0001175535falsetrue00011755352020-10-262020-10-260001175535us-gaap:CommonStockMember2020-10-262020-10-260001175535us-gaap:PreferredStockMember2020-10-262020-10-26

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 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

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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.

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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.

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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 Title: Chief Financial Officer

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

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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.

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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.

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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

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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

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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

[email protected]

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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

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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

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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

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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)

10

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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

11

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Whitestone REIT and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS (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.

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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

13

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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

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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

15

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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

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CORPORATE PROFILE

NYSE: WSR

Whitestone REIT (NYSE: WSR) is a community-centered shopping center REIT that aquires, owns, manages,

Common Shares

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

58 Community Centers

creating local connections between consumers in the surrounding communities and a well-crafted mix of national,

5.0 million sq. ft. of gross

regional and local tenants that provide daily necessities, needed services, entertainment and experiences. Whitestone

leasable area

is a monthly dividend paying stock and has consistently paid dividends for over 15 years. Whitestone’s strong,

1,386 tenants

balanced and managed capital structure provides stability and flexibility for growth and positions Whitestone to

perform well through economic cycles.

6 Top Growth Markets

We focus on value creation, as we market, lease and manage our properties. We invest in properties that are or

Austin

can become Community Centered Properties® from which our tenants deliver needed services to the surrounding

Chicago

community. We focus on properties with smaller rental spaces that present opportunities for attractive returns.

Dallas-Fort Worth

Houston

Our strategic efforts target entrepreneurial, service-oriented tenants at each property who provide services to their

Phoenix

respective surrounding communities. Operations include an internal management structure providing cost-effective

San Antonio

services to locally-oriented, smaller space tenants. Multi-cultural community focus sets us apart from traditional

commercial real estate operators. We value diversity on our team and maintain in-house leasing, property

Fiscal Year End

management, marketing, construction and maintenance departments with culturally diverse and multi-lingual

12/31

associates who understand the particular needs of our tenants and neighborhoods.

Common Shares &

We have a diverse tenant base concentrated on service offerings such as specialty retail, grocery, restaurants,

Units Outstanding*:

medical, educational and financial services and entertainment. These tenants tend to occupy smaller spaces (less

Common Shares: 42.4 million

than 3,000 square feet) and, as of September 30, 2020, provided a 48% premium rental rate compared to our larger

Operating Partnership Units:

space tenants. The largest of our 1,386 tenants at our wholly owned properties comprised only 2.8% of our

0.8 million

annualized base rental revenues for the three months ended September 30, 2020.

Distribution (per share / unit)*:

Quarter: $ 0.1050

Investor Relations:

Annualized: $ 0.42

Whitestone REIT

ICR Inc.

Dividend Yield: 6.6%**

Kevin Reed, Director of Investor Relations

Brad Cohen

2600 South Gessner, Suite 500, Houston, Texas 77063

203.682.8211

Board of Trustees:

713.435.2219 email: [email protected]

Nandita V. Berry

website: www.whitestonereit.com

Jeffrey A. Jones

Paul T. Lambert

Analyst Coverage:

Jack L. Mahaffey

B. Riley FBR

JMP Securities

Maxim Group

Ladenburg Thalmann

James C. Mastandrea

Craig Kucera

Aaron Hecht

Michael Diana

John J. Massocca

David F. Taylor

540.277.3366

415.835.3963

212.895.3641

212.409.2543

Trustee Emeritus:

[email protected]

[email protected]

[email protected]

[email protected]

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.

We are followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding our performance made by these analysts are theirs alone and do not represent opinions, forecasts or predictions of our management. We do not by our reference above or distribution imply our endorsement of or concurrence with such information, conclusions or recommendations.

1

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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

2

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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.

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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.

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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

5

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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

6

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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

[email protected]

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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

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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

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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

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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)

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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

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Whitestone REIT and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS (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.

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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

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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

15

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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.”

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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.”

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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.

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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.”

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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

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 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

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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		%

 

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Whitestone REIT and Subsidiaries

SUMMARY OF OCCUPANCY AND TOP TENANTS

(continued)

Tenant Name						Location						Annualized Rental Revenue (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

23

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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.

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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

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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.

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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		%

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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.

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Whitestone REIT and Subsidiaries

LEASE EXPIRATIONS⁽¹⁾

																								Annualized Base Rent(2)
												Gross Leasable Area																		as of September 30, 2020
Year						Number of Leases						Square Feet						Percent of Gross Leasable Area						Amount (in thousands)						Percent of 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.

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Whitestone REIT and Subsidiaries

Property Details

As of September 30, 2020

 

Community Name						Location						Year Built/ Renovated						Gross Leasable Square Feet						Percent Occupied at 9/30/2020						Annualized Base Rental Revenue  (in thousands) (1)						Average Base Rental Revenue Per 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.

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