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Whitestone REIT Announces Operating Results For Fourth Quarter And Full Year 2011

Stock quotes in this article: WSR

Whitestone REIT (NYSE Amex: WSR - “Whitestone” or the “Company”), a fully integrated real estate company that owns, operates and re-develops Community Centered Properties TM, which are visibly located in established or developing culturally diverse neighborhoods, announced its financial results for the fourth quarter and year ended December 31, 2011.

“Whitestone's 2011 was a break-out growth year as we increased the acquisition pace of value-add Community Centered Properties and expanded our geographic footprint. We also delivered on our other growth initiatives: adding tenants to increase occupancy and launching several redevelopment projects to enhance the value of our core assets. Our Community Centered Property, small space business model differentiates us in our industry and continues to deliver strong upwardly trending operating results such as our record FFO-Core,” said James C. Mastandrea, Whitestone's Chairman and Chief Executive Officer. “In 2012, we are committed to further portfolio expansion via acquisitions, as well as internal growth resulting from our focus on occupancy and select redevelopment supported by our strong balance sheet.”

Highlights: Fourth Quarter 2011 Compared to Fourth Quarter 2010

During the year ended December 31, 2011, the Company deployed approximately $81 million towards acquisitions of value-add Community Centered Properties TM in its target markets, including $47 million in acquisitions that were completed in the fourth quarter, which contributed only partially to 2011 results.

Whitestone's 2010 results, except Funds From Operations (“FFO”)-Core, include in income a portion of an insurance settlement for damages to the Company's Houston communities from Hurricane Ike, which was $0.6 million, or $0.08 per diluted common share and operating partnership (“OP”) unit.

  • FFO-Core for the fourth quarter 2011 increased 55%, or approximately $1.1 million, to $3.1 million as compared to $2.0 million in the fourth quarter of 2010. FFO-Core per diluted common share and OP unit was $0.25, as compared to $0.28 per diluted common share and OP unit for the same period in 2010. FFO-Core per diluted common share and OP unit was impacted by the issuance of common shares in May 2011. FFO-Core excludes acquisition expenses of $339,000 and $35,000 in 2011 and 2010, respectively, and a gain from an insurance settlement of $558,000 in 2010.
  • FFO for the fourth quarter 2011 was $2.8 million, or $0.22 per diluted common share and OP unit, as compared to $2.6 million or $0.35 per diluted common share and OP unit for the fourth quarter 2010. The gain recognized from the insurance settlement included in 2010 FFO was $558,000, or $0.08 per diluted common share and OP unit.
  • Property net operating income (“NOI”) increased 31% to $6.4 million for the fourth quarter 2011 as compared to $4.9 million for the same period in 2010. The increase of $1.5 million is attributable to new acquisitions of $0.8 million and same stores of $0.7 million.
  • Net income attributable to Whitestone REIT was $556,000, or $0.05 per diluted common share for the fourth quarter 2011, compared to $545,000 or $0.10 per diluted common share for the same period in 2010.
  • The Company declared a quarterly cash distribution of $0.285 per common share and OP unit, to be paid in three equal installments of $0.095 in January, February and March 2012. The distribution rate has remained the same since the distribution paid on July 8, 2010. In February 2012, the Company also declared its second quarter cash distribution of $0.285 per common share and OP unit, to be paid in three equal installments of $0.095 in April, May and June 2012.

Highlights: Year 2011 Compared to Year 2010

  • FFO-Core increased 22%, or approximately $1.7 million, to $9.6 million for 2011 as compared to $7.9 million in 2010. FFO-Core per diluted common share and OP unit was $0.89 for 2011, as compared to $1.35 per diluted common share and OP unit, for 2010. FFO-Core per diluted common share and OP unit was impacted by the issuance of common shares in August 2010 and in May 2011. FFO-Core excludes acquisition expenses of $666,000 and $46,000 in 2011 and 2010, respectively, legal expenses of $254,000 in 2011, and a gain from an insurance settlement of $558,000 in 2010.
  • Whitestone's FFO was $8.7 million, or $0.81 per diluted common share and OP unit for 2011, as compared to $8.4 million, or $1.44 per diluted common share and OP unit, for 2010.
  • Property NOI increased 12% to $21.6 million in 2011, as compared to $19.3 million for 2010. Of the total $2.3 million increase, $1.4 million was attributable to new acquisitions, and $0.9 million was due to 5% growth in same stores.
  • Net income attributable to Whitestone was $1.1 million, or $0.12 per diluted common share for 2011, as compared to $1.1 million, or $0.27 per diluted common share for 2010.

2011 Leasing Highlights

The Company's Operating Portfolio Occupancy Rate increased to 87% as of December 31, 2011 from 86% as of December 31, 2010. The Company defines Operating Portfolio Occupancy Rate as physical occupancy in all properties, excluding new acquisitions through the earlier of attainment of 90% occupancy or 18 months of ownership and properties that are undergoing significant redevelopment or re-tenanting. Total physical property occupancy, which includes properties under redevelopment, undergoing significant retenanting and recent acquisitions, was 84% as of December 31, 2011, the same as the prior year.

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