprised of 30 properties in Texas, 27 in Arizona and one in Illinois. Whitestone’s Community Centered Properties^TM^ are located in Austin (4), San Antonio (3), Chicago (1), Dallas-Fort Worth (8), Houston (15) and the greater Phoenix metropolitan area (27). In addition to being business friendly, these are six of the top markets in the country in terms of size, economic strength and population growth. 2017 estimates show the projected 5-year population growth rates for both Austin and Dallas-Fort Worth to be 9.7%, San Antonio to be 8.6%, Houston to be 8.0%, and Phoenix to be 6.6% ^(1)^. The Company’s properties in these markets are generally located on the best retail corners embedded in affluent communities. The Company also owns an 81.4% equity interest in and manages eight properties containing 0.9 million square feet of GLA through its investment in Pillarstone OP.

At the end of the third quarter, the Company’s diversified tenant base was comprised of 1,386 tenants, with the largest tenant accounting for only 2.8% of annualized base rental revenues. Lease terms range from less than one year for smaller tenants to over 15 years for larger tenants. Whitestone’s leases generally include minimum monthly lease payments and tenant reimbursements for payment of taxes, insurance and maintenance, and typically exclude restrictive lease clauses.

^(1)^Source: Claritas, as of April 2017.

COVID-19 Update Summary

During the third quarter of 2020, the COVID-19 pandemic continued to impact the Company’s operations. As of the end of the third quarter, approximately 97% (% of ABR) of the Company’s tenants were open for business. Cash collections for the quarter totaled 90% of contractual rents, up from 81% in the prior quarter. These strong collections are a result of the Company’s strategic locations, well-crafted tenant mix and the efforts of its team members in proactively working with tenants to assist them through these difficult times. Cash collections in October are 90% collected to date.

Balance Sheet and Liquidity

As of October 23, 2020, Whitestone had $40.7 million in cash and cash equivalents, $13.0 million of availability and $110.5 million of capacity under its credit facility. At September 30, 2020, Whitestone had $39.0 million of cash and cash equivalents on its balance sheet, $13.0 million of availability and $110.5 million of capacity under its credit facility.

In the third quarter of 2020, Whitestone repaid a $9 million mortgage loan at maturity, resulting in no real estate debt maturing until 2022.

The Company has undepreciated real estate assets of $1.1 billion at September 30, 2020.

At September 30, 2020, 51 of the Company’s wholly owned 58 properties were unencumbered by mortgage debt, with an undepreciated cost basis of $824.6 million. At September 30, 2020, the Company had total real estate debt, net of cash, of $628.3 million, of which approximately 84% was subject to fixed interest rates. The Company’s weighted average interest rate on all fixed rate debt as of the end of the third quarter was 4.1% and the weighted average remaining term was 4.6 years.

Dividend

On September 22, 2020, the Company declared a quarterly cash distribution of $0.105 per common share and OP unit for the fourth quarter of 2020, to be paid in three equal installments of $0.035 in October, November, and December of 2020. Going forward, Whitestone’s Board of Trustees will continue to evaluate dividend declarations each quarter. Whitestone intends to maintain compliance with REIT taxable income distribution requirements.

Conference Call Information

In conjunction with the issuance of its financial results, the Company invites you to listen to the its earnings release conference call to be broadcast live on Tuesday, October 27, 2020 at 8:30 A.M. Eastern Time. The call will be led by James C. Mastandrea, Chairman and Chief Executive Officer, and David K. Holeman, Chief Financial Officer. Conference call access information is as follows:

Dial-in number for domestic participants: (800) 263-0877

Dial-in number for international participants: (646) 828-8143

The conference call will be recorded, and a telephone replay will be available through Tuesday, November 10, 2020. Replay access information is as follows:

Replay number for domestic participants: (844) 512-2921

Replay number for international participants: (412) 317-6671

Passcode (for all participants): 7032366

To listen to a webcast of the conference call, click on the Investor Relations tab of the Company’s website, www.whitestonereit.com, and then click on the webcast link. A replay of the call will be available on Whitestone’s website via the webcast link until the Company’s next earnings release. Additional information about Whitestone can be found on the Company’s website.

The third quarter earnings release and supplemental data package will be located in the Investor Relations section of the Company’s website. For those without internet access, the earnings release and supplemental data package will be available by mail upon request. To receive a copy, please call the Company’s Investor Relations line at (713) 435-2219.

Supplemental Financial Information

Supplemental materials and details regarding Whitestone's results of operations, communities and tenants are available on the Company's website at www.whitestonereit.com.

About Whitestone REIT

Whitestone is a community-centered shopping center REIT that acquires, owns, manages, develops and redevelops high-quality open-air neighborhood centers primarily in the largest, fastest-growing and most affluent markets in the Sunbelt. Whitestone seeks to create communities that thrive through creating local connections between consumers in the surrounding communities and a well-crafted mix of national, regional and local tenants that provide daily necessities, needed services, entertainment and experiences. Whitestone is a monthly dividend paying stock and has consistently paid dividends for over 15 years. Whitestone’s strong, balanced and managed capital structure provides stability and flexibility for growth and positions Whitestone to perform well through economic cycles. For additional information, please visit www.whitestonereit.com.

Forward-Looking Statements

Certain statements contained in this press release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company intends for all such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable. Such information is subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements include statements about our earnings guidance, future liquidity, performance growth and expectations and other matters and can generally be identified by the Company’s use of forward-looking terminology, such as “may,” “will,” “plan,” “expect,” “intend,” “anticipate,” “believe,” “continue,” “goals” or similar words or phrases that are predictions of future events or trends and which do not relate solely to historical matters.

The following are additional factors that could cause the Company's actual results and its expectations to differ materially from those described in the Company's forward-looking statements: uncertainties related to the COVID-19 pandemic, including the unknown duration and economic, operational and financial impacts of the COVID-19 pandemic, and the actions taken or contemplated by U.S. and local governmental authorities or others in response to the pandemic on the Company’s business, employees and tenants, including, among others, (a) changes in tenant demand for the Company’s properties, (b) financial challenges confronting major tenants, including as a result of decreased customers’ willingness to frequent, and mandated stay in place orders that have prevented customers from frequenting, some of Company’s tenants’ businesses and the impact of these issues on the Company’s ability to collect rent from its tenants; (c) operational changes implemented by the Company, including remote working arrangements, which may put increased strain on IT systems and create increased vulnerability to cybersecurity incidents, (d) significant reduction in the Company’s liquidity due to the lack of further availability under its revolving credit facility and limited ability to access the capital markets and other sources of financing on attractive terms or at all, and (e) prolonged measures to contain the spread of COVID-19 or the premature easing of government-imposed restrictions implemented to contain the spread of COVID-19; adverse economic or real estate developments or conditions in Texas or Arizona, Houston and Phoenix in particular, including as a result of a surge in COVID-19 cases in such areas and the impact on our tenants’ ability to pay their rent, which could result in bad debt allowances or straight-line rent reserve adjustments; the imposition of federal income taxes if we fail to qualify as a real estate investment trust (“REIT”) in any taxable year or forego an opportunity to ensure REIT status; the Company's ability to meet its long-term goals, including its ability to execute effectively its acquisition and disposition strategy, to continue to execute its development pipeline on schedule and at the expected costs, and its ability to grow its NOI as expected, which could be impacted by a number of factors, including, among other things, its ability to continue to renew leases or re-let space on attractive terms and to otherwise address its leasing rollover; its ability to successfully identify, finance and consummate suitable acquisitions, and the impact of such acquisitions, including financing developments, capitalization rates and internal rates of return; the Company’s ability to reduce or otherwise effectively manage its general and administrative expenses; the Company’s ability to fund from cash flows or otherwise distributions to its shareholders at current rates or at all; current adverse market and economic conditions including, but not limited to, the significant volatility and disruption in the global financial markets caused by the COVID-19 pandemic and potential volatility as a result of the upcoming U.S. presidential election; lease terminations or lease defaults; the impact of competition on the Company's efforts to renew existing leases; changes in the economies and other conditions of the specific markets in which the Company operates; economic, legislative and regulatory changes, including changes to laws governing REITs and the impact of the legislation commonly known as the Tax Cuts and Jobs Act; the success of the Company's real estate strategies and investment objectives; the Company's ability to continue to qualify as a REIT under the Internal Revenue

Code of 1986, as amended; and other factors detailed in the Company's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents the Company files with the Securities and Exchange Commission from time to time.

Non-GAAP Financial Measures

This release contains supplemental financial measures that are not calculated pursuant to U.S. generally accepted accounting principles (“GAAP”) including EBITDA, FFO, FFO Core, and NOI. Following are explanations and reconciliations of these metrics to their most comparable GAAP metric.

EBITDA: Earnings Before Interest, Tax, Depreciation and Amortization: Management believes that EBITDA is an appropriate supplemental measure of operating performance to net income attributable to the Company. The Company defines EBITDA as operating revenues (rental and other revenues) less property and related expenses (property operation and maintenance and real estate taxes), adjustments for unconsolidated real estate partnership and general and administrative expenses. Management believes that EBITDA provides useful information to the investment community about the Company's operating performance when compared to other REITs since EBITDA is generally recognized as a standard measure. However, EBITDA should not be viewed as a measure of the Company's overall financial performance since it does not reflect depreciation and amortization, involuntary conversion, interest expense, provision for income taxes, gain or loss on sale or disposition of assets and the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company's properties. Other REITs may use different methodologies for calculating EBITDA and, accordingly, the Company's EBITDA may not be comparable to other REITs.

FFO: Funds From Operations: Management believes that FFO is a useful measure of the Company's operating performance. The Company computes FFO as defined by NAREIT, which states that FFO should represent net income (loss) (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains or losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. FFO does not represent cash flows from operating activities determined in accordance with GAAP and should not be considered an alternative to net income as an indication of the Company's performance or to cash flow from operations as a measure of liquidity or ability to make distributions and service debt.

Management considers FFO a useful additional measure of performance for an equity REIT because it facilitates an understanding of the operating performance of its properties without giving effect to real estate depreciation and amortization, which assumes that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, management believes that FFO provides a more meaningful and accurate indication of the Company's performance and useful information for the investment community to compare Whitestone to other REITs since FFO is generally recognized as the industry standard for reporting the operations of REITs.

Other REITs may use different methodologies for calculating FFO, and accordingly, the Company's FFO may not be comparable to other REITs. The Company presents FFO per diluted share calculations that are based on the outstanding dilutive common shares plus the outstanding OP units for the periods presented.

FFO Core: Funds From Operations Core: Management believes that the computation of FFO in accordance with NAREIT's definition includes certain non-cash and non-comparable items that affect the Company's period-over-period performance. These items include, but are not limited to, legal settlements, proxy contest fees, debt extension costs, non-cash share-based compensation expense and rent support agreement payments received from sellers on acquired assets. In addition, the Company believes that FFO Core is a useful supplemental measure for the investing community to use in comparing the Company to other REITs as many REITs provide some form of adjusted or modified FFO. However, other REITs may use different adjustments, and the Company's FFO Core may not be comparable to the adjusted or modified FFO of other REITs.

NOI: Net Operating Income: Management believes that NOI is a useful measure of the Company's property operating performance. The Company defines NOI as operating revenues (rental and other revenues) less property and related expenses (property operation and maintenance and real estate taxes). Because NOI excludes general and administrative expenses, depreciation and amortization, involuntary conversion, interest expense, interest income, provision for income taxes, gain or loss on sale or disposition of assets, pro rata share of NOI of unconsolidated entities and capital expenditures and leasing costs, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact to operations from trends in occupancy rates, rental rates and operating costs, providing perspective not immediately apparent from net income. The Company uses NOI to evaluate its operating performance since NOI allows the Company to evaluate the impact of factors, such as occupancy levels, lease

structure, lease rates and tenant base, have on the Company's results, margins and returns. In addition, management believes that NOI provides useful information to the investment community about the Company's property and operating performance when compared to other REITs since NOI is generally recognized as a standard measure of property performance in the real estate industry. However, NOI should not be viewed as a measure of the Company's overall financial performance since it does not reflect general and administrative expenses, depreciation and amortization, involuntary conversion, interest expense, interest income, provision for income taxes, gain or loss on sale or disposition of assets, and the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company's properties. Other REITs may use different methodologies for calculating NOI, and accordingly, the Company's NOI may not be comparable to that of other REITs.

Same Store NOI: Management believes that Same Store NOI is a useful measure of the Company’s property operating performance because it includes only the properties that have been owned for the entire period being compared, and that it is frequently used by the investment community. Same Store NOI assists in eliminating differences in NOI due to the acquisition or disposition of properties during the period being presented, providing a more consistent measure of the Company’s performance. The Company defines Same Store NOI as operating revenues (rental and other revenues, excluding straight-line rent adjustments, amortization of above/below market rents, and lease termination fees) less property and related expenses (property operation and maintenance and real estate taxes), Non-Same Store NOI, and NOI of our investment in Pillarstone OP (pro rata). We define “Non-Same Stores” as properties that have been acquired since the beginning of the period being compared and properties that have been sold, but not classified as discontinued operations. Other REITs may use different methodologies for calculating Same Store NOI, and accordingly, the Company's Same Store NOI may not be comparable to that of other REITs.

Investors Contact:

Kevin Reed, Director of Investor Relations

Whitestone REIT

(713) 435-2219

ir@whitestonereit.com

Whitestone REIT and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
	September 30, 2020		December 31, 2019
	(unaudited)
ASSETS
Real estate assets, at cost
Property	$	1,104,963	$	1,099,955
Accumulated depreciation	(157,303)		(137,933)
Total real estate assets	947,660		962,022
Investment in real estate partnership	34,849		34,097
Cash and cash equivalents	38,990		15,530
Restricted cash	128		113
Escrows and acquisition deposits	7,866		8,388
Accrued rents and accounts receivable, net of allowance for doubtful accounts^(1)^	23,604		22,854
Receivable due from related party	1,302		477
Unamortized lease commissions, legal fees and loan costs	8,082		8,960
Prepaid expenses and other assets^(1)^	2,444		3,819
Total assets	$	1,064,925	$	1,056,260
LIABILITIES AND EQUITY
Liabilities:
Notes payable	$	666,516	$	644,699
Accounts payable and accrued expenses^(2)^	49,861		39,336
Payable due to related party	845		307
Tenants' security deposits	6,915		6,617
Dividends and distributions payable	4,528		12,203
Total liabilities	728,665		703,162
Commitments and contingencies:	—		—
Equity:
Preferred shares, $0.001 par value per share; 50,000,000 shares authorized; none issued and outstanding as of September 30, 2020 and December 31, 2019	—		—
Common shares, $0.001 par value per share; 400,000,000 shares authorized; 42,353,309 and 41,492,117 issued and outstanding as of September 30, 2020 and December 31, 2019, respectively	42		41
Additional paid-in capital	560,129		554,816
Accumulated deficit	(214,468)		(204,049)
Accumulated other comprehensive loss	(15,707)		(5,491)
Total Whitestone REIT shareholders' equity	329,996		345,317
Noncontrolling interest in subsidiary	6,264		7,781
Total equity	336,260		353,098
Total liabilities and equity	$	1,064,925	$	1,056,260

Whitestone REIT and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(in thousands)

September 30, 2020	December 31, 2019
(unaudited)			^(1)^Accrued rents and accounts receivable, net of allowance for doubtful accounts
---	---	---	---	---
Tenant receivables	$	22,944	$	16,741
Accrued rents and other recoveries	15,926		16,983
Allowance for doubtful accounts	(15,465)		(11,173)
Other receivables	199		303
Total accrued rents and accounts receivable, net of allowance for doubtful accounts	$	23,604	$	22,854
^(2)^ Operating lease right of use assets (net)	$	813	$	1,328	^(3)^ Operating lease liabilities	$	819	$	1,331
---	---	---	---	---

Whitestone REIT and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020		2019		2020		2019
Revenues
Rental^(1)^	$	28,868	$	29,368	$	86,116	$	87,527
Management, transaction, and other fees	1,032		511		1,965		1,624
Total revenues	29,900		29,879		88,081		89,151
Operating expenses
Depreciation and amortization	7,171		6,789		21,112		19,865
Operating and maintenance	5,029		5,118		15,021		14,760
Real estate taxes	4,670		4,410		13,591		12,474
General and administrative	5,860		5,597		15,604		16,514
Total operating expenses	22,730		21,914		65,328		63,613
Other expenses (income)
Interest expense	6,400		6,679		19,561		19,738
Loss on sale or disposal of assets and assets held for sale	18		—		882		115
Interest, dividend and other investment income	(71)		(141)		(206)		(550)
Total other expense	6,347		6,538		20,237		19,303
Income before equity investments in real estate partnerships and income tax	823		1,427		2,516		6,235
Equity in earnings of real estate partnership	196		524		752		1,480
Provision for income tax	(105)		(102)		(288)		(324)
Income from continuing operations	914		1,849		2,980		7,391
Gain on sale of property from discontinued operations	—		—		—		701
Income from discontinued operations	—		—		—		701
Net income	914		1,849		2,980		8,092
Less: Net income attributable to noncontrolling interests	14		42		58		184
Net income attributable to Whitestone REIT	$	900	$	1,807	$	2,922	$	7,908

Whitestone REIT and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(in thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020		2019		2020		2019
Basic Earnings Per Share:
Income from continuing operations attributable to Whitestone REIT, excluding amounts attributable to unvested restricted shares	$	0.02	$	0.04	$	0.07	$	0.18
Income from discontinued operations attributable to Whitestone REIT	0.00		0.00		0.00		0.02
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares	$	0.02	$	0.04	$	0.07	$	0.20
Diluted Earnings Per Share:
Income from continuing operations attributable to Whitestone REIT, excluding amounts attributable to unvested restricted shares	$	0.02	$	0.04	$	0.07	$	0.17
Income from discontinued operations attributable to Whitestone REIT	0.00		0.00		0.00		0.02
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares	$	0.02	$	0.04	$	0.07	$	0.19
Weighted average number of common shares outstanding:
Basic	42,346		40,187		42,202		39,942
Diluted	43,440		41,446		43,040		41,084
Consolidated Statements of Comprehensive Income (Loss)
Net income	$	914	$	1,849	$	2,980	$	8,092
Other comprehensive income (loss)
Unrealized gain (loss) on cash flow hedging activities	1,241		(2,235)		(10,395)		(11,740)
Comprehensive income (loss)	2,155		(386)		(7,415)		(3,648)
Less: Net income attributable to noncontrolling interests	14		42		58		184
Less: Comprehensive income (loss) attributable to noncontrolling interests	43		(51)		(203)		(266)
Comprehensive income (loss) attributable to Whitestone REIT	$	2,098	$	(377)	$	(7,270)	$	(3,566)

Whitestone REIT and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(in thousands)

Three Months Ended September 30,			Nine Months Ended September 30,
2020	2019	2020	2019		^(1)^Rental
---	---	---	---	---	---	---	---	---
Rental revenues	$	21,808	$	21,623	$	65,591	$	64,752
Recoveries	8,339		8,240		24,976		23,701
Bad debt	(1,279)		(495)		(4,451)		(926)
Total rental	$	28,868	$	29,368	$	86,116	$	87,527
Whitestone REIT and Subsidiaries<br>CONSOLIDATED STATEMENTS OF CASH FLOWS<br>(in thousands)
---	---	---	---	---
	Nine Months Ended September 30,
	2020		2019
Cash flows from operating activities:
Net income from continuing operations	$	2,980	$	7,391
Net income from discontinued operations	—		701
Net income	2,980		8,092
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	21,112		19,865
Amortization of deferred loan costs	839		814
Loss on sale or disposal of assets and assets held for sale	882		115
Bad debt	4,451		926
Share-based compensation	3,980		4,548
Equity in earnings of real estate partnership	(752)		(1,480)
Changes in operating assets and liabilities:
Escrows and acquisition deposits	522		48
Accrued rents and accounts receivable	(6,123)		(1,762)
Receivable due from related party	(825)		15
Distributions from real estate partnership	—		1,005
Unamortized lease commissions, legal fees and loan costs	(958)		(202)
Prepaid expenses and other assets	2,145		(6,838)
Accounts payable and accrued expenses	131		5,206
Payable due to related party	538		15
Tenants' security deposits	298		310
Net cash provided by operating activities	29,220		29,976
Cash flows from investing activities:
Additions to real estate	(5,808)		(9,953)
Proceeds from note receivable	922		—
Net cash used in investing activities	(4,886)		(9,953)
Net cash provided by investing activities of discontinued operations	—		701
Cash flows from financing activities:
Distributions paid to common shareholders	(20,771)		(34,047)
Distributions paid to OP unit holders	(430)		(793)
Proceeds from issuance of common shares, net of offering costs	2,241		8,546
Payments of exchange offer costs	(43)		(5)
Proceeds from notes payable	1,734		—
Proceeds from bonds payable	—		100,000
Net proceeds from (payments of) credit facility	30,000		(90,200)
Repayments of notes payable	(11,514)		(7,502)
Payments of loan origination costs	—		(4,088)
Repurchase of common shares	(2,076)		(776)
Net cash used in financing activities	(859)		(28,865)
Net increase (decrease) in cash, cash equivalents and restricted cash	23,475		(8,141)
Cash, cash equivalents and restricted cash at beginning of period	15,643		13,786
Cash, cash equivalents and restricted cash at end of period ^(1)^	$	39,118	$	5,645

^(1)^For a reconciliation of cash, cash equivalents and restricted cash, see supplemental disclosures below.

Whitestone REIT and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

Supplemental Disclosures

(Unaudited)

(in thousands)

	Nine Months Ended September 30,
	2020		2019
Supplemental disclosure of cash flow information:
Cash paid for interest	$	18,790	$	19,176
Cash paid for taxes	$	353	$	396
Non cash investing and financing activities:
Disposal of fully depreciated real estate	$	34	$	203
Financed insurance premiums	$	1,431	$	1,238
Value of shares issued under dividend reinvestment plan	$	74	$	104
Value of common shares exchanged for OP units	$	1,138	$	37
Change in fair value of cash flow hedge	$	(10,395)	$	(11,740)
	September 30,
---	---	---	---	---
	2020		2019
Cash, cash equivalents and restricted cash
Cash and cash equivalents	$	38,990	$	5,539
Restricted cash	128		106
Total cash, cash equivalents and restricted cash	$	39,118	$	5,645

Whitestone REIT and Subsidiaries

RECONCILIATION OF NON-GAAP MEASURES

(in thousands, except per share and per unit data)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
FFO (NAREIT) AND FFO CORE	2020		2019		2020		2019
Net income attributable to Whitestone REIT	$	900	$	1,807	$	2,922	$	7,908
Adjustments to reconcile to FFO:
Depreciation and amortization of real estate	7,125		6,718		20,943		19,657
Depreciation and amortization of real estate assets of real estate partnership (pro rata)	386		651		1,262		1,921
Loss on sale or disposal of assets and assets held for sale of continuing operations, net	18		—		882		115
Gain on sale of property from discontinued operations, net	—		—		—		(701)
Loss on sale or disposal of properties or assets of real estate partnership (pro rata)	24		13		78		20
Net income attributable to noncontrolling interests	14		42		58		184
FFO (NAREIT)	8,467		9,231		26,145		29,104
Adjustments to reconcile to FFO Core:
Share-based compensation expense	1,645		1,719		4,167		4,770
FFO Core	$	10,112	$	10,950	$	30,312	$	33,874
FFO PER SHARE AND OP UNIT CALCULATION
Numerator:
FFO	$	8,467	$	9,231	$	26,145	$	29,104
Distributions paid on unvested restricted common shares	—		—		—		(41)
FFO excluding amounts attributable to unvested restricted common shares	$	8,467	$	9,231	$	26,145	$	29,063
FFO Core excluding amounts attributable to unvested restricted common shares	$	10,112	$	10,950	$	30,312	$	33,833
Denominator:
Weighted average number of total common shares - basic	42,346		40,187		42,202		39,942
Weighted average number of total noncontrolling OP units - basic	776		927		836		927
Weighted average number of total common shares and noncontrolling OP units - basic	43,122		41,114		43,038		40,869
Effect of dilutive securities:
Unvested restricted shares	1,094		1,259		838		1,142
Weighted average number of total common shares and noncontrolling OP units - diluted	44,216		42,373		43,876		42,011
FFO per common share and OP unit - basic	$	0.20	$	0.22	$	0.61	$	0.71
FFO per common share and OP unit - diluted	$	0.19	$	0.22	$	0.60	$	0.69
FFO Core per common share and OP unit - basic	$	0.23	$	0.27	$	0.70	$	0.83
FFO Core per common share and OP unit - diluted	$	0.23	$	0.26	$	0.69	$	0.81

Whitestone REIT and Subsidiaries

RECONCILIATION OF NON-GAAP MEASURES

(continued)

(in thousands)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
PROPERTY NET OPERATING INCOME	2020		2019		2020		2019
Net income attributable to Whitestone REIT	$	900	$	1,807	$	2,922	$	7,908
General and administrative expenses	5,860		5,597		15,604		16,514
Depreciation and amortization	7,171		6,789		21,112		19,865
Equity in earnings of real estate partnership	(196)		(524)		(752)		(1,480)
Interest expense	6,400		6,679		19,561		19,738
Interest, dividend and other investment income	(71)		(141)		(206)		(550)
Provision for income taxes	105		102		288		324
Gain on sale of property from discontinued operations, net	—		—		—		(701)
Management fee, net of related expenses	81		(14)		246		(64)
Loss on sale or disposal of assets and assets held for sale of continuing operations, net	18		—		882		115
NOI of real estate partnership (pro rata)	990		1,714		3,250		5,152
Net income attributable to noncontrolling interests	14		42		58		184
NOI	21,272		22,051		62,965		67,005
Non-Same Store NOI	(421)		16		(1,434)		116
NOI of real estate partnership (pro rata)	(990)		(1,714)		(3,250)		(5,152)
NOI less Non-Same Store NOI and NOI of real estate partnership (pro rata)	19,861		20,353		58,281		61,969
Same Store straight-line rent adjustments	(50)		(178)		640		(919)
Same Store amortization of above/below market rents	(148)		(226)		(589)		(690)
Same Store lease termination fees	(727)		(127)		(1,028)		(401)
Same Store NOI^^	$	18,936	$	19,822	$	57,304	$	59,959
	Three Months Ended						Nine Months Ended
---	---	---	---	---	---	---	---	---
	September 30,						September 30,
EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION	2020		2019		2020		2019
Net income attributable to Whitestone REIT	$	900	$	1,807	$	2,922	$	7,908
Depreciation and amortization	7,171		6,789		21,112		19,865
Equity in earnings of real estate partnership	(196)		(524)		(752)		(1,480)
Interest expense	6,400		6,679		19,561		19,738
Provision for income taxes	105		102		288		324
Gain on sale of property from discontinued operations, net	—		—		—		(701)
Management fee, net of related expenses	81		(14)		246		(64)
Loss on sale or disposal of assets and assets held for sale of continuing operations, net	18		—		882		115
EBITDA adjustments for real estate partnership	804		1,651		2,690		4,900
Net income attributable to noncontrolling interests	14		42		58		184
EBITDA	$	15,297	$	16,532	$	47,007	$	50,789

Document

TABLE OF CONTENTS
	Page
Corporate Profile	1
Third Quarter 2020 Earnings Release	2
Financial Results
Consolidated Balance Sheets	8
Consolidated Statements of Operations and Comprehensive Income (Loss)	10
Consolidated Statements of Cash Flows	13
Reconciliation of Non-GAAP Measures	15
Same Store Property Analysis	18
Other Financial Information	20
Market Capitalization and Selected Ratios	21
Summary of Outstanding Debt and Debt Maturities	23
Summary of Occupancy and Top Tenants	24
COVID-19 - Status of Tenants	27
Summary of Leasing Activity	28
Lease Expirations	31
Property Details	32
CORPORATE PROFILE
---	---	---	---	---
NYSE: WSR
Common Shares

58 Community Centers
5.0 million sq. ft. of gross
leasable area
1,386 tenants

6 Top Growth Markets
Austin
Chicago
Dallas-Fort Worth
Houston
Phoenix
San Antonio

Fiscal Year End
12/31
Common Shares &
Units Outstanding*:
Common Shares: 42.4 million
Operating Partnership Units:
0.8 million
Distribution (per share / unit)*:
Quarter: 0.1050
Annualized: 0.42			ICR Inc.
Dividend Yield: 6.6%**				Brad Cohen
				203.682.8211
Board of Trustees:
Nandita V. Berry
Jeffrey A. Jones
Paul T. Lambert
Jack L. Mahaffey	JMP Securities	Maxim Group	Ladenburg Thalmann
James C. Mastandrea	Aaron Hecht	Michael Diana	John J. Massocca
David F. Taylor	415.835.3963	212.895.3641	212.409.2543
Trustee Emeritus:	ahecht@jmpsecurities.com	mdiana@maximgrp.com	jmassocca@ladenburg.com
Daniel G. DeVos
* As of October 23, 2020
** Based on common share price
of 6.41 as of close of market on
October 23, 2020.

All values are in US Dollars.

WHITESTONE REIT

REPORTS THIRD QUARTER 2020 RESULTS & PROVIDES COVID-19 UPDATE

All per share amounts are on a diluted per common share and operating partnership (“OP”) unit basis unless stated otherwise.

Third Quarter Operating and Financial Highlights:

•Net Income attributable to common shareholders of $0.9 million, or $0.02 per diluted share

•Funds from Operations (“FFO”) was $8.5 million, or $0.19 per share

•FFO Core was $10.1 million or $0.23 per share

•Paid quarterly dividend of $0.105 per share

•Rental rates on comparable new and renewal leases signed for the twelve months ended September 30, 2020 increased 4.9% and 12.1%, respectively, on a GAAP basis

•Same-store Net Operating Income (“NOI”) decreased 4.5% and 4.4% for the three and nine month periods, respectively

•Reduced real estate debt by $9.5 million

COVID-19 Update Summary (as of October 26, 2020)

•All 53 community centers are open and have remained open throughout the pandemic

•97% of tenants are open and operating (based on ABR)

•90% of third quarter 2020 contractual rents have been collected

•90% of total October contractual rents have been collected to date

•Entered into rent deferral agreements representing 3% of third quarter 2020 revenue

•Grew cash and cash equivalents by 11% since March 31, 2020 to $40.7 million

•Bad debt/uncollectable revenue for the quarter was $1.4 million, or $0.03 per share, primarily due to COVID-19 pandemic and included $125,000 non-cash straight-line receivables

Financial Results

Reconciliations of Net Income Attributable to Whitestone REIT to FFO and FFO Core are included herein.

Operating Results

For the periods ending September 30, 2020 and 2019, the Company’s operating highlights were as follows:

	Third Quarter 2020	Third Quarter 2019
Occupancy:
Wholly Owned Properties	88.9%	90.4%
Same Store Property Net Operating Income Change^(1)^	(4.5)%	2.7%
Rental Rate Growth - Total (GAAP Basis):	11.0%	14.4%
New Leases	2.9%	6.6%
Renewal Leases	13.9%	16.4%
Leasing Transactions:
Number of New Leases	32	26
New Leases - Annualized Revenue (millions)	$9.9	$9.3
Number of Renewal Leases	46	42
Renewal Leases - Annualized Revenue (millions)	$9.7	$9.4

^(1)^ Excludes straight-line rent, amortization of above/below market rates and lease termination fees in both periods.

Real Estate Portfolio Update

Community Centered Properties^TM^ Portfolio Statistics:

^(1)^Source: Claritas, as of April 2017.

COVID-19 Update Summary

Balance Sheet and Liquidity

In the third quarter of 2020, Whitestone repaid a $9 million mortgage loan at maturity, resulting in no real estate debt maturing until 2022.

The Company has undepreciated real estate assets of $1.1 billion at September 30, 2020.

Dividend

Conference Call Information

Dial-in number for domestic participants: (800) 263-0877

Dial-in number for international participants: (646) 828-8143

The conference call will be recorded, and a telephone replay will be available through Tuesday, November 10, 2020. Replay access information is as follows:

Replay number for domestic participants: (844) 512-2921

Replay number for international participants: (412) 317-6671

Passcode (for all participants): 7032366

Supplemental Financial Information

Supplemental materials and details regarding Whitestone's results of operations, communities and tenants are available on the Company's website at www.whitestonereit.com.

About Whitestone REIT

Forward-Looking Statements

Non-GAAP Financial Measures

Investors Contact:

Kevin Reed, Director of Investor Relations

Whitestone REIT

(713) 435-2219

ir@whitestonereit.com

Whitestone REIT and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
	September 30, 2020		December 31, 2019
	(unaudited)
ASSETS
Real estate assets, at cost
Property	$	1,104,963	$	1,099,955
Accumulated depreciation	(157,303)		(137,933)
Total real estate assets	947,660		962,022
Investment in real estate partnership	34,849		34,097
Cash and cash equivalents	38,990		15,530
Restricted cash	128		113
Escrows and acquisition deposits	7,866		8,388
Accrued rents and accounts receivable, net of allowance for doubtful accounts^(1)^	23,604		22,854
Receivable due from related party	1,302		477
Unamortized lease commissions, legal fees and loan costs	8,082		8,960
Prepaid expenses and other assets^(2)^	2,444		3,819
Total assets	$	1,064,925	$	1,056,260
LIABILITIES AND EQUITY
Liabilities:
Notes payable	$	666,516	$	644,699
Accounts payable and accrued expenses^(3)^	49,861		39,336
Payable due to related party	845		307
Tenants' security deposits	6,915		6,617
Dividends and distributions payable	4,528		12,203
Total liabilities	728,665		703,162
Commitments and contingencies:	—		—
Equity:
Preferred shares, $0.001 par value per share; 50,000,000 shares authorized; none issued and outstanding as of September 30, 2020 and December 31, 2019	—		—
Common shares, $0.001 par value per share; 400,000,000 shares authorized; 42,353,309 and 41,492,117 issued and outstanding as of September 30, 2020 and December 31, 2019, respectively	42		41
Additional paid-in capital	560,129		554,816
Accumulated deficit	(214,468)		(204,049)
Accumulated other comprehensive loss	(15,707)		(5,491)
Total Whitestone REIT shareholders' equity	329,996		345,317
Noncontrolling interest in subsidiary	6,264		7,781
Total equity	336,260		353,098
Total liabilities and equity	$	1,064,925	$	1,056,260

Whitestone REIT and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(in thousands)

September 30, 2020	December 31, 2019
(unaudited)			^(1)^Accrued rents and accounts receivable, net of allowance for doubtful accounts
---	---	---	---	---
Tenant receivables	$	22,944	$	16,741
Accrued rents and other recoveries	15,926		16,983
Allowance for doubtful accounts	(15,465)		(11,173)
Other receivables	199		303
Total accrued rents and accounts receivable, net of allowance for doubtful accounts	$	23,604	$	22,854
^(2)^ Operating lease right of use assets (net)	$	813	$	1,328	^(3)^ Operating lease liabilities	$	819	$	1,331
---	---	---	---	---

Whitestone REIT and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020		2019		2020		2019
Revenues
Rental^(1)^	$	28,868	$	29,368	$	86,116	$	87,527
Management, transaction, and other fees	1,032		511		1,965		1,624
Total revenues	29,900		29,879		88,081		89,151
Operating expenses
Depreciation and amortization	7,171		6,789		21,112		19,865
Operating and maintenance	5,029		5,118		15,021		14,760
Real estate taxes	4,670		4,410		13,591		12,474
General and administrative	5,860		5,597		15,604		16,514
Total operating expenses	22,730		21,914		65,328		63,613
Other expenses (income)
Interest expense	6,400		6,679		19,561		19,738
Loss on sale or disposal of assets and assets held for sale	18		—		882		115
Interest, dividend and other investment income	(71)		(141)		(206)		(550)
Total other expense	6,347		6,538		20,237		19,303
Income before equity investments in real estate partnerships and income tax	823		1,427		2,516		6,235
Equity in earnings of real estate partnership	196		524		752		1,480
Provision for income tax	(105)		(102)		(288)		(324)
Income from continuing operations	914		1,849		2,980		7,391
Gain on sale of property from discontinued operations	—		—		—		701
Income from discontinued operations	—		—		—		701
Net income	914		1,849		2,980		8,092
Less: Net income attributable to noncontrolling interests	14		42		58		184
Net income attributable to Whitestone REIT	$	900	$	1,807	$	2,922	$	7,908

Whitestone REIT and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(in thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020		2019		2020		2019
Basic Earnings Per Share:
Income from continuing operations attributable to Whitestone REIT, excluding amounts attributable to unvested restricted shares	$	0.02	$	0.04	$	0.07	$	0.18
Income from discontinued operations attributable to Whitestone REIT	0.00		0.00		0.00		0.02
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares	$	0.02	$	0.04	$	0.07	$	0.20
Diluted Earnings Per Share:
Income from continuing operations attributable to Whitestone REIT, excluding amounts attributable to unvested restricted shares	$	0.02	$	0.04	$	0.07	$	0.17
Income from discontinued operations attributable to Whitestone REIT	0.00		0.00		0.00		0.02
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares	$	0.02	$	0.04	$	0.07	$	0.19
Weighted average number of common shares outstanding:
Basic	42,346		40,187		42,202		39,942
Diluted	43,440		41,446		43,040		41,084
Consolidated Statements of Comprehensive Income (Loss)
Net income	$	914	$	1,849	$	2,980	$	8,092
Other comprehensive income (loss)
Unrealized gain (loss) on cash flow hedging activities	1,241		(2,235)		(10,395)		(11,740)
Comprehensive income (loss)	2,155		(386)		(7,415)		(3,648)
Less: Net income attributable to noncontrolling interests	14		42		58		184
Less: Comprehensive income (loss) attributable to noncontrolling interests	43		(51)		(203)		(266)
Comprehensive income (loss) attributable to Whitestone REIT	$	2,098	$	(377)	$	(7,270)	$	(3,566)

Whitestone REIT and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(in thousands)

Three Months Ended September 30,			Nine Months Ended September 30,
2020	2019	2020	2019		^(1)^Rental
---	---	---	---	---	---	---	---	---
Rental revenues	$	21,808	$	21,623	$	65,591	$	64,752
Recoveries	8,339		8,240		24,976		23,701
Bad debt	(1,279)		(495)		(4,451)		(926)
Total rental	$	28,868	$	29,368	$	86,116	$	87,527
Whitestone REIT and Subsidiaries<br>CONSOLIDATED STATEMENTS OF CASH FLOWS<br>(in thousands)
---	---	---	---	---
	Nine Months Ended September 30,
	2020		2019
Cash flows from operating activities:
Net income from continuing operations	$	2,980	$	7,391
Net income from discontinued operations	—		701
Net income	2,980		8,092
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	21,112		19,865
Amortization of deferred loan costs	839		814
Loss on sale or disposal of assets and assets held for sale	882		115
Bad debt	4,451		926
Share-based compensation	3,980		4,548
Equity in earnings of real estate partnership	(752)		(1,480)
Changes in operating assets and liabilities:
Escrows and acquisition deposits	522		48
Accrued rents and accounts receivable	(6,123)		(1,762)
Receivable due from related party	(825)		15
Distributions from real estate partnership	—		1,005
Unamortized lease commissions, legal fees and loan costs	(958)		(202)
Prepaid expenses and other assets	2,145		(6,838)
Accounts payable and accrued expenses	131		5,206
Payable due to related party	538		15
Tenants' security deposits	298		310
Net cash provided by operating activities	29,220		29,976
Cash flows from investing activities:
Additions to real estate	(5,808)		(9,953)
Proceeds from note receivable	922		—
Net cash used in investing activities	(4,886)		(9,953)
Net cash provided by investing activities of discontinued operations	—		701
Cash flows from financing activities:
Distributions paid to common shareholders	(20,771)		(34,047)
Distributions paid to OP unit holders	(430)		(793)
Proceeds from issuance of common shares, net of offering costs	2,241		8,546
Payments of exchange offer costs	(43)		(5)
Proceeds from notes payable	1,734		—
Proceeds from bonds payable	—		100,000
Net proceeds from (payments of) credit facility	30,000		(90,200)
Repayments of notes payable	(11,514)		(7,502)
Payments of loan origination costs	—		(4,088)
Repurchase of common shares	(2,076)		(776)
Net cash used in financing activities	(859)		(28,865)
Net increase (decrease) in cash, cash equivalents and restricted cash	23,475		(8,141)
Cash, cash equivalents and restricted cash at beginning of period	15,643		13,786
Cash, cash equivalents and restricted cash at end of period ^(1)^	$	39,118	$	5,645

^(1)^For a reconciliation of cash, cash equivalents and restricted cash, see supplemental disclosures below.

Whitestone REIT and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

Supplemental Disclosures

(Unaudited)

(in thousands)

	Nine Months Ended September 30,
	2020		2019
Supplemental disclosure of cash flow information:
Cash paid for interest	$	18,790	$	19,176
Cash paid for taxes	$	353	$	396
Non cash investing and financing activities:
Disposal of fully depreciated real estate	$	34	$	203
Financed insurance premiums	$	1,431	$	1,238
Value of shares issued under dividend reinvestment plan	$	74	$	104
Value of common shares exchanged for OP units	$	1,138	$	37
Change in fair value of cash flow hedge	$	(10,395)	$	(11,740)
	September 30,
---	---	---	---	---
	2020		2019
Cash, cash equivalents and restricted cash
Cash and cash equivalents	$	38,990	$	5,539
Restricted cash	128		106
Total cash, cash equivalents and restricted cash	$	39,118	$	5,645

Whitestone REIT and Subsidiaries

RECONCILIATION OF NON-GAAP MEASURES

(in thousands, except per share and per unit data)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
FFO (NAREIT) AND FFO CORE	2020		2019		2020		2019
Net income attributable to Whitestone REIT	$	900	$	1,807	$	2,922	$	7,908
Adjustments to reconcile to FFO:
Depreciation and amortization of real estate	7,125		6,718		20,943		19,657
Depreciation and amortization of real estate assets of real estate partnership (pro rata)	386		651		1,262		1,921
Loss on disposal or impairment of assets and properties of continuing operations, net	18		—		882		115
Gain on sale of property from discontinued operations, net	—		—		—		(701)
Loss on sale or disposal of properties or assets of real estate partnership (pro rata)	24		13		78		20
Net income attributable to noncontrolling interests	14		42		58		184
FFO (NAREIT)	8,467		9,231		26,145		29,104
Adjustments to reconcile to FFO Core:
Share-based compensation expense	1,645		1,719		4,167		4,770
FFO Core	$	10,112	$	10,950	$	30,312	$	33,874
FFO PER SHARE AND OP UNIT CALCULATION
Numerator:
FFO	$	8,467	$	9,231	$	26,145	$	29,104
Distributions paid on unvested restricted common shares	—		—		—		(41)
FFO excluding amounts attributable to unvested restricted common shares	$	8,467	$	9,231	$	26,145	$	29,063
FFO Core excluding amounts attributable to unvested restricted common shares	$	10,112	$	10,950	$	30,312	$	33,833
Denominator:
Weighted average number of total common shares - basic	42,346		40,187		42,202		39,942
Weighted average number of total noncontrolling OP units - basic	776		927		836		927
Weighted average number of total common shares and noncontrolling OP units - basic	43,122		41,114		43,038		40,869
Effect of dilutive securities:
Unvested restricted shares	1,094		1,259		838		1,142
Weighted average number of total common shares and noncontrolling OP units - diluted	44,216		42,373		43,876		42,011
FFO per common share and OP unit - basic	$	0.20	$	0.22	$	0.61	$	0.71
FFO per common share and OP unit - diluted	$	0.19	$	0.22	$	0.60	$	0.69
FFO Core per common share and OP unit - basic	$	0.23	$	0.27	$	0.70	$	0.83
FFO Core per common share and OP unit - diluted	$	0.23	$	0.26	$	0.69	$	0.81

Whitestone REIT and Subsidiaries

RECONCILIATION OF NON-GAAP MEASURES

(continued)

(in thousands)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
PROPERTY NET OPERATING INCOME	2020		2019		2020		2019
Net income attributable to Whitestone REIT	$	900	$	1,807	$	2,922	$	7,908
General and administrative expenses	5,860		5,597		15,604		16,514
Depreciation and amortization	7,171		6,789		21,112		19,865
Equity in earnings of real estate partnership	(196)		(524)		(752)		(1,480)
Interest expense	6,400		6,679		19,561		19,738
Interest, dividend and other investment income	(71)		(141)		(206)		(550)
Provision for income taxes	105		102		288		324
Gain on sale of property from discontinued operations, net	—		—		—		(701)
Management fee, net of related expenses	81		(14)		246		(64)
Loss on sale or disposal of assets and assets held for sale of continuing operations, net	18		—		882		115
NOI of real estate partnership (pro rata)	990		1,714		3,250		5,152
Net income attributable to noncontrolling interests	14		42		58		184
NOI	21,272		22,051		62,965		67,005
Non-Same Store NOI ^(1)^	(421)		16		(1,434)		116
NOI of real estate partnership (pro rata)	(990)		(1,714)		(3,250)		(5,152)
NOI less Non-Same Store NOI and NOI of real estate partnership (pro rata)	19,861		20,353		58,281		61,969
Same Store straight-line rent adjustments	(50)		(178)		640		(919)
Same Store amortization of above/below market rents	(148)		(226)		(589)		(690)
Same Store lease termination fees	(727)		(127)		(1,028)		(401)
Same Store NOI^(2)^	$	18,936	$	19,822	$	57,304	$	59,959

^(1)^ We define “Non-Same Store” as properties that have been acquired since the beginning of the period being compared and properties that have been sold, but not classified as discontinued operations. For purposes of comparing the three months ended September 30, 2020 to the three months ended September 30, 2019, Non-Same Store includes properties acquired between July 1, 2019 and September 30, 2020 and properties sold between July 1, 2019 and September 30, 2020, but not included in discontinued operations. For purposes of comparing the nine months ended September 30, 2020 to the nine months ended September 30, 2019, Non-Same Store includes properties acquired between January 1, 2019 and September 30, 2020 and properties sold between January 1, 2019 and September 30, 2020, but not included in discontinued operations.

^(2)^ We define “Same Store” as properties that have been owned during the entire period being compared. For purposes of comparing the three months ended September 30, 2020 to the three months ended September 30, 2019, Same Store includes properties owned before July 1, 2019 and not sold before September 30, 2020. For purposes of comparing the nine months ended September 30, 2020 to the nine months ended September 30, 2019, Same Store includes properties owned before January 1, 2019 and not sold before September 30, 2020.

Whitestone REIT and Subsidiaries

RECONCILIATION OF NON-GAAP MEASURES

(continued)

(in thousands)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION	2020		2019		2020		2019
Net income attributable to Whitestone REIT	$	900	$	1,807	$	2,922	$	7,908
Depreciation and amortization	7,171		6,789		21,112		19,865
Equity in earnings of real estate partnership	(196)		(524)		(752)		(1,480)
Interest expense	6,400		6,679		19,561		19,738
Provision for income taxes	105		102		288		324
Gain on sale of property from discontinued operations, net	—		—		—		(701)
Management fee, net of related expenses	81		(14)		246		(64)
Loss on sale or disposal of assets and assets held for sale of continuing operations, net	18		—		882		115
EBITDA adjustments for real estate partnership	804		1,651		2,690		4,900
Net income attributable to noncontrolling interests	14		42		58		184
EBITDA	$	15,297	$	16,532	$	47,007	$	50,789

Whitestone REIT and Subsidiaries

SAME STORE PROPERTY ANALYSIS

(in thousands)

	Three Months Ended September 30,
	2020		2019		Change		Percent Change
Same Store (51 properties, excluding development land)
Property revenues
Rental	$	28,060	$	29,368	$	(1,308)	(4)	%
Management, transaction and other fees	887		283		604		213	%
Total property revenues	28,947		29,651		(704)		(2)	%
Property expenses
Property operation and maintenance	4,649		4,888		(239)		(5)	%
Real estate taxes	4,437		4,410		27		1	%
Total property expenses	9,086		9,298		(212)		(2)	%
Total property revenues less total property expenses	19,861		20,353		(492)		(2)	%
Same Store straight-line rent adjustments	(50)		(178)		128		(72)	%
Same Store amortization of above/below market rents	(148)		(226)		78		(35)	%
Same Store lease termination fees	(727)		(127)		(600)		472	%
Same Store NOI ^(1)^	$	18,936	$	19,822	$	(886)	(4)	%

^(1)^For a reconciliation of Same Store NOI, see previous section “Reconciliation of Non-GAAP Measures.”

Whitestone REIT and Subsidiaries

SAME STORE PROPERTY ANALYSIS

(in thousands)

	Nine Months Ended September 30,
	2020		2019		Change		Percent Change
Same Store (51 properties, excluding development land)
Property revenues
Rental	$	83,673	$	87,527	$	(3,854)	(4)	%
Management, transaction and other fees	1,475		931		544		58	%
Total property revenues	85,148		88,458		(3,310)		(4)	%
Property expenses
Property operation and maintenance	13,895		14,015		(120)		(1)	%
Real estate taxes	12,972		12,474		498		4	%
Total property expenses	26,867		26,489		378		1	%
Total property revenues less total property expenses	58,281		61,969		(3,688)		(6)	%
Same Store straight-line rent adjustments	640		(919)		1,559		(170)	%
Same Store amortization of above/below market rents	(589)		(690)		101		(15)	%
Same Store lease termination fees	(1,028)		(401)		(627)		156	%
Same Store NOI ^(1)^	$	57,304	$	59,959	$	(2,655)	(4)	%

^(1)^For a reconciliation of Same Store NOI, see previous section “Reconciliation of Non-GAAP Measures.”

Whitestone REIT and Subsidiaries

OTHER FINANCIAL INFORMATION

(in thousands, except number of properties and employees)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2020		2019		2020		2019
Other Financial Information:
Tenant improvements ^(1) (2)^	$	1,279	$	1,422	$	2,264	$	2,690
Leasing commissions ^(1) (2)^	$	221	$	820	$	957	$	2,191
Maintenance capital^(1)^	$	933	$	1,355	$	2,843	$	3,833
Scheduled debt principal payments^(1)^	$	481	$	516	$	1,441	$	1,545
Straight-line rent income^(1)^	$	51	$	249	$	(674)	$	1,155
Market rent amortization income from acquired leases^(1)^	$	147	$	215	$	586	$	656
Non-cash share-based compensation expense^(1)^	$	1,645	$	1,719	$	4,167	$	4,770
Non-real estate depreciation and amortization^(1)^	$	45	$	70	$	168	$	208
Amortization of loan fees^(1)^	$	282	$	300	$	851	$	875
Undepreciated value of unencumbered properties	$	824,628	$	765,381	$	824,628	$	765,381
Number of unencumbered properties	51		49		51		49
Full time employees	85		103		85		103

^(1)^ Includes pro-rata share attributable to real estate partnership.

^(2)^ Does not include first generation costs needed for new acquisitions, development or redevelopment of a property to bring the property to operating standards for its intended use.

Whitestone REIT and Subsidiaries

MARKET CAPITALIZATION AND SELECTED RATIOS

(in thousands, except per share amounts and percentages)

	As of September 30, 2020
MARKET CAPITALIZATION:	Percent of Total Equity		Total Market Capitalization		Percent of Total Market Capitalization
Equity Capitalization:
Common shares outstanding	98.2	%	42,353
Operating partnership units outstanding	1.8	%	776
Total	100.0	%	43,129
Market price of common shares as of
September 30, 2020			$	6.00
Total equity capitalization			258,774		29	%
Debt Capitalization:
Outstanding debt			$	667,547
Less: Cash and cash equivalents			(38,990)
Total debt capitalization			628,557		71	%
Total Market Capitalization as of
September 30, 2020			$	887,331	100	%
SELECTED RATIOS:
---	---	---	---	---	---	---	---	---
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
INTEREST COVERAGE RATIO	2020		2019		2020		2019
EBITDA/Interest Expense
EBITDA^(1)^	$	15,297	$	16,532	$	47,007	$	50,789
Interest expense	6,400		6,679		19,561		19,738
Pro rata share of interest expense from real estate partnership	167		420		490		1,263
Less: amortization of loan fees, including pro rata share from real estate partnership	(282)		(300)		(851)		(875)
Interest expense, excluding amortization of loan fees	6,285		6,799		19,200		20,126
Ratio of EBITDA to interest expense	2.4		2.4		2.4		2.5

^(1)^For a reconciliation of EBITDA, see previous section “Reconciliation of Non-GAAP Measures.”

Whitestone REIT and Subsidiaries

MARKET CAPITALIZATION AND SELECTED RATIOS

(continued)

(in thousands, except per share amounts and percentages)

LEVERAGE RATIO	September 30,
	2020			2019
Debt/Undepreciated Book Value
Outstanding debt	$	667,277		$	622,741
Less: Cash	(38,990)			(5,539)
Add: Proportional share of net debt of real estate partnership	8,766			31,311
Outstanding debt after cash	$	637,053		$	648,513
Undepreciated real estate assets	$	1,104,963		$	1,062,283
Add: Proportional share of real estate from unconsolidated partnership	45,787			64,629
Undepreciated real estate assets	$	1,150,750		$	1,126,912
Ratio of debt to real estate assets	55		%	58		%
	Three Months Ended						Nine Months Ended
---	---	---	---	---	---	---	---	---
	September 30,						September 30,
	2020		2019		2020		2019
Debt/EBITDA Ratio
Outstanding debt	$	667,277	$	622,741	$	667,277	$	622,741
Less: Cash	(38,990)		(5,539)		(38,990)		(5,539)
Add: Proportional share of net debt of unconsolidated real estate partnership	8,766		31,311		8,766		31,311
Total Net Debt	$	637,053	$	648,513	$	637,053	$	648,513
EBITDA	$	15,297	$	16,532	$	47,007	$	50,789
Share based compensation	1,645		1,719		4,167		4,770
EBITDA, adjusted	$	16,942	$	18,251	$	51,174	$	55,559
Pro forma annualized EBITDA, adjusted	$	67,768	$	73,004	$	68,232	$	74,079
Ratio of debt to pro forma EBITDA, adjusted	9.4		8.9		9.3		8.8

Whitestone REIT and Subsidiaries

SUMMARY OF OUTSTANDING DEBT AND DEBT MATURITIES

TOTAL OUTSTANDING DEBT

(in thousands)

Description	September 30, 2020		December 31, 2019
Fixed rate notes
$10.5 million, 4.85% Note, due September 24, 2020 ^(1)^	$	—	$	9,260
$100.0 million, 1.73% plus 1.35% to 1.90% Note, due October 30, 2022 ^(2)^	100,000		100,000
$165.0 million, 2.24% plus 1.35% to 1.90% Note, due January 31, 2024 ^(3)^	165,000		165,000
$80.0 million, 3.72% Note, due June 1, 2027	80,000		80,000
$19.0 million 4.15% Note, due December 1, 2024	18,768		19,000
$20.2 million 4.28% Note, due June 6, 2023	18,323		18,616
$14.0 million 4.34% Note, due September 11, 2024	13,300		13,482
$14.3 million 4.34% Note, due September 11, 2024	14,073		14,243
$15.1 million 4.99% Note, due January 6, 2024	14,228		14,409
$2.6 million 5.46% Note, due October 1, 2023	2,351		2,386
$50.0 million, 5.09% Note, due March 22, 2029	50,000		50,000
$50.0 million, 5.17% Note, due March 22, 2029	50,000		50,000
$1.7 million 1.00% Note, due May 6, 2022	1,734		—
$1.1 million 4.53% Note, due November 28, 2020	270		—
Floating rate notes
Unsecured line of credit, LIBOR plus 1.40% to 1.90%, due January 31, 2023	139,500		109,500
Total notes payable principal	667,547		645,896
Less deferred financing costs, net of accumulated amortization	(1,031)		(1,197)
Total notes payable	$	666,516	$	644,699

^(1)^ Promissory note includes an interest rate swap that fixed the interest rate at 3.55% for the duration of the term through September 24, 2018 and 4.85% beginning September 25, 2018 through September 24, 2020. The promissory note was paid off in September 2020.

^(2)^ Promissory note includes an interest rate swap that fixed the LIBOR portion of the interest rate at 1.73%.

^(3)^ Promissory note includes an interest rate swap that fixed the LIBOR portion of the interest rate at an average rate of 2.24% for the duration of the term through January 31, 2024.

SCHEDULE OF DEBT MATURITIES AS OF SEPTEMBER 30, 2020

(in thousands)

Year	Amount Due
2020 (remaining)	$	964
2021	2,762
2022	102,170
2023	167,363
2024	228,573
Thereafter	165,715
Total	$	667,547

Whitestone REIT and Subsidiaries

SUMMARY OF OCCUPANCY AND TOP TENANTS

	Gross Leasable Area as of	Occupancy % as of
	September 30,	September 30,		June 30,		March 31,		December 31,
Community Centered Properties^®^	2020	2020		2020		2020		2019
Whitestone	4,953,571	89	%	89	%	90	%	90	%
Unconsolidated real estate partnership	926,798	62	%	67	%	69	%	75	%

Whitestone REIT and Subsidiaries

SUMMARY OF OCCUPANCY AND TOP TENANTS

(continued)

Tenant Name	Location	Annualized Rental Revenue <br>(in thousands)		Percentage of Total Annualized Base Rental Revenues ^(1)^		Initial Lease Date	Year Expiring
Safeway Stores Incorporated ^(2)^	Austin, Houston and Phoenix	$	2,419	2.8	%	11/14/1982, 5/8/1991, 7/1/2000, 4/1/2014, 4/1/2014 and 10/19/16	2021, 2021, 2022, 2024, 2025 and 2034
Whole Foods Market	Houston	2,247		2.6	%	9/3/2014	2035
Frost Bank	Houston	1,948		2.3	%	7/1/2014	2024
Newmark Real Estate of Houston LLC	Houston	1,029		1.2	%	10/1/2015	2026
Verizon Wireless^(3)^	Houston and Phoenix	948		1.1	%	8/16/1994, 2/1/2004, 5/10/2004, 1/27/2006 and 5/1/2014	2020, 2022, 2023, 2024 and 2024
Walgreens & Co. ^(4)^	Houston and Phoenix	946		1.1	%	11/14/1982, 11/2/1987, 8/24/1996 and 11/3/1996	2022, 2027, 2049 and 2056
Bashas' Inc. ^(5)^	Phoenix	848		1.0	%	10/9/2004 and 4/1/2009	2024 and 2029
Alamo Drafthouse Cinema	Austin	690		0.8	%	2/1/2012	2027
Dollar Tree ^(6)^	Houston and Phoenix	635		0.7	%	8/10/1999, 6/29/2001, 11/8/2009, 12/17/2009, and 5/21/2013	2021, 2023, 2025, 2025 and 2027
Wells Fargo & Company ^(7)^	Phoenix	578		0.7	%	10/24/1996 and 4/16/1999	2022 and 2023
Kroger Co.	Dallas	483		0.6	%	12/15/2000	2022
Ruth's Chris Steak House Inc.	Phoenix	466		0.5	%	1/1/1991	2030
Regus Corporation	Houston	451		0.5	%	5/23/14	2025
Paul's Ace Hardware	Phoenix	427		0.5	%	3/1/2008	2023
Original Ninfas LP	Houston	403		0.5	%	8/29/2018	2029
		$	14,518	16.9	%

^(1)^Annualized Base Rental Revenues represents the monthly base rent as of September 30, 2020 for each applicable tenant multiplied by 12.

^(2)^As of September 30, 2020, we had six leases with the same tenant occupying space at properties located in Phoenix, Houston and Austin. The annualized rental revenue for the lease that commenced on April 1, 2014, and is scheduled to expire in 2034, was $1,047,000, which represents approximately 1.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on April 1, 2014, and is scheduled to expire in 2024, was $42,000, which represents less than 0.1% of our annualized base rental revenue. The annualized rental revenue for the lease that commenced on May 8, 1991, and is scheduled to expire in 2021, was $344,000, which represents approximately 0.4% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on July 1, 2000, and is scheduled to expire in 2025, was $353,000, which represents approximately 0.4% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on November 14, 1982, and is scheduled to expire in

2022, was $318,000, which represents approximately 0.4% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on October 19, 2016, and is scheduled to expire in 2021, was $315,000, which represents approximately 0.4% of our total annualized base rental revenue.

^(3)^ As of September 30, 2020, we had five leases with the same tenant occupying space at properties located in Phoenix and Houston. The annualized rental revenue for the lease that commenced on August 16, 1994, and is scheduled to expire in 2020, was $21,000, which represents less than 0.1% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on January 27, 2006, and is scheduled to expire in 2023, was $134,000, which represents approximately 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on February 1, 2004, and is scheduled to expire in 2024, was $38,000, which represents less than 0.1% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on May 1, 2014, and is scheduled to expire in 2024, was $749,000, which represents approximately 0.9% of our total annualized rental revenue. The annualized rental revenue for the lease that commenced on May 10, 2004, and is scheduled to expire in 2022, was $6,000, which represents less than 0.1% of our total annualized base rental revenue.

^(4)^ As of September 30, 2020, we had four leases with the same tenant occupying space at properties located in Phoenix and Houston. The annualized rental revenue for the lease that commenced on November 3, 1996, and is scheduled to expire in 2049, was $279,000, which represents approximately 0.3% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on November 2, 1987, and is scheduled to expire in 2027, was $189,000, which represents approximately 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on November 14, 1982, and is scheduled to expire in 2022, was $181,000, which represents approximately 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on August 24, 1996, and is scheduled to expire in 2056, was $298,000, which represents approximately 0.3% of our total annualized rental revenue.

^(5)^ As of September 30, 2020, we had two leases with the same tenant occupying space at properties located in Phoenix. The annualized rental revenue for the lease that commenced on October 9, 2004, and is scheduled to expire in 2024, was $119,000, which represents approximately 0.1% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on April 1, 2009, and is scheduled to expire in 2029, was $729,000, which represents approximately 0.8% of our total annualized base rental revenue.

^(6)^ As of September 30, 2020, we had five leases with the same tenant occupying space at properties in Houston and Phoenix. The annualized rental revenue for the lease that commenced on August 10, 1999, and is scheduled to expire in 2025, was $88,000, which represents approximately 0.1% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on December 17, 2009, and is scheduled to expire in 2025, was $118,000, which represents approximately 0.1% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on June 29, 2001, and is scheduled to expire in 2021, was $169,000, which represents approximately 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on May 21, 2013, and is scheduled to expire in 2023, was $110,000, which represents approximately 0.1% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on November 8, 2009, and is scheduled to expire in 2027, was $151,000, which represents approximately 0.2% of our total annualized base rental revenue.

^(7)^ As of September 30, 2020, we had two leases with the same tenant occupying space at properties located in Phoenix. The annualized rental revenue for the lease that commenced on October 24, 1996, and is scheduled to expire in 2022, was $131,000, which represents approximately 0.2% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on April 16, 1999, and is scheduled to expire in 2023, was $447,000, which represents approximately 0.5% of our total annualized base rental revenue.

Whitestone REIT and Subsidiaries

COVID-19 - STATUS OF TENANTS

	% of Leased SF	% of ABR	Q3 2020 Cash Payments Received %^(1)^	October Cash Payments Received %^(1)^
Restaurants and Food Service	18%	23%	85%	90%
Grocery	14%	9%	98%	99%
Financial Services	6%	9%	97%	97%
Salons	6%	8%	88%	88%
Medical and Dental	7%	7%	94%	89%
Non Retail	4%	6%	95%	86%
General Retail	7%	5%	96%	90%
Apparel	5%	4%	81%	90%
Home Decor & Improvement	7%	4%	94%	95%
Education	5%	4%	73%	90%
Fitness	5%	4%	79%	82%
Local Services	2%	3%	90%	89%
Wireless	1%	2%	97%	96%
Off-Price	4%	2%	100%	100%
Pet Supply & Services	2%	2%	100%	98%
Entertainment	2%	2%	51%	30%
Pharmacy & Nutrition	2%	2%	100%	100%
Sporting Goods	1%	1%	100%	99%
Postal Services	1%	1%	100%	98%
Automotive Supply & Services	1%	1%	100%	100%
Other	-	1%	86%	91%
Total	100%	100%	90%	90%

^(1)^ Collections received through October 26, 2020 that are for contractual rent (base rent and expense reimbursement) in the respective period

Whitestone REIT and Subsidiaries

SUMMARY OF LEASING ACTIVITY

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2020		2019		2020		2019
RENEWALS
Number of Leases	46		42		145		153
Total Square Feet ^(1)^	172,174		122,615		477,341		468,806
Average Square Feet	3,743		2,919		3,292		3,064
Total Lease Value	$	9,679,000	$	9,368,000	$	35,357,000	$	37,115,000
NEW LEASES
Number of Leases	32		26		77		88
Total Square Feet ^(1)^	85,196		53,099		181,413		190,328
Average Square Feet	2,662		2,042		2,356		2,163
Total Lease Value	$	9,861,000	$	9,260,000	$	21,131,000	$	23,483,000
TOTAL LEASES
Number of Leases	78		68		222		241
Total Square Feet ^(1)^	257,370		175,714		658,754		659,134
Average Square Feet	3,300		2,584		2,967		2,735
Total Lease Value	$	19,540,000	$	18,628,000	$	56,488,000	$	60,598,000

^(1)^Represents the square footage as the result of new, renewal, expansion and contraction leases.

Whitestone REIT and Subsidiaries

SUMMARY OF LEASING ACTIVITY

Type	Number of Leases Signed	Lease Value Signed		GLA Signed	Weighted Average Lease Term ^(2)^	TI and Incentives ^(3)^		TI and Incentives Per Sq. Ft.		Contractual Rent Per Sq. Ft. ^(4)^			Prior Contractual Rent Per Sq. Ft. ^(5)^		Annual Increase (Decrease) in Contractual Rent		Cash Basis Increase (Decrease) Over Prior Rent		Annual Increase (Decrease) in Straight-lined Rent		Straight-lined Basis Increase (Decrease) Over Prior Rent
Comparable:^(1)^
Comparable Total Leases:
3rd Quarter 2020	63	$	15,059,079	216,564	3.8	$	723,072	$	3.34	$	16.35		$	15.83	$	107,566	3.3	%	$	344,848	11.0	%
2nd Quarter 2020	54	13,620,242		162,729	4.2	418,007		2.57		18.66			18.30		59,644		2.0	%	315,893		11.3	%
1st Quarter 2020	63	16,883,447		179,014	4.4	447,816		2.50		20.67			20.26		73,787		2.0	%	256,566		7.3	%
4th Quarter 2019	58	22,877,760		261,520	5.1	446,371		1.71		16.16			15.48		177,777		4.4	%	553,623		14.4	%
Total - 12 months	238	$	68,440,528	819,827	4.4	$	2,035,266	$	2.48	$	17.69		$	17.18	$	418,774	3.0	%	$	1,470,930	11.1	%
Comparable New Leases:
3rd Quarter 2020	18	$	5,437,366	45,158	4.8	$	630,803	$	13.97	$	22.39		$	21.80	$	26,323	2.7	%	$	25,687	2.9	%
2nd Quarter 2020	11	3,864,386		25,792	5.9	227,075		8.80		22.65			24.05		(35,900)		(5.8)	%	19,331		3.4	%
1st Quarter 2020	8	1,279,066		12,579	4.6	107,093		8.51		22.10			24.99		(36,405)		(11.6)	%	(11,095)		(3.8)	%
4th Quarter 2019	6	852,078		10,270	5.0	53,557		5.21		16.81			11.05		59,212		52.1	%	57,623		50.0	%
Total - 12 months	43	$	11,432,896	93,799	5.1	$	1,018,528	$	10.86	$	21.81		$	21.68	$	13,230	0.6	%	$	91,546	4.9	%
Comparable Renewal Leases:
3rd Quarter 2020	45	$	9,621,713	171,406	3.5	$	92,269	$	0.54	$	14.76		$	14.28	$	81,243	3.4	%	$	319,161	13.9	%
2nd Quarter 2020	43	9,755,856		136,937	3.9	190,932		1.39		17.91			17.21		95,544		4.1	%	296,562		13.5	%
1st Quarter 2020	55	15,604,381		166,435	4.3	340,723		2.05		20.57			19.90		110,192		3.4	%	267,661		8.4	%
4th Quarter 2019	52	22,025,682		251,250	5.1	392,814		1.56		16.14			15.67		118,565		3.0	%	496,000		13.3	%
Total - 12 months	195	$	57,007,632	726,028	4.4	$	1,016,738	$	1.40	$	17.16	1.00	$	16.60	$	405,544	3.4	%	$	1,379,384	12.1	%

Whitestone REIT and Subsidiaries

SUMMARY OF LEASING ACTIVITY

(continued)

Type	Number of Leases Signed	Lease Value Signed		GLA Signed	Weighted Average Lease Term ^(2)^	TI and Incentives ^(3)^		TI and Incentives per Sq. Ft.		Contractual Rent Per Sq. Ft. ^(4)^
Total:
New & Renewal
3rd Quarter 2020	78	$	19,540,109	257,370	4.0	$	1,002,715	$	3.90	$	16.85
2nd Quarter 2020	64	14,993,431		180,245	4.4	528,868		2.93		18.49
1st Quarter 2020	80	21,955,258		221,139	5.2	999,160		4.52		20.85
4th Quarter 2019	76	27,445,320		293,646	3.5	889,152		3.03		17.06
Total - 12 months	298	$	83,934,118	952,400	4.5	$	3,419,895	$	3.59	$	18.15
New
3rd Quarter 2020	32	$	9,861,214	85,196	4.8	$	906,788	$	10.64	$	20.98
2nd Quarter 2020	21	5,237,575		43,308	5.4	337,936		7.80		20.33
1st Quarter 2020	24	6,032,328		52,909	4.4	583,553		11.03		20.58
4th Quarter 2019	21	4,744,807		36,206	5.3	461,538		12.75		22.46
Total - 12 months	98	$	25,875,924	217,619	4.9	$	2,289,815	$	10.52	$	21.00
Renewal
3rd Quarter 2020	46	$	9,678,895	172,174	3.5	$	95,927	$	0.56	$	14.81
2nd Quarter 2020	43	9,755,856		136,937	3.9	190,932		1.39		17.91
1st Quarter 2020	56	15,922,930		168,230	4.3	415,607		2.47		20.93
4th Quarter 2019	55	22,700,513		257,440	5.1	427,614		1.66		16.30
Total - 12 months	200	$	58,058,194	734,781	4.4	$	1,130,080	$	1.54	$	17.31

^(1)^ Comparable leases represent leases signed on spaces for which there was a former tenant within the last twelve months and the new or renewal square footage was within 25% of the expired square footage.

^(2)^ Weighted average lease term is determined on the basis of square footage.

^(3)^ Estimated amount per signed lease. Actual cost of construction may vary.

^(4)^ Contractual rent represents contractual minimum rent under the new lease for the first month, excluding concessions.

^(5)^ Prior contractual rent represents contractual minimum rent under the prior lease for the final month.

Whitestone REIT and Subsidiaries

LEASE EXPIRATIONS^(1)^

					Annualized Base Rent^(2)^
		Gross Leasable Area					as of September 30, 2020
Year	Number of<br>Leases	Square Feet	Percent<br>of Gross Leasable Area		Amount<br>(in thousands)		Percent of<br>Total		Per Square Foot
2020	221	286,109	5.8	%	$	5,352	6.2	%	$	18.71
2021	272	636,297	12.8	%	11,651		13.5	%	18.31
2022	199	655,432	13.2	%	12,180		14.2	%	18.58
2023	186	572,400	11.6	%	11,515		13.4	%	20.12
2024	178	667,944	13.5	%	13,930		16.2	%	20.86
2025	166	641,988	13.0	%	11,005		12.8	%	17.14
2026	38	226,572	4.6	%	4,231		4.9	%	18.67
2027	40	219,142	4.4	%	4,379		5.1	%	19.98
2028	23	111,961	2.3	%	2,478		2.9	%	22.13
2029	21	163,262	3.3	%	2,991		3.5	%	18.32
Total	1,344	4,181,107	84.5	%	$	79,712	92.7	%	$	19.06

^(1)^Lease expirations table reflects rents in place as of September 30, 2020, and does not include option periods.

^(2)^Annualized Base Rent represents the monthly base rent as of September 30, 2020 for each tenant multiplied by 12.

Whitestone REIT and Subsidiaries

Property Details

As of September 30, 2020

Community Name	Location	Year Built/<br>Renovated	Gross Leasable<br>Square Feet	Percent<br>Occupied at<br>9/30/2020		Annualized Base<br><br>Rental Revenue<br><br>(in thousands) ^(1)^		Average<br><br>Base Rental<br><br>Revenue Per<br><br>Sq. Ft. ^(2)^		Average Net Effective Annual Base Rent Per Leased Sq. Ft.^(3)^
Whitestone Properties:
Ahwatukee Plaza	Phoenix	1979	72,650	82	%	$	695	$	11.67	$	11.78
Anthem Marketplace	Phoenix	2000	113,293	95	%	1,581		14.69		15.25
Anthem Marketplace Phase II	Phoenix	2019	6,853	100	%	228		33.27		33.85
Bissonnet Beltway	Houston	1978	29,205	82	%	345		14.41		15.20
BLVD Place	Houston	2014	216,944	98	%	8,941		42.05		43.15
The Citadel	Phoenix	2013	28,547	95	%	463		17.07		17.11
City View Village	San Antonio	2005	17,870	100	%	527		29.49		29.16
Davenport Village	Austin	1999	128,934	90	%	3,050		26.28		24.70
Desert Canyon	Phoenix	2000	62,533	81	%	697		13.76		13.43
Eldorado Plaza	Dallas	2004	219,287	90	%	2,923		14.81		15.06
Fountain Hills	Phoenix	2009	111,289	83	%	1,524		16.50		15.87
Fountain Square	Phoenix	1986	118,209	84	%	1,663		16.75		19.10
Fulton Ranch Towne Center	Phoenix	2005	120,575	94	%	1,922		16.96		16.68
Gilbert Tuscany Village	Phoenix	2009	49,415	100	%	949		19.20		20.14
Gilbert Tuscany Village Hard Corner	Phoenix	2009	14,603	100	%	124		8.49		8.90
Heritage Trace Plaza	Dallas	2006	70,431	98	%	1,549		22.44		22.05
Headquarters Village	Dallas	2009	89,134	80	%	2,196		30.80		28.68
Keller Place	Dallas	2001	93,541	98	%	1,060		11.56		11.43
Kempwood Plaza	Houston	1974	91,302	92	%	1,189		14.16		13.87
La Mirada	Phoenix	1997	147,209	89	%	3,031		23.13		22.96
Lion Square	Houston	2014	117,592	92	%	1,607		14.85		13.13
The Marketplace at Central	Phoenix	2012	111,130	99	%	1,071		9.73		9.65
Market Street at DC Ranch	Phoenix	2003	244,888	94	%	4,747		20.62		19.39
Mercado at Scottsdale Ranch	Phoenix	1987	118,730	85	%	1,527		15.13		16.24
Paradise Plaza	Phoenix	1983	125,898	93	%	1,575		13.45		13.04
Parkside Village North	Austin	2005	27,045	96	%	824		31.74		37.40
Parkside Village South	Austin	2012	90,101	91	%	2,147		26.19		27.23
Pima Norte	Phoenix	2007	35,110	63	%	355		16.05		18.04
Pinnacle of Scottsdale	Phoenix	1991	113,108	96	%	2,331		21.47		22.16
Pinnacle Phase II	Phoenix	2017	27,063	100	%	767		28.34		26.20
The Promenade at Fulton Ranch	Phoenix	2007	98,792	83	%	1,142		13.93		13.83
Providence	Houston	1980	90,327	96	%	1,031		11.89		12.33
Quinlan Crossing	Austin	2012	109,892	95	%	2,281		21.85		22.79
Seville	Phoenix	1990	90,042	88	%	2,429		30.65		30.58
Shaver	Houston	1978	21,926	91	%	324		16.24		16.24
Shops at Pecos Ranch	Phoenix	2009	78,767	79	%	1,692		27.19		26.45
Shops at Starwood	Dallas	2006	55,385	85	%	1,429		30.35		27.64
The Shops at Williams Trace	Houston	1985	132,991	91	%	1,933		15.97		15.01
South Richey	Houston	1980	69,928	98	%	723		10.55		10.67
Spoerlein Commons	Chicago	1987	41,455	81	%	680		20.25		20.79
Starwood Phase II	Dallas	2016	35,351	80	%	1,042		36.84		36.35
The Strand at Huebner Oaks	San Antonio	2000	73,920	96	%	1,602		22.58		22.27
SugarPark Plaza	Houston	1974	95,032	100	%	1,150		12.10		13.31
Sunridge	Houston	1979	49,359	84	%	463		11.17		11.70
Sunset at Pinnacle Peak	Phoenix	2000	41,530	90	%	616		16.48		17.98
Terravita Marketplace	Phoenix	1997	102,733	56	%	1,159		20.15		20.68
Town Park	Houston	1978	43,526	100	%	1,027		23.60		22.56
Village Square at Dana Park	Phoenix	2009	323,026	81	%	5,675		21.69		20.94
Westchase	Houston	1978	50,332	73	%	583		15.87		15.49
Williams Trace Plaza	Houston	1983	129,222	92	%	1,821		15.32		15.11
Windsor Park	San Antonio	2012	196,458	97	%	1,920		10.08		9.91
Woodlake Plaza	Houston	1974	106,169	62	%	1,019		15.48		15.97
Total/Weighted Average - Whitestone Properties			4,848,652	89	%	83,349		19.31		19.26
Development Properties:
Las Colinas Village	Dallas	2000	104,919	80	%	2,299		27.39		27.82
Total/Weighted Average - Development Properties^(4)^			104,919	80	%	2,299		27.39		27.82
Land Held for Development:
BLVD Phase II-B	Houston	N/A	—	—		—		—		—
Dana Park Development	Phoenix	N/A	—	—		—		—		—
Eldorado Plaza Development	Dallas	N/A	—	—		—		—		—
Fountain Hills	Phoenix	N/A	—	—		—		—		—
Market Street at DC Ranch	Phoenix	N/A	—	—		—		—		—
Total/Weighted Average - Land Held For Development ^(5)^			—	—		—		—		—
Grand Total/Weighted Average - Whitestone Properties			4,953,571	89	%	$	85,648	$	19.43	$	19.38
Properties owned in Unconsolidated Real Estate Partnership (81.4% ownership):
9101 LBJ Freeway	Dallas	1985	125,874	50	%	$	921	$	14.63	$	15.41
Corporate Park Northwest	Houston	1981	174,359	76	%	1,845		13.92		13.70
Corporate Park Woodland II	Houston	2000	14,344	100	%	244		17.01		16.94
Holly Hall Industrial Park	Houston	1980	90,000	49	%	308		6.98		7.30
Holly Knight	Houston	1984	20,015	100	%	423		21.13		20.78
Interstate 10 Warehouse	Houston	1980	151,000	31	%	278		5.94		5.68
Uptown Tower	Dallas	1982	253,981	67	%	3,968		23.32		23.20
Westgate Service Center	Houston	1984	97,225	83	%	678		8.40		8.09
Total/Weighted Average - Unconsolidated Properties			926,798	62	%	$	8,665	$	15.08	$	15.03

^(1)^Calculated as the tenant’s actual September 30, 2020 base rent (defined as cash base rents including abatements) multiplied by 12. Excludes vacant space as of September 30, 2020. Because annualized base rental revenue is not derived from historical results that were accounted for in accordance with generally accepted accounting principles, historical results differ from the annualized amounts. Total abatements for leases in effect as of September 30, 2020 equaled approximately $136,000 for the month ended September 30, 2020.

^(2)^Calculated as annualized base rent divided by leased square feet as of September 30, 2020.

^(3)^Represents (i) the contractual base rent for leases in place as of September 30, 2020, adjusted to a straight-line basis to reflect changes in rental rates throughout the lease term and amortize free rent periods and abatements, but without regard to tenant improvement allowances and leasing commissions, divided by (ii) square footage under commenced leases of September 30, 2020.

^(4)^ Includes (i) new acquisitions, through the earlier of attainment of 90% occupancy or 18 months of ownership, and (ii) properties that are undergoing significant development, redevelopment or re-tenanting.

^(5)^ As of September 30, 2020, these parcels of land were held for development and, therefore, had no gross leasable area.