Whitestone Provides a 2020 Year-End Highlights Recap

Rhea-AI Summary

Whitestone REIT (NYSE: WSR) reported strong performance despite COVID-19 challenges. Fourth quarter rental collections reached 94%, the highest in the shopping center sector. The company achieved a foot traffic recovery rate of 80.4%, outperforming industry averages. Additionally, renewal leases saw a 9.8% increase, while occupancy held steady at 89%-90%. Whitestone also fully repaid $30 million in COVID-19 liquidity borrowings, enhancing its financial stability. The firm published its inaugural Corporate Responsibility & Sustainability Report, reflecting its commitment to community engagement.

Positive

• Fourth quarter cash rental collections at 94%, highest in sector.
• Foot traffic recovery rate of 80.4%, above industry average of 48%.
• Healthy renewal leasing spreads of 9.8% and new leases at 2.5%.
• Steady occupancy rate maintained at 89%-90% during the pandemic.
• Full repayment of $30 million in COVID-19 liquidity borrowings.

Negative

• None.

• Cash Rental Collections Consistently Ranking Near or At the Top of the Shopping Center Industry for FY2020 and Fourth Quarter Collections to Date of 94%
• Foot Traffic Recovery the Highest Ranking of All US Publicly-Traded Shopping Center REITs According to S&P Global Market Intelligence
• Full Debt Repayment of $30 Million COVID19 Liquidity Borrowings
• Healthy Renewal and New Leasing Spreads of 9.8% and 2.5%, Respectively
• Occupancy Holding Steady 89% - 90% Throughout the Pandemic
• Publication of its Inaugural Corporate Responsibility & Sustainability Report

HOUSTON, Dec. 29, 2020 (GLOBE NEWSWIRE) -- Whitestone REIT (NYSE: WSR) provides investors with a recap of positive developments despite the challenges the COVID19 Pandemic imposed on the broader economy.

Top Ranking Rental Collections⁽¹⁾⁽²⁾

	Fourth Quarter 2020		Third Quarter 2020		Second Quarter 2020
WSR % of Billed Recurring Rents Collected - Cash	94%		90%		81%
Peer % of Billed Recurring Rents Collected - Cash	n/a		87%		72%

^{(1)   Collection rates are calculated as the cash base rents and NNN payments received during the applicable quarter through December 24, 2020, divided by the contractual base rents and estimated NNN charges billed each quarter. Contractual base rents and NNN payments billed have not been adjusted for any COVID19 related rent relief.
(2)   Sources: Goldman Sachs (Peer group includes UBA, REG, FRT, AKR, WHLR, ROIC, WRI, BFS, UE, SITC, RPAI, CDR, BRX, KRG, KIM and RPT), Whitestone REIT}

Whitestone’s success in cash rental collections is attributed to its specialization in neighborhood centers catering to the essential services and needs of the local community, with 97% of its tenants open and operating (based on ABR) at the end of the Third Quarter 2020.

In addition, Whitestone operates in Texas and Arizona, less restrictive states that were quicker to reopen their economies relative to the rest of the US.
Whitestone’s consistent engagement with tenants to help support and protect their businesses included helping them apply for COVID19 CARES Act Relief Resources, including the Paycheck Protection Program (PPP loans), the U.S. Small Business Administration (SBA) Coronavirus Assistance program, and other resources.

#1 Ranking in Foot Traffic Recovery
Several studies show Whitestone centers recovered over 80% of its foot traffic due to people working from home and staying close to their community.

In a December 7th article, S&P Global Market Intelligence (S&P) ranked Whitestone first in year-over-year (YOY) recovery in Black Friday foot traffic. The analysis by S&P, which sourced data from AirSage, reveals that the foot traffic in Whitestone centers has recovered to 80.4% of the previous year’s foot traffic levels as compared to the overall public shopping center industry average of a 48% recovery.⁽¹⁾  

This article confirms an internal location intelligence analysis Whitestone recently performed using Placer.ai software on its own properties in a YOY comparison for the month of November in which the median recovery in foot traffic was 81% for the entire portfolio from the prior year.

As part of its “Big Data” Initiative, Whitestone employs the use of cutting-edge technologies for location intelligence to better understand who its consumers are, where they are going, what they like, and where they spend their time and money.

Leasing Spreads and Occupancy
Leasing spreads remain healthy with a weighted average increase of 9.8% in lease term average base rent on renewal leases signed during the year and 2.5% on new leases signed during the same period. Whitestone was able to achieve this by taking a very proactive approach to securing its revenue stream during COVID19. Occupancy remained steady in the 89% - 90% range. Both metrics are relatively consistent with pre-COVID19 levels. Nine months into the Pandemic, Whitestone has successfully defied the premature doomsday predictions for small business owners that were widely publicized in the early stages of the government-mandated shutdown orders seen in other parts of the country.

Full Repayment of COVID19 Liquidity Borrowings
The Company has repaid the full amount of the $30 million liquidity borrowings that was previously drawn on its unsecured credit facility on March 17^th 2020 as a precautionary measure to ensure liquidity for business operations. The Company repaid approximately $10 million in Q3 2020 and the remaining $20 million in December 2020.

The payoff of liquidity was from cash flow and cash on hand.

Whitestone’s Publishes its Inaugural Corporate Responsibility and Sustainability Report
Whitestone’s Corporate Responsibility and Sustainability Report is designed to help stakeholders better understand Whitestone’s commitment and efforts regarding environmental stewardship, social responsibility, strong corporate governance, and its ongoing response to the COVID19 global Pandemic.

Jim Mastandrea, Chairman and Chief Executive Officer commented, “As we reflect on the extraordinarily challenging year of 2020, our communities, tenants, and team members continue to exhibit remarkable resiliency and resourcefulness despite COVID19.”

Mr. Mastandrea continued, “Looking out to 2021, there is a significant shift towards entrepreneurs with a strong local presence. They were the quickest to adapt and pivot to market conditions. By being embedded locally, they truly know their community and that is evidenced by the foot traffic recovery data. It was the first place people returned when the restrictions were lifted. Also adding to the foot traffic, is the significant increase of people working from home. They are relying more heavily on the local provider to meet their needs and experiences than in the past. Another encouraging sign for 2021 is the increased migration of consumers to our local markets. We have known this for some time, but are now seeing an exponential increase of both companies and families migrating out of the tax-burdensome and regulation-heavy states, and into the high-growth, business-friendly confines of Texas and Arizona.”

Mr. Mastandrea concluded, “Early on we had to make difficult choices given the great uncertainty we were faced with. Despite that uncertainty, I am proud to say our team stayed engaged and focused throughout the year to support our communities and tenants. We’ve learned a lot, and we expect to be wiser and stronger going forward into 2021. We look forward to brighter, healthier and more prosperous days ahead for our communities, our tenants, and the Whitestone family.”

About Whitestone REIT
Whitestone is a community-centered shopping center REIT that acquires, owns, manages, develops and redevelops high-quality 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 member of the Sure Dividend Monthly Dividend Stock List 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: the Company's ability to meet its long-term goals, its assumptions regarding its earnings guidance, 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; 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 the impact of the Tax Cuts and Jobs Act of 2017; the success of the Company's real estate strategies and investment objectives; the Company's ability to continue to qualify as a REIT under the Internal Revenue Code of 1986, as amended; and other factors detailed in the Company's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10- Q and other documents the Company files with the Securities and Exchange Commission from time to time.

Contact Whitestone REIT:
Kevin Reed
Director of Investor Relations
(713) 435-2219
ir@whitestonereit.com

FAQ

What were Whitestone REIT's rental collection rates in Q4 2020?

Whitestone REIT reported cash rental collection rates of 94% in the fourth quarter of 2020.

How did foot traffic recovery at Whitestone REIT compare to the industry in 2020?

Whitestone REIT achieved a foot traffic recovery rate of 80.4%, significantly higher than the industry average of 48%.

What percentage increase did Whitestone REIT see in renewal leasing spreads?

Whitestone REIT reported a renewal leasing spread increase of 9.8%.

What was the occupancy rate for Whitestone REIT during the pandemic?

Occupancy for Whitestone REIT remained steady at 89%-90% throughout the pandemic.

Has Whitestone REIT fully repaid its COVID-19 liquidity borrowings?

Yes, Whitestone REIT has fully repaid the $30 million in liquidity borrowings related to COVID-19.