HOUSTON--(EON: Enhanced Online News)--Whitestone REIT (NYSE: WSR – “Whitestone” or the “Company”), a real estate investment trust that acquires, owns and operates Community Centered PropertiesTM, today reported its portfolio occupancy and leasing highlights for the third quarter of 2013. Total occupancy as of September 30, 2013 was 85.0%, up 40 basis points from September 30, 2012, and down 60 basis points from June 30, 2013.
“Our development department has commenced plans to reposition, redevelop and expand four of our existing Community Centers. These initiatives, in the short run, will cause some volatility in quarterly occupancy rates as we vacate certain spaces, refurbish them, and then re-lease them at higher rents.”
During the third quarter of 2013, the leasing team signed 98 leases totaling 260,371 square feet in new, expansion, and renewal leases. The average lease size was 2,657 square feet, consistent with Whitestone’s business model focused on small, service based tenants. For the third quarter of 2013, total lease value added was $13.0 million, up 69% from $7.7 million from the third quarter of 2012. For the nine months ended September 30, 3013, total lease value added was $33.4 million, up 40% when compared to the same period for 2012.
Subsequent to the end of the third quarter of 2013, Whitestone reached an agreement, resolving a year-long co-tenancy dispute with an existing tenant that occupies an aggregate of 54,000 square feet in Whitestone’s Phoenix and Houston markets. The resolution of the dispute will result in the tenant returning to market rental rates and allowing Whitestone to add two high-quality tenants, who will occupy approximately 65,000 square feet in its centers. The two new tenants expect to take occupancy by year end. The impact of this settlement is expected to result in incremental annual revenue of approximately $850,000 and $1.1 million in 2014 and 2015, respectively. Approximately $75,000 from this settlement is expected to be realized in the fourth quarter of 2013.
James C. Mastandrea, Whitestone’s Chairman and Chief Executive Officer, said, “We continue to be confident with our value-add growth strategy and pleased with the progress we’ve made. Our accomplishments during the first nine months of the year are beginning to come to fruition.” Mastandrea added, “Our development department has commenced plans to reposition, redevelop and expand four of our existing Community Centers. These initiatives, in the short run, will cause some volatility in quarterly occupancy rates as we vacate certain spaces, refurbish them, and then re-lease them at higher rents.” Mastandrea concluded, “As of the end of the quarter, we wholly own and operate 55 Community Center Properties and, within our base of approximately 1,200 tenants, no single tenant can impact our revenues more than 1.6% if they were to vacate. This diversification is a built-in protection against a significant drop in cash flow, thus giving us continued confidence in ability to increase total Funds From Operations (FFO), and FFO per share.”
About Whitestone REIT
Whitestone REIT (NYSE: WSR) is a fully integrated real estate investment trust that owns, operates and redevelops Community Centered PropertiesTM. Whitestone focuses on value creation in its community centers, concentrating on local service-oriented, smaller space tenants (less than 3,000 square feet). Whitestone has a diversified tenant base concentrated on service offerings including medical, education, casual dining, and convenience services. The largest of its approximate 1,200 tenants comprised less than 1.6% of its annualized base rental revenues as of June 30, 2013. Founded in 1998, the Company is internally managed with a portfolio of commercial properties in Texas, Arizona, and Illinois. For additional information about the Company, please visit www.whitestonereit.com. The Investor Relations section of the Company's website has links to Whitestone’s filings with the Securities and Exchange Commission, news releases, financial reports and investor newsletters.
Statements included herein that state the Company's or management's intentions, hopes, beliefs, expectations or predictions of the future are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, which by their nature, involve known and unknown risks and uncertainties. The Company's actual results, performance or achievements could differ materially from those expressed or implied by these statements. Reference is made to the Company's regulatory filings with the Securities and Exchange Commission for information or factors that may impact the Company's performance.