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1. Company Snapshot

1.a. Company Description

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.

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1.b. Last Insights on WSR

Whitestone REIT's recent performance was driven by strong Q3 2025 earnings, with net income attributable to common shareholders per diluted share increasing to $0.35, up from $0.15 in the same period last year. The company's quarterly funds from operations (FFO) of $0.26 per share met estimates. A $750 million credit facility expansion and extension also bolstered the company's financial position. Additionally, a proposal from MCB Real Estate to acquire all outstanding shares for $15.20 per share introduced a potential catalyst for change.

1.c. Company Highlights

2. Whitestone REIT's Q3 2025 Earnings: A Strong Performance

Whitestone REIT reported a robust financial performance in Q3 2025, with core FFO per share coming in at $0.26, in line with estimates. The company's occupancy rate stood at 94.2%, up 30 basis points from Q2, while same-store net operating income growth was 4.8% for the quarter. Average base rent increased by 8.2% to $25.59 compared to the same period last year. The company's financial performance was also reflected in its revenue growth, although the exact figure wasn't disclosed. With a P/E Ratio of 15.28 and an EV/EBITDA of 12.82, the market seems to have priced in a certain level of growth for the company.

Publication Date: Nov -23

📋 Highlights
  • Occupancy Rate Increase: Q3 occupancy reached 94.2%, up 30 bps from Q2.
  • Same-Store NOI Growth: Delivered 4.8% growth, raising lower bound of target by 50 bps to 3.5-4.5%.
  • Leasing Spreads: Combined 19.3% (new leases 22.5%, renewals 18.6%) on $29.1M total lease value.
  • Credit Facility Amendment: Improved valuation cap rate to 6.75%, extended facility, and weighted average debt rate to 4.8%.
  • Redevelopment Impact: Forecasted to add up to 1% to same-store NOI growth with $20M-$30M capital spend over 2026-2027.

Operational Highlights

The company's operational performance was marked by significant leasing activity, with $29.1 million in total lease value signed during the quarter. Leasing spreads were robust, with new leases at 22.5% and renewals at 18.6%, resulting in a combined spread of 19.3%. Christine Mastandrea noted that the company expects to continue seeing similar leasing spreads, if not more, in the coming quarters. This bodes well for the company's future growth prospects.

Guidance and Outlook

Whitestone REIT reiterated its 2025 core FFO per share guidance of $1.03 to $1.07 and improved its same-store NOI growth range to 3.5% to 4.5%. The company's guidance for next year's revenue growth is expected to be around 5.7%, according to analysts' estimates. With a strong operational performance and a solid balance sheet, the company is well-positioned to achieve its growth objectives.

Balance Sheet and Leverage

J. Scott Hogan mentioned that the company is making steady progress on its leverage metrics, with the debt-to-EBITDAre ratio expected to be in the mid to high 6s by the end of Q4. The company's amended and extended credit facility has improved its valuation cap rate to 6.75%, and the weighted average term on all debt has increased to 4.3 years. With a Net Debt / EBITDA ratio of 6.17, the company's leverage is relatively high, but the expected improvement in the debt-to-EBITDAre ratio should provide some comfort to investors.

Pillarstone Joint Venture Update

The company is nearing the end of the collection phase for its Pillarstone joint venture, with $13.6 million received in Q3 and an expected $40 million in December, pending court approval. This windfall is expected to have a positive impact on the company's leverage ratio, with J. Scott Hogan estimating a half-turn impact. This development should help improve the company's overall financial health and provide additional flexibility for future growth initiatives.

3. NewsRoom

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3 REITs That Big Money Might Snap Up Soon

Dec -04

Source: seekingalpha.com

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Amy Feng rejoins H/Advisors Abernathy as Managing Director

Dec -01

Source: globenewswire.com

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Whitestone REIT Reaches 99% Occupancy at The Promenade at Fulton Ranch in Chandler, Arizona

Nov -20

Source: globenewswire.com

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Investors Are Sleeping On Whitestone REIT - But They Won't For Long

Nov -17

Source: seekingalpha.com

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Best REITs For Potential Upside To Buy Now

Nov -08

Source: seekingalpha.com

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Whitestone REIT Acquires Primely Located World Cup Plaza in Frisco, Texas

Nov -07

Source: globenewswire.com

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Shopping Center REITs Arbitrage Public To Private Asset Pricing Spread

Nov -05

Source: seekingalpha.com

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Whitestone REIT Receives Unsolicited, Non-Binding Acquisition Proposal

Nov -04

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.47%)

6. Segments

Same Store - Rental

Expected Growth: 4.65%

Whitestone REIT's 4.65% same-store rental growth is driven by a combination of factors, including strong demand for retail space in its target markets, successful lease renewal and repositioning efforts, and a focus on high-quality, internet-resistant tenants. Additionally, the REIT's strategic acquisitions and dispositions have contributed to the growth, along with a favorable operating environment and effective cost management.

Same Store - Recoveries

Expected Growth: 4.0%

Whitestone REIT's 4.0% same-store recoveries growth is driven by strong demand for retail space, increased occupancy rates, and rent growth. Additionally, the REIT's focus on necessity-based tenants, such as grocery stores and restaurants, has provided a stable source of income. Effective cost management and strategic capital allocation have also contributed to the growth.

Non-same Store and Management Fees - Rental

Expected Growth: 4.65%

Whitestone REIT's 4.65% growth in Non-same Store and Management Fees - Rental is driven by strategic acquisitions, increasing occupancy rates, and rent growth. Additionally, the REIT's focus on community-centered retail properties and strong relationships with tenants have contributed to the growth. Effective cost management and a solid balance sheet have also enabled the company to capitalize on opportunities and drive revenue growth.

Non-same Store and Management Fees - Recoveries

Expected Growth: 4.65%

The 4.65% growth in Non-same Store and Management Fees - Recoveries from Whitestone REIT is driven by increasing property values, strategic acquisitions, and effective cost management. Additionally, Whitestone REIT's focus on high-growth markets and diversified tenant base contribute to the growth. The recovery of management fees also indicates improved operational efficiency.

Same Store - Other

Expected Growth: 4.65%

Whitestone REIT's Same Store - Other segment growth of 4.65% is driven by a combination of factors, including increasing rental rates, high occupancy levels, and strategic lease renewals. Additionally, the company's focus on value-add opportunities, such as property renovations and redevelopments, has contributed to the segment's growth.

Same Store - Bad Debt

Expected Growth: 3.78%

Whitestone REIT's 3.78% growth in Same Store - Bad Debt is driven by effective credit risk management, stringent tenant screening, and a diversified portfolio with a strong mix of essential retail and service-oriented businesses, resulting in lower delinquency rates and improved collections.

Non-same Store and Management Fees - Bad Debt

Expected Growth: 4.5%

Whitestone REIT's 4.5% growth in Non-same Store and Management Fees is driven by strategic acquisitions, increasing occupancy rates, and rent growth. Effective asset management and cost controls have minimized Bad Debt, while the REIT's diversified tenant base and strong credit profile have contributed to its resilience.

Non-same Store and Management Fees - Other

Expected Growth: 4.83%

Whitestone REIT's 4.83% growth in Non-same Store and Management Fees - Other is driven by strategic acquisitions, expanding third-party management services, and increasing fees from existing clients. Additionally, the REIT's focus on e-commerce resistant properties and strong relationships with national retailers contribute to this growth.

7. Detailed Products

Retail Properties

Whitestone REIT owns and operates a diversified portfolio of retail properties, including grocery-anchored shopping centers, power centers, and lifestyle centers.

Office Properties

Whitestone REIT owns and operates a portfolio of office properties, including multi-tenant office buildings and single-tenant properties.

Mixed-Use Properties

Whitestone REIT develops and operates mixed-use properties, combining retail, office, and residential spaces in a single project.

Property Management Services

Whitestone REIT provides property management services, including leasing, marketing, and maintenance, to third-party property owners.

Acquisition and Development Services

Whitestone REIT provides acquisition and development services, including site selection, entitlement, and construction management.

8. Whitestone REIT's Porter Forces

Forces Ranking

Threat Of Substitutes

Whitestone REIT's properties are primarily located in Texas, which limits the availability of substitutes. However, the company's focus on e-commerce and last-mile delivery could lead to increased competition from other logistics providers.

Bargaining Power Of Customers

Whitestone REIT's customers are primarily small to medium-sized businesses, which have limited bargaining power. The company's focus on providing high-quality logistics services and building strong relationships with its customers also reduces the bargaining power of customers.

Bargaining Power Of Suppliers

Whitestone REIT has a diversified supplier base, which reduces the bargaining power of individual suppliers. The company's focus on building strong relationships with its suppliers also helps to mitigate the bargaining power of suppliers.

Threat Of New Entrants

The barriers to entry in the logistics industry are relatively high, which reduces the threat of new entrants. Additionally, Whitestone REIT's focus on providing high-quality logistics services and building strong relationships with its customers makes it difficult for new entrants to gain traction.

Intensity Of Rivalry

The logistics industry is highly competitive, with several established players competing for market share. However, Whitestone REIT's focus on providing high-quality logistics services and building strong relationships with its customers helps to differentiate the company from its competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 60.74%
Debt Cost 6.42%
Equity Weight 39.26%
Equity Cost 9.86%
WACC 7.77%
Leverage 154.74%

11. Quality Control: Whitestone REIT passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
NETSTREIT

A-Score: 6.7/10

Value: 3.0

Growth: 6.2

Quality: 6.2

Yield: 8.0

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

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Getty Realty

A-Score: 6.2/10

Value: 3.1

Growth: 4.6

Quality: 6.5

Yield: 10.0

Momentum: 3.0

Volatility: 10.0

1-Year Total Return ->

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Saul Centers

A-Score: 6.1/10

Value: 5.7

Growth: 3.6

Quality: 6.1

Yield: 10.0

Momentum: 2.0

Volatility: 9.3

1-Year Total Return ->

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Whitestone REIT

A-Score: 5.8/10

Value: 5.0

Growth: 4.3

Quality: 6.5

Yield: 7.0

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

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Acadia Realty

A-Score: 5.1/10

Value: 2.6

Growth: 2.9

Quality: 4.9

Yield: 8.0

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

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Retail Opportunity Investments

A-Score: 5.0/10

Value: 2.8

Growth: 4.6

Quality: 5.8

Yield: 4.0

Momentum: 6.5

Volatility: 6.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

13.22$

Current Price

13.22$

Potential

-0.00%

Expected Cash-Flows