Whitestone REIT Operating Partnership, L.P. - FORM 8-K - EX-99.2 - EXHIBIT 99.2

Attached files

file	filename
EX-99.1 - EXHIBIT 99.1 - Whitestone REIT Operating Partnership, L.P.	exhibit991pressreleaseofwh.htm
8-K - FORM 8-K - Whitestone REIT Operating Partnership, L.P.	a8-kxearningsrelease2011x0.htm



TABLE OF CONTENTS

	Page

Corporate Profile	1
Second Quarter 2011 Earnings Release	2
Financial Results	7
Balance Sheets	7
Statements of Operations	8
Cash Flows	10
Non-GAAP Measures	12
Funds From Operations (FFO) and other Financial Information	14
Market Capitalization and Selected Ratios	15
Outstanding Debt	16
Debt Maturities Schedule	16
Occupancy Summary	17
Top Tenants	17
Leasing Activity	18
Lease Expirations	22
Community Centered Property Details	23

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CORPORATE PROFILE

NYSE-Amex: WSR	Whitestone REIT (NYSE-Amex: WSR) is a fully integrated real estate investment trust that owns,
Class B Common Shares	operates and re-develops Community Centered Properties^TM, which are visibly located properties in
Listed 8/25/2010	established or developing, culturally diverse neighborhoods. As of June 30, 2011, we owned
	40 Community Centered Properties^TM with approximately 3.3 million square feet of leasable space,
40 Community Centers	located in five of the top markets in the USA in terms of population growth: Houston, Dallas, San
3.3 Million GLA	Antonio, Phoenix and Chicago. Headquartered in Houston, Texas, we were founded in 1998.
813 Tenants
	We focus on value-creation in our properties, as we market, lease and manage our properties. We
5 Top Growth Markets	invest in properties that are or can become Community Centered Properties^TM from which our
Houston	tenants deliver needed services to the surrounding community. We focus on niche properties with
Dallas	smaller rental spaces that present opportunities for attractive returns.
San Antonio
Phoenix	Our strategic efforts target entrepreneurial tenants at each property who provide services to their
Chicago	respective surrounding community. Operations include an internal management structure, providing
	cost-effective service to locally-oriented smaller space tenants. Multi-cultural community focus sets
Fiscal Quarter End	us apart from traditional commercial real estate operators. We value diversity on our team and maintain
06/30	in-house leasing, property management, marketing, construction and maintenance departments with
	culturally diverse and multi-lingual associates who understand the particular needs of our tenants
Common Shares &	and neighborhoods.
Units Outstanding:
Class B Common: 7.5 Million*	We have a diverse tenant base concentrated on service offerings such as medical, education and
Class A Common: 3.5 Million	casual dining. These tenants tend to occupy smaller spaces (less than 3,000 square feet) and, as of
Operating Partnership Units:	June 30, 2011, provided a 57% premium rental rate compared to our larger space tenants. The
1.8 Million	largest of our 813 tenants comprises less than 2.0% of our revenues.

Dividend (per share / unit):
Quarter $0.2850	Investor Relations:
Annualized $1.14	Whitestone REIT
Dividend Yield 9.3%**	Anne I. Gregory, Vice President, Investor Relations & Marketing
	2600 South Gessner Suite 500, Houston, Texas 77036
Board of Trusteees:	713.435.2221 email: ir@whitestonereit.com
James C. Mastandrea
Daryl J. Carter	ICR Inc. - Brad Cohen 203.682.8211
Daniel G. DeVos
Donald F. Keating	website: www.whitestonereit.com
Jack L. Mahaffey
	Analyst Coverage:
* As of August 5, 2011	BMO Capital Markets Corp.	J.J.B. Hilliard, W.L. Lyons, LLC	JMP Securities	Wunderlich Securities, Inc.
	Paul Adornato, CFA	Carol L. Kemple	Mitch Germain	Merril Ross
	212.885.4170	502.588.1839	212.906.3546	703.669.9255
** Based on share price of	Paul.Adornato@bmo.com	ckemple@hilliard.com	mgermain@jmpsecurities.com	mross@wundernet.com
$12.21 as of August 5, 2011
	Newest Acquisitions:

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PRESS RELEASE

Contact Whitestone REIT:

Anne Gregory, Vice President Marketing & Investor Relations

(713) 435 2221 ir@whitestonereit.com

WHITESTONE REIT ANNOUNCES

OPERATING RESULTS FOR SECOND QUARTER 2011

Houston, Texas, August 8, 2011 - 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 quarter and six months ended June 30, 2011.

Second Quarter 2011 Highlights:


•	Purchased two Arizona Community Centered Properties below replacement cost for approximately $8.7 million.


•	Funds From Operations ("FFO")-Core increased 5.3% to $2.0 million, or $0.20 per diluted common share and Operating Partnership (“OP”) unit, up $0.1 million from $1.9 million, from the same period in 2010. FFO-Core excludes acquisition costs of $141,000 and legal and professional costs of $293,000 incurred in the second quarter of 2011.


•	Property net operating income (“NOI”) was up 2.1% to $4.9 million, compared to the same period in 2010.


•	Net loss attributable to Whitestone REIT was $(196,000), or $(0.02) per diluted common share and OP unit, compared to net income of $166,000, or $0.05 per diluted common share and OP unit, for the same period in 2010.

The Company declared a quarterly cash dividend of $0.285 per common share and OP unit, payable in three equal installments of $0.095 in July, August and September 2011. Subsequent to the second quarter, the Company also declared its next quarterly cash dividend of $0.285 per common share and OP unit, payable in three equal installments of $0.095 in October, November and December, 2011. Based on the closing price on August 5, 2011 of $12.21 per share, the dividend represents an annual yield of approximately 9.3%.

“Our year over year increases in FFO-Core and NOI continued on a positive trend in the second quarter. In addition, we invested capital in new value-add Community Centers in a high growth market. We expect that these investments will have a direct impact on FFO per share. We intend to make more value-add acquisitions, at a discount to replacement cost, from our pipeline of off-market properties. We believe our ability to act strategically and quickly, using our capital and OP units, gives us a competitive advantage that will fuel our expansion in the second half of 2011. In the next few quarters, we intend to balance the acquisition of Community Centers that offer in-place cash flow with Community Centers that offer lower cash flow but greater upside potential, to contribute to our future earnings growth,” said James C. Mastandrea, Whitestone's Chairman and Chief Executive Officer. “During the quarter, we continued to invest in our Phoenix infrastructure to escalate leasing velocity in that market. Even with current market conditions, we receive a significant rental premium per square foot from our service-oriented tenants who occupy less than 3,000 square feet as compared to our larger space tenants.”

Year to Date 2011 Highlights:


•	FFO-Core increased 7.7% to $4.2 million, or $0.48 per diluted common share and OP unit, compared to $3.9 million in the first six months of 2010. FFO-Core excludes acquisition costs of $142,000 and extraordinary professional expenses of $356,000 incurred in the first half of 2011.


•	NOI increased 5.3% to $10.0 million as compared to $9.5 million for the first six months of 2010.


•	Net income attributable to Whitestone REIT was $7,000, or $0.00 per common share, as compared to $383,000 or the first six months of 2010.

A reconciliation of FFO, FFO-Core, NOI and EBITDA is included at the end of the financial tables accompanying this release.

Capital Markets, Debt Markets and Acquisition Activity

Whitestone closed on a new $20 million unsecured revolving credit facility with Harris Bank, part of BMO Financial Group, on June 13, 2011. The facility is expandable to $75 million and matures two years from closing, with a 12 month extension available upon lender approval. The Company will use the new facility for general corporate purposes, including acquisitions

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and redevelopment of existing properties in its portfolio.

The Company completed a secondary offering in May 2011 in which it sold 5,310,000 Class B common shares for $12 per share. Net proceeds from the offering were approximately $59.8 million, which the Company has used and intends to continue to use primarily to acquire Community Centered Properties ^TMin its target markets.

During the second quarter, the Company announced the completed acquisitions of two Community Centered Properties in the Phoenix area, both at prices significantly below replacement cost.

•

In April 2011, the Company completed the purchase of Desert Canyon Shopping Center in McDowell Mountain Ranch, located in northern Scottsdale, Arizona. The Center, which contains 62,533 leasable square feet, inclusive of 12,960 square feet leased to two tenants under ground leases, was purchased out of foreclosure from a regional bank in an all cash transaction for $3,650,000, or $58 per leasable square foot.


•	Late in June 2011, the Company completed the purchase of Gilbert Tuscany Village in Gilbert, Arizona. The Center, which contains 49,415 leasable square feet, was purchased out of foreclosure from a private lender in an all cash transaction for $5,000,000, or $101.18 per leasable square foot.

Leasing Highlights: Second Quarter 2011 Compared to Second Quarter 2010:

The Company's physical occupancy of its Operating Portfolio was 84% as of June 30, 2011, unchanged from the end of the first quarter at March 31, 2011 and up from 82% as of June 30, 2010. The Company defines Operating Portfolio as all properties excluding (1) new acquisitions through the earlier of (i) attainment of 90% occupancy or (ii)18 months of ownership, and (2) properties which are undergoing significant redevelopment or re-tenanting. Total physical occupancy, including all properties, was 81% as of June 30, 2011.

The Company increased leasing activity during the second quarter of 2011 represented by:


•	a 42% increase in the square footage of new and renewal leases signed: 266,000 for the second quarter of 2011 versus 187,000 in the same period of 2010.


•	a 97% increase in the total lease value of new and renewal leases signed: $13.8 million in the second quarter of 2011 versus $7.0 million in 2010; and


•	a 6% decrease in the number of new and renewal leases signed: 77 in the second quarter of 2011 versus 82 in 2010.

Examples of leases executed during the second quarter 2011 include:

Desert Canyon - Phoenix: Whitestone acquired this busy “families on the go” Center in April 2011 and three new tenants signed leases: Schlafani's Pizza-1,563 square feet ("sf"); Hooked on You, a yarn and crafts retailer-829 sf; and Scottsdale Wealth Management-516 sf. Additionally, the restaurant based at the Center, Twisted Lizard, signed a new 225 sf lease for their new administrative offices.

Spoerlein Commons - Chicago: An upscale suburban Center, Excel Eye Care signed a new 1,747 sf lease; and Live It, Inc., a naturopathic yoga and pilates studio, signed a new 1,154 sf lease.

Community Centered Properties^TM Portfolio Statistics

Whitestone currently owns 40 Community Centered Properties^TM with approximately 3.4 million sf of leasable space located in five of the top markets in the USA in terms of population growth: Houston, Dallas, San Antonio, Phoenix and Chicago.

The Company's strategic efforts target entrepreneurial tenants who provide services to their respective surrounding community. These tenants tend to occupy smaller spaces (less than 3,000 square feet), and as of June 30, 2011, provide a 57% premium rental rate compared to Whitestone's larger space tenants. The Company currently services 813 tenants. No single tenant accounted for more than two percent of the Company's annualized revenue as of June 30, 2011.

Balance Sheet

Whitestone maintains liquidity and financial flexibility through cash balances, unmortgaged properties, and availability under its credit facility. The Company has no amounts drawn under its $20 million unsecured credit facility and 16 unencumbered properties as of June 30, 2011. The 16 unencumbered properties have an undepreciated cost basis of $73 million as of June 30, 2011. Whitestone's total undepreciated value of real estate assets and indebtedness were $216 million and $103 million, respectively, as of June 30, 2011.

The Company has no real estate debt maturing prior to 2013, and as of June 30, 2011, 76% of the Company's total indebtedness was fixed-rate debt. The blended interest rate for the Company's debt was 5.6% as of June 30, 2011. For the second quarter of

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2011, the Company's interest coverage ratio (EBITDA/Interest Expense) was 2.2:1.

Subsequent to Second Quarter 2011

On August 8, 2011, the Company completed the purchase of Terravita Marketplace in North Scottsdale in an all cash transaction for $16.1 million, or $157 per leasable square foot. The Center, which contains 102,733 leasable square feet, inclusive of 51,434 square feet leased to two tenants under ground leases, is located in North Scottsdale, Arizona and represents Whitestone's fifth acquisition in the Phoenix area since September 2010. Terravita Marketplace is anchored by a ground lease with Albertsons, a 47,000 square foot national grocer, along with other notable tenants including Walgreens, The Good Egg Restaurant, BedMart, and a ground lease with Wells Fargo.

On July 26, the Company announced the disposition of Greens Road Plaza, a non-core Houston asset, for $1.75 million in an all-cash transaction. The Company expects to reinvest the proceeds from the sale of the 20,507 sf property located in Northeast Houston in acquisitions of Community Centered Properties in its target markets of Arizona, Texas and Illinois.

Supplemental Financial Information

Further details regarding Whitestone REIT's results of operations, Communities and tenants can be accessed at the Company's website at www.whitestonereit.com.

Webcast and Conference Call

The Company will host a webcast and conference call for investors and other interested parties on Monday, August 8, 2011 at 5:00 p.m. (Eastern Time). The call will be hosted by James C. Mastandrea, Chairman and Chief Executive Officer, and David Holeman, Chief Financial Officer.

Interested parties can listen to the call live on the internet through the Investor Relations section of the Company's website, www.whitestonereit.com, using the News/Events - Press Releases tab. The call is also accessible via telephone by dialing 1-(877) 407-0784 for domestic participants or 1-(201) 689-8560 for international participants. Listeners should go to the website at least 15 minutes prior to the call to download and install any necessary audio software. Those dialing in should call in at least five to ten minutes prior to the start.

The conference call will be recorded and a telephone replay will be available through August 22, 2011, by dialing 1-(877) 870-5176 for domestic participants or 1-(858) 384-5517 for international participants and entering the passcode 375233. Additionally, a replay of the call will be available on the Company's website until its next earnings release.

The earnings release and supplemental data package will be located in the Investor Relations section of the website on the News/Events - Press Releases tab. For those without internet access, the second quarter 2011 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) 435-2221.

About Whitestone REIT

Whitestone REIT (NYSE-Amex: WSR) is a fully integrated real estate company that owns, operates and re-develops Community Centered Properties^TM, which are visibly located properties in established or developing culturally diverse neighborhoods. Whitestone focuses on value-creation in its Community Centers, as it markets, leases and manages its Centers to match tenants with the shared needs of surrounding neighborhoods. Operations are structured for providing cost-effective service to local service-oriented smaller space tenants (less than 3,000 square feet). Whitestone has a diverse tenant base concentrated on service offerings including medical, education and casual dining. The largest of its 813 tenants comprises less than 2% of its rental revenues. Headquartered in Houston, Texas and 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 SEC filings, news releases, financial reports and investor newsletters.

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"), including earnings guidance for the second fiscal quarter. We intend 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 can generally be identified by our use of forward-looking terminology, such as "may," "will," "expect,"

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"intend," "anticipate," "believe," "continue" or similar words or phrases that are predictions of future events or trends and which do not relate solely to historical matters. Examples of such statements in this press release include, but are not limited to, the strength of the Company's leasing portfolio and lease renewal activities; the Company's anticipated net income, depreciation and amortization and FFO-Core.

The following are some of the 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 successfully identify and consummate suitable acquisitions; 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 and regulatory changes; 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; and other factors detailed in our most recent Annual Report on Form 10-K, quarterly reports on Form 10-Q and other documents we file with the Securities and Exchange Commission.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. We cannot guarantee the accuracy of any such forward-looking statements contained in this press release, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Non-GAAP Financial Measures

This release contains the supplemental non-GAAP financial measures of FFO, FFO-Core, NOI and EBITDA. Following are definitions and reconciliations of these metrics to their most comparable GAAP metric.

FFO: Management believes that FFO is a useful measure of the Company's operating performance. The Company computes FFO as defined by the National Association of Real Estate Investment Trusts, or NAREIT, which states FFO should represent net income (loss) before noncontrolling interest (computed in accordance with GAAP) plus real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and joint ventures and excluding gains on the sale of property. 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.

Further, 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 Operating Partnership units for the periods presented. 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. In addition, management believes that FFO provides useful information to the investment community about the Company's financial performance when compared to other REITs since FFO is generally recognized as the industry standard for reporting the operations of REITs.

FFO-Core: Management believes that the computation of FFO in accordance with NAREIT's definition includes certain items that are not indicative of the results provided by the Company's operating portfolio and affect the comparability of the Company's period-over-period performance. These items include, but are not limited to, legal and professional fees, gains and losses on insurance claim settlements and acquisition costs. The Company believes that these adjustments are appropriate in determining FFO-Core as they are not indicative of the operating performance of the Company's 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 most REITs provide some form of adjusted or modified FFO.

NOI: 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). Other REITs may use different methodologies for calculating NOI, and accordingly, the Company's NOI may not be comparable to other REITs. Because NOI excludes general and administrative expenses, depreciation and amortization, involuntary conversion, interest expense, interest income, provision for income taxes and loss on sale or disposition of assets, 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 that factors such as occupancy levels, lease structure, lease rates and tenant base have on the Company's results, margins and

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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 and loss on sale or disposition of assets, the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company's properties.

EBITDA: Management believes that EBITDA is an appropriate supplemental measure of operating performance to net income attributable to Whitestone REIT. The Company defines EBITDA as operating revenues (rental and other revenues) less property and related expenses (property operation and maintenance and real estate taxes) and general and administrative expenses. Other REITs may use different methodologies for calculating EBITDA, and accordingly, the Company's EBITDA may not be comparable to other REITs. 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, interest income, provision for income taxes and loss on sale or disposition of assets, the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company's properties.

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Whitestone REIT and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)



	June 30, 2011			December 31, 2010
	(unaudited)
ASSETS
Real estate assets, at cost
Property	$	213,889		$	203,223
Accumulated depreciation	(42,185		)	(38,989		)
Net operating real estate assets	171,704			164,234
Real estate assets held-for-sale, net	1,168			1,164
Total real estate assets	172,872			165,398
Cash and cash equivalents	57,776			17,591
Marketable securities	9,381			—
Escrows and acquisition deposits	2,491			4,385
Accrued rents and accounts receivable, net of allowance for doubtful accounts	4,998			4,691
Unamortized lease commissions and loan costs	3,684			3,574
Prepaid expenses and other assets	840			746
Other assets - discontinued operations	86			60
Total assets	$	252,128		$	196,445
LIABILITIES AND EQUITY
Liabilities:
Notes payable	$	103,050		$	100,941
Accounts payable and accrued expenses	5,825			7,208
Tenants' security deposits	1,824			1,768
Dividends and distributions payable	3,647			2,133
Other liabilities - discontinued operations	68			112
Total liabilities	114,414			112,162
Commitments and contingencies:
Equity:
Preferred shares, $0.001 par value per share; 50,000,000 shares authorized; none issued
and outstanding as of June 30, and December 31, 2010, respectively	—			—
Class A common shares, $0.001 par value per share; 50,000,000 shares authorized;
3,471,157 and 3,471,187 issued and outstanding as of June 30, 2011 and
December 31, 2010, respectively	3			3
Class B common shares, $0.001 par value per share; 350,000,000 shares authorized;
7,510,000 and 2,200,000 issued and outstanding as of June 30, 2011 and
December 31, 2010, respectively	7			2
Additional paid-in capital	153,170			93,357
Accumulated other comprehensive income	(168		)	—
Accumulated deficit	(35,799		)	(30,654		)
Total Whitestone REIT shareholders' equity	117,213			62,708
Noncontroling interest in subsidiary	20,501			21,575
Total equity	137,714			84,283
Total liabilities and equity	$	252,128		$	196,445

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Whitestone REIT and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(in thousands, except per share data)



	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Property revenues
Rental revenues	$	6,657		$	6,369		$	13,279		$	12,721
Other revenues	1,338			1,397			2,711			2,659
Total property revenues	7,995			7,766			15,990			15,380

Property expenses
Property operation and maintenance	1,966			2,106			3,883			3,862
Real estate taxes	1,096			889			2,108			2,030
Total property expenses	3,062			2,995			5,991			5,892

Other expenses (income)
General and administrative	1,778			1,272			3,242			2,472
Depreciation and amortization	1,961			1,745			3,936			3,465
Interest expense	1,445			1,402			2,847			2,809
Interest, dividend and other investment income	(55		)	(5		)	(115		)	(12		)
Total other expense	5,129			4,414			9,910			8,734

Income (loss) from continuing operations before loss on disposal of
assets and income taxes	(196		)	357			89			754

Provision for income taxes	(58		)	(102		)	(110		)	(155		)
Loss on sale or disposal of assets	—			(8		)	(18		)	(41		)

Income (loss) from continuing operations	(254		)	247			(39		)	558

Income (loss) from discontinued operations	16			8			47			32

Net income (loss)	(238		)	255			8			590

Less: Net income (loss) attributable to noncontrolling interests	(42		)	89			1			207

Net income (loss) attributable to Whitestone REIT	$	(196	)	$	166		$	7		$	383

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Whitestone REIT and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS COMPREHENSIVE INCOME (LOSS)

(in thousands, except per share data)



	Three Months Ended June 30,					Six Months Ended June 30,
	2011			2010		2011			2010
Earnings Per Share:
Basic:
Income (loss) from continuing operations attributable to Whitestone
REIT excluding amounts attributable to unvested restricted shares	$	(0.03	)	$	0.05	$	(0.01	)	$	0.11
Income from discontinued operations attributable to Whitestone REIT	0.01			—		0.01			—
Net income (loss) attributable to common shareholders excluding
amounts attributable to unvested restricted shares	$	(0.02	)	$	0.05	$	—		$	0.11
Diluted:
Income (loss) from continuing operations attributable to Whitestone
REIT excluding amounts attributable to unvested restricted shares	$	(0.03	)	$	0.05	$	(0.01	)	$	0.11
Income from discontinued operations attributable to Whitestone REIT	0.01			—		0.01			—
Net income (loss) attributable to common shareholders excluding
amounts attributable to unvested restricted shares	$	(0.02	)	$	0.05	$	—		$	0.11


Weighted average number of common shares outstanding:
Basic	8,520			3,282		7,008			3,261
Diluted	8,520			3,300		7,008			3,300

Dividends declared per common share	$	0.2850		$	0.2850	$	0.5700		$	0.6225

Consolidated Statements of Comprehensive Income (Loss)

Net income (loss)	$	(238	)	$	255	$	8		$	590

Other comprehensive gain (loss)

Unrealized (loss) on available-for-sale marketable securities	(209		)	—		(209		)	—

Comprehensive income (loss)	(447		)	255		(201		)	590

Less: Comprehensive income (loss) attributable to noncontrolling
interests	(78		)	89		(41		)	207

Comprehensive income (loss) attributable to Whitestone REIT	$	(369	)	$	166	$	(160	)	$	383

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Whitestone REIT and Subsidiary

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



	Six Months Ended June 30,
	2011			2010

Cash flows from operating activities:
Income (loss) from continuing operations	$	(39	)	$	558
Income from discontinued operations	47			32
Net income	8			590
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	3,936			3,465
Gain on sale of marketable securities	(38		)	—
Loss on sale or disposal of assets	18			41
Bad debt expense	214			206
Share-based compensation	155			143
Changes in operating assets and liabilities:
Escrows and acquisition deposits	1,986			2,006
Accrued rent and accounts receivable	(518		)	(204		)
Unamortized lease commissions and loan costs	(401		)	(362		)
Prepaid expenses and other assets	496			265
Accounts payable and accrued expenses	(1,721		)	(2,374		)
Tenants' security deposits	56			36
Net cash provided by operating activities	4,144			3,780
Net cash provided by operating activities of discontinued operations	4			38

Cash flows from investing activities:
Additions to real estate	(2,035		)	(929		)
Real estate acquisitions	(8,650		)	—
Investment in marketable securities	(10,461		)	—
Proceeds from sale of marketable securities	909			—
Net cash used in investing activities	(20,237		)	(929		)
Net cash used in investing activities of discontinued operations	(31		)	—

Cash flows from financing activities:
Dividends paid	(3,737		)	(2,339		)
Distributions paid to OP unit holders	(1,030		)	(1,219		)
Proceeds from issuance of comon shares	60,066			—
Proceeds from notes payable	2,905			—
Repayments of notes payable	(1,540		)	(1,447		)
Payments of loan origination costs	(359		)	—
Repurchase of common shares	—			(249		)
Net cash provided by (used in) financing activities	56,305			(5,254		)

Net increase (decrease) in cash and cash equivalents	40,185			(2,365		)
Cash and cash equivalents at beginning of period	17,591			6,275
Cash and cash equivalents at end of period	$	57,776		$	3,910

Table of Contents

Whitestone REIT and Subsidiary

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



	Six Months Ended June 30,
	2011			2010

Supplemental disclosure of cash flow information:
Cash paid for interest	$	2,838		$	2,872
Cash paid for taxes	215			262
Non cash Investing and financing activities:
Disposal of fully depreciated real estate	$	21		$	437
Financed insurance premiums	649			502
Accrued offering costs	305			666
Change in fair value of available-for-sale securities	(209		)	—

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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 June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
FFO AND FFO-CORE
Net income (loss) attributable to Whitestone REIT	$	(196	)	$	166		$	7		$	383
Depreciation and amortization of real estate assets ⁽¹⁾	1,827			1,632			3,677			3,229
Loss on disposal of assets ⁽¹⁾	—			8			18			41
Net income (loss) attributable to noncontrolling interests ⁽¹⁾	(42		)	89			1			207
FFO	$	1,589		$	1,895		$	3,703		$	3,860

Acquisition costs	$	141		$	—		$	142		$	1
Legal and professional costs	293			—			356			—
FFO-Core	$	2,023		$	1,895		$	4,201		$	3,861

FFO PER SHARE AND OP UNIT CALCULATION:
Numerator:
FFO	$	1,589		$	1,895		$	3,703		$	3,860
Dividends paid on unvested restricted Class A common shares	(4		)	(5		)	(10		)	(15		)
FFO excluding amounts attributable to unvested restricted
Class A common shares	1,585			1,890			3,693			3,845
FFO-Core excluding amounts attributable to unvested restricted
Class A common shares	2,019			1,890			4,191			3,846

Denominator:
Weighted average number of total common shares - basic	8,520			3,282			7,008			3,261
Weighted average number of total noncontrolling
OP units - basic	1,815			1,815			1,815			1,815
Weighted average number of total commons shares and
noncontrolling OP units - basic	10,335			5,097			8,823			5,076

Effect of dilutive securities:
Unvested restricted shares	—			18			—			39
Weighted average number of total common shares and
noncontrolling OP units - dilutive	10,335			5,115			8,823			5,115

FFO per share and unit - basic	$	0.15		$	0.37		$	0.42		$	0.76
FFO per share and unit - diluted	$	0.15		$	0.37		$	0.42		$	0.75

FFO-Core per share and unit - basic	$	0.20		$	0.37		$	0.48		$	0.76
FFO-Core per share and unit - diluted	$	0.20		$	0.37		$	0.48		$	0.75

⁽¹⁾ Including amounts for discontinued operations.

Table of Contents

Whitestone REIT and Subsidiaries

RECONCILIATION OF NON-GAAP MEASURES

(in thousands, except per share and per unit data)



	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010

PROPERTY NET OPERATING INCOME ("NOI")

Net income (loss) attributable to Whitestone REIT	$	(196	)	$	166		$	7		$	383
General and administrative expenses	1,778			1,272			3,242			2,472
Depreciation and amortization	1,961			1,745			3,936			3,465
Involuntary conversion	—			—			—			—
Interest expense	1,445			1,402			2,847			2,809
Interest, dividend and other investment income	(55		)	(5		)	(115		)	(12		)
Provision for income taxes	58			102			110			155
Loss on disposal of assets	—			8			18			41
Net income (loss) attributable to noncontrolling interests	(42		)	89			1			207
NOI	$	4,949		$	4,779		$	10,046		$	9,520

EARNINGS BEFORE INTEREST, TAX, DEPRECIATION
AND AMORTIZATION ("EBITDA")

Net income (loss) attributable to Whitestone REIT	$	(196	)	$	166		$	7		$	383
Depreciation and amortization ⁽¹⁾	1,976			1,745			3,965			3,465
Involuntary conversion ⁽¹⁾	—			—			—			—
Interest expense ⁽¹⁾	1,445			1,402			2,847			2,809
Interest, dividend and other investment income ⁽¹⁾	(55		)	(5		)	(115		)	(12		)
Provision for income taxes ⁽¹⁾	58			102			112			155
Loss on disposal of assets ⁽¹⁾	—			8			18			41
Net income (loss) attributable to noncontrolling interests ⁽¹⁾	(42		)	89			1			207
EBITDA	$	3,186		$	3,507		$	6,835		$	7,048



	Three Months Ended
	June 30,			March 31,			December 31,			September 30,
	2011			2011			2010			2010
Net income (loss) attributable to Whitestone REIT	$	(196	)	$	185		$	545		$	177
Depreciation and amortization ⁽¹⁾	1,976			1,989			1,902			1,830
Involuntary conversion ⁽¹⁾	—			—			(558		)	—
Interest expense ⁽¹⁾	1,445			1,402			1,410			1,401
Interest, dividend and other investment income ⁽¹⁾	(55		)	(60		)	(9		)	(7		)
Provision for income taxes ⁽¹⁾	59			53			51			57
Loss on disposal of assets ⁽¹⁾	—			18			47			72
Net income (loss) attributable to noncontrolling
interests ⁽¹⁾	(42		)	61			206			57
EBITDA	$	3,187		$	3,648		$	3,594		$	3,587

⁽¹⁾ Including amounts for discontinued operations.

Table of Contents

Whitestone REIT and Subsidiaries OTHER FINANCIAL INFORMATION (in thousands, except number of properties and employees)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010

Other Financial Information:

Tenant improvements ⁽¹⁾	$	530	$	385	$	1,046	$	656
Leasing commissions ⁽¹⁾	$	247	$	156	$	383	$	267
Scheduled debt principal payments	$	618	$	582	$	1,222	$	1,145
Straight line rent income	$	140	$	10	$	366	$	17
Market rent amortization income from acquired leases	$	14	$	4	$	23	$	11
Non-cash share-based compensation expense	$	77	$	72	$	155	$	143
Non-real estate depreciation and amortization	$	30	$	24	$	59	$	59
Amortization of loan fees	$	119	$	103	$	229	$	205
Acquisition costs	$	141	$	—	$	142	$	1
Undepreciated value of unencumbered properties	$	70,982	$	59,323	$	70,982	$	59,323
Number of unencumbered properties	14		15		14		15
Full time employees	56		52		56		52

⁽¹⁾ Does not include first generation costs for tenant improvements and leasing commission costs needed for new acquisitions or redevelopment of a property to bring the property to operating standards for its intended use.

Table of Contents

Whitestone REIT and Subsidiaries

MARKET CAPITALIZATION AND SELECTED RATIOS

(in thousands)



	As of June 30, 2011
MARKET CAPITALIZATION:	Percent of Total Equity		Total Market Capitalization			Percent of Total Market Capitalization
Equity Capitalization:
Class A common shares outstanding	27.1	%	3,471
Class B common shares outstanding	58.7	%	7,510
Operating partnership units outstanding	14.2	%	1,815
Total	100.0	%	12,796

Market price of Class B common shares as of
June 30, 2011			$	12.72

Total equity capitalization			$	162,765		78	%

Debt Capitalization:
Outstanding debt			$	103,050
Less: Cash and cash equivalents			(57,776		)
			45,274			22	%

Total Market Capitalization as of
June 30, 2011			$	208,039		100	%



SELECTED RATIOS:
	Three Months Ended
	June 30,			March 31,			December 31,			September 30,
	2011			2011			2010			2010
INTEREST COVERAGE RATIO
EBITDA/Interest Expense
EBITDA	$	3,187		$	3,648		$	3,594		$	3,587
Interest expense	1,445			1,402			1,410			1,401
	2.2			2.6			2.5			2.6

LEVERAGE RATIO
Debt/Undepreciated Book Value
Undepreciated real estate assets	$	215,651		$	205,966		$	204,954		$	196,877

Outstanding debt	$	103,050		$	103,760		$	100,941		$	101,667
Less: Cash	(57,776		)	(18,334		)	(17,591		)	(26,617		)
	$	45,274		$	85,426		$	83,350		$	75,050
	21		%	41		%	41		%	38		%

Table of Contents

Whitestone REIT and Subsidiaries

SUMMARY OF OUTSTANDING DEBT AND DEBT MATURITIES

As of June 30, 2011

(in thousands)

TOTAL OUTSTANDING DEBT



Description	Oustanding Amount		Percentage of Total Debt
Fixed rate notes
$3.0 million 6.00% Note, due 2021 ⁽¹⁾	$	2,995	3	%
$10.0 million 6.04% Note, due 2014	9,412		9	%
$1.5 million 6.50% Note, due 2014	1,484		1	%
$11.2 million 6.52% Note, due 2015	10,837		11	%
$21.4 million 6.53% Notes, due 2013	19,838		19	%
$24.5 million 6.56% Note, due 2013	23,817		23	%
$9.9 million 6.63% Notes, due 2014	9,362		9	%
$0.5 million 5.05% Notes, due 2011	344		1	%
Floating rate note
$26.9 million LIBOR + 2.86% Note, due 2013	24,961		24	%
	$	103,050	100	%

⁽¹⁾ The 6.00% interest rate is fixed through March 30, 2016. On March 31, 2016, the interest rate will be reset to the rate of interest for a five year balloon note with a thirty year amortization as published by the Federal Home Loan Bank.

SCHEDULE OF DEBT MATURITIES



Year	Scheduled Amortization Payments		Scheduled Maturities		Total Scheduled Maturities		Percentage of Debt Maturing

2011	$	1,612	$	—	$	1,612	2	%
2012	2,639		—		2,639		3	%
2013	2,333		64,152		66,485		65	%
2014	242		18,949		19,191		19	%
2015	169		10,146		10,315		10	%
2016 and thereafter	287		2,521		2,808		1	%
Total	$	7,282	$	95,768	$	103,050	100	%

Table of Contents

Whitestone REIT and Subsidiaries SUMMARY OF OCCUPANCY AND TOP TENANTS

	Leasable Square Feet as of	Occupancy as of
Community Center Properties	June 30, 2011	June 30, 2011		March 31, 2011		December 31, 2010		September 30, 2010
Retail	1,188,830	84	%	83	%	88	%	80	%
Office/Flex	1,201,672	85	%	86	%	88	%	87	%
Office	631,841	79	%	80	%	79	%	78	%
Total - Operating Portfolio	3,022,343	84	%	84	%	86	%	83	%
Redevelopment, New Acquisitions ⁽¹⁾	251,625	48	%	42	%	40	%	16	%
Total	3,273,968	81	%	82	%	84	%	82	%

⁽¹⁾Includes new acquisitions through the earlier of attainment of 90% occupancy or 18 months of ownership, and properties which are undergoing significant redevelopment or re-tenanting.



Tenant Name	Location	Annualized Rental Revenue (in thousands)		Percentage of Total Annualized Base Rental Revenues⁽²⁾		Initial Lease Date	Year Expiring

Sports Authority	San Antonio	$	495	1.9	%	1/1/2004	2015
University of Phoenix	San Antonio	407		1.5	%	10/18/2010	2018
Air Liquide America, L.P.	Dallas	375		1.4	%	8/1/2001	2013
X-Ray X-Press Corporation	Houston	272		1.0	%	7/1/1998	2019
Marshalls	Houston	248		0.9	%	5/12/1983	2013
Rock Solid Images	Houston	243		0.9	%	4/1/2004	2012
Eligibility Services	Dallas	236		0.9	%	6/6/2000	2012
Merrill Corporation	Dallas	234		0.9	%	12/10/2001	2014
Compass Insurance	Dallas	213		0.8	%	9/1/2005	2013
River Oaks L-M, Inc.	Houston	212		0.8	%	10/15/1993	2014
Petsmart, Inc	San Antonio	199		0.7	%	1/1/2004	2018
New Lifestyles, Inc.	Dallas	192		0.7	%	5/5/1998	2013
The University of Texas Health Science Center	Houston	188		0.7	%	7/1/2007	2017
Brockett Davis Drake Inc.	Dallas	180		0.7	%	8/1/2001	2016
Landworks, Inc.	Houston	178		0.7	%	6/1/2004	2013
		$	3,872	14.5	%

⁽²⁾Annualized Base Rental Revenues represents the monthly base rent as of June 30, 2011 for each applicable tenant multiplied by 12.

Table of Contents

Whitestone REIT and Subsidiaries SUMMARY OF LEASING ACTIVITY

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
RENEWALS
Number of Leases	47		46		90		78
Total SF ⁽¹⁾	176,537		68,732		297,636		128,350
Average SF	3,756		1,494		3,307		1,646
Total Lease Value	$	7,144,537	$	3,520,000	$	9,868,537	$	5,942,000
NEW LEASES
Number of Leases	30		36		67		59
Total SF ⁽¹⁾	89,704		118,488		186,297		197,650
Average SF	2,990		3,291		2,781		3,350
Total Lease Value	$	6,661,244	$	3,480,000	$	9,934,244	$	8,658,000
TOTAL LEASES
Number of Leases	77		82		157		137
Total SF ⁽¹⁾	266,241		187,220		483,933		326,000
Average SF	3,458		2,283		3,082		2,380
Total Lease Value	$	13,805,781	$	7,000,000	$	19,802,781	$	14,600,000

⁽¹⁾Represents the square footage as the result of new, renewal, expansion and contraction leases.

Table of Contents

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 SF		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:

Comparable Total Leases:
2nd Quarter 2011	50	$	9,057,363	254,912	4.9	$	1,710,550	$	6.71	$	8.07	$	8.69	$	(156,257	)	(7	)%	$	(19,542	)	(1	)%
1st Quarter 2011	56	3,432,033		196,598	2.5	125,259		0.64		7.36		8.32		(190,592		)	(12	)%	(12,000		)	(1	)%
Year-to-Date 2011	106	$	12,489,396	451,510	4.1	$	1,835,809	$	4.07	$	7.76	$	8.53	$	(346,849	)	(9	)%	$	(31,542	)	(1	)%

Comparable New Leases:
2nd Quarter 2011	9	$	3,395,023	54,519	8.8	$	1,271,790	$	23.33	$	8.75	$	7.95	$	43,210		10	%	$	13,053		3	%
1st Quarter 2011	16	794,204		36,212	3.0	54,296		1.50		7.93		9.96		(73,510		)	(20	)%	(26,435		)	(8	)%
Year-to-Date 2011	25	$	4,189,227	90,731	6.5	$	1,326,086	$	14.62	$	8.42	$	8.76	$	(30,300	)	(4	)%	$	(13,382	)	(2	)%

Comparable Renewal Leases:
2nd Quarter 2011	41	$	5,662,340	200,393	3.8	$	438,760	$	2.19	$	7.89	$	8.89	$	(199,467	)	(11	)%	$	(32,595	)	(2	)%
1st Quarter 2011	40	2,637,829		160,386	2.4	70,963		0.44		7.23		7.96		(117,082		)	(9	)%	14,435			1	%
Year-to-Date 2011	81	$	8,300,169	360,779	3.5	$	509,723	$	1.41	$	7.59	$	8.47	$	(316,549	)	(10	)%	$	(18,160	)	(1	)%

Table of Contents

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 SF		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
Non-comparable

Non-Comparable Total Leases:
2nd Quarter 2011	27	$	4,748,641	92,815	4.9	$	545,959	$	5.88	$	11.80
1st Quarter 2011	24	2,564,745		77,904	8.3	455,794		5.85		9.52
Year-to-Date 2011	51	$	7,313,386	170,719	4.5	$	1,001,753	$	5.87	$	10.81

Non-Comparable New Leases:
2nd Quarter 2011	21	$	3,266,160	56,571	4.9	$	429,472	$	7.59	$	11.83
1st Quarter 2011	21	2,478,857		66,958	4.5	439,575		6.56		8.60
Year-to-Date 2011	42	$	5,745,017	123,529	4.7	$	869,047	$	7.04	$	10.15

Non-Comparable Renewal Leases:
2nd Quarter 2011	6	$	1,482,481	36,244	4.9	$	116,487	$	3.21	$	11.76
1st Quarter 2011	3	85,888		10,946	8.3	16,219		1.48		15.11
Year-to-Date 2011	9	1,568,369		47,190	4.2	132,706		2.81		12.54

Table of Contents

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 SF		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
Total

New & Renewal
2nd Quarter 2011	77	$	13,806,004	347,727	4.9	$	2,256,509	$	6.49	$	9.09
1st Quarter 2011	80	5,996,778		274,502	3.1	581,053		2.12		7.73
Year-to-Date 2011	157	$	19,802,782	622,229	4.2	$	2,837,562	$	4.56	$	8.60

New
2nd Quarter 2011	30	$	6,661,183	111,090	6.7	$	1,701,262	$	15.31	$	10.36
1st Quarter 2011	37	3,273,061		103,170	3.9	493,871		4.79		8.37
Year-to-Date 2011	67	9,934,244		214,260	5.4	2,195,133		$	10.25	$	9.42

Renewal
2nd Quarter 2011	47	$	7,144,821	236,637	4.0	$	555,247	$	2.35	$	8.48
1st Quarter 2011	43	2,723,717		171,332	2.4	87,182		0.51		7.73
Year-to-Date 2011	90	$	9,868,538	407,969	3.5	642,429		1.57		$	8.17

⁽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 is determined on the basis of square footage.

⁽³⁾ Estimated amount per signed lease. Actual cost of construction may vary. Does not include first generation costs for tenant improvements and leasing commission costs needed for new acquisitions or redevelopment of a property to bring the property to operating standards for its intended use.

⁽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.

Table of Contents

Whitestone REIT and Subsidiaries LEASE EXPIRATIONS

					Annualized Base Rent
		Gross Leasable Area			as of June 30, 2011
Year	Number of Leases ⁽¹⁾	Approximate Square Feet	Percent of Total		Amount (in thousands)⁽²⁾		Percent of Total		Per Square Foot
2011	150	299,344	9.1	%	$	3,062	11.4	%	$	10.23
2012	187	470,691	14.4	%	5,135		19.2	%	10.91
2013	162	535,093	16.3	%	5,716		21.4	%	10.68
2014	121	446,180	13.6	%	4,287		16.0	%	9.61
2015	77	332,957	10.2	%	3,339		12.5	%	10.03
2016	67	232,687	7.1	%	2,167		8.1	%	9.31
2017	10	43,897	1.3	%	443		1.7	%	10.09
2018	11	88,683	2.7	%	1,062		4.0	%	11.98
2019	6	50,333	1.5	%	583		2.2	%	11.58
2020 and thereafter	22	149,285	4.7	%	953		3.5	%	6.38
Total	813	2,649,150	80.9	%	$	26,747	100.0	%	$	10.10

⁽¹⁾Lease expirations table reflects rents in place as of June 30, 2011, and does not include option periods.

⁽²⁾Annualized Base Rent represents the monthly base rent as of June 30, 2011 for each tenant multiplied by 12.

Table of Contents

Whitestone REIT and Subsidiaries COMMUNITY CENTERED PROPERTY DETAILS As of June 30, 2011

Community Name	Location	Year Built/ Renovated	Leasable Square Feet	Percent Occupied at 6/30/11		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⁾
Retail Communities:
Bellnott Square	Houston	1982	73,930	43	%	$	286	$	9.00	$	9.94
Bissonnet/Beltway	Houston	1978	29,205	100	%	295		10.10		10.44
Centre South	Houston	1974	39,134	86	%	218		6.48		9.00
Greens Road ⁽⁴⁾	Houston	1979	20,507	80	%	143		8.72		12.13
Holly Knight	Houston	1984	20,015	100	%	341		17.04		17.34
Kempwood Plaza	Houston	1974	101,008	96	%	845		8.71		8.62
Lion Square	Houston	1980	119,621	94	%	798		7.10		9.37
Providence	Houston	1980	90,327	97	%	734		8.38		7.98
Shaver	Houston	1978	21,926	90	%	235		11.91		11.50
South Richey	Houston	1980	69,928	34	%	283		11.90		11.27
Spoerlein Commons	Chicago	1987	41,455	89	%	747		20.25		20.19
SugarPark Plaza	Houston	1974	95,032	93	%	799		9.04		10.64
Sunridge	Houston	1979	49,359	100	%	423		8.57		9.12
Torrey Square	Houston	1983	105,766	95	%	641		6.38		5.98
Town Park	Houston	1978	43,526	100	%	781		17.94		17.55
Webster Point	Houston	1984	26,060	100	%	288		11.05		10.82
Westchase	Houston	1978	49,573	81	%	481		11.98		11.53
Windsor Park	San Antonio	1992	192,458	76	%	1,426		9.75		9.51
			1,188,830	84	%	$	9,764	$	9.78	$	10.20
Office/Flex Communities:
Brookhill	Houston	1979	74,757	89	%	$	261	$	3.92	$	3.88
Corporate Park Northwest	Houston	1981	185,627	67	%	1,305		10.49		10.40
Corporate Park West	Houston	1999	175,665	88	%	1,434		9.28		9.08
Corporate Park Woodland	Houston	2000	99,937	89	%	753		8.47		8.33
Dairy Ashford	Houston	1981	42,902	92	%	203		5.14		5.32
Holly Hall	Houston	1980	90,000	100	%	709		7.88		8.09
Interstate 10	Houston	1980	151,000	90	%	693		5.10		4.77
Main Park	Houston	1982	113,410	96	%	686		6.30		6.29
Plaza Park	Houston	1982	105,530	78	%	683		8.30		8.26
Westbelt Plaza	Houston	1978	65,619	66	%	357		8.24		8.22
Westgate	Houston	1984	97,225	94	%	500		5.47		5.50
			1,201,672	85	%	$	7,584	$	7.42	$	7.35

Table of Contents

Whitestone REIT and Subsidiaries COMMUNITY CENTERED PROPERTY DETAILS As of June 30, 2011 (continued)

Community Name	Location	Year Built/ Renovated	Leasable Square Feet	Percent Occupied at 6/30/11		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⁾
Office Communities:
9101 LBJ Freeway	Dallas	1985	125,874	71	%	$	1,316	$	14.73	$	15.13
Featherwood	Houston	1983	49,760	85	%	773		18.28		17.97
Pima Norte	Phoenix	2007	33,417	13	%	87		20.03		19.57
Royal Crest	Houston	1984	24,900	80	%	267		13.40		13.15
Uptown Tower	Dallas	1982	253,981	86	%	3,771		17.26		17.49
Woodlake Plaza	Houston	1974	106,169	87	%	1,330		14.40		13.72
Zeta Building	Houston	1982	37,740	83	%	531		16.95		15.87
			631,841	79	%	$	8,075	$	16.18	$	16.11
Total - Operating Portfolio			3,022,343	84	%	$	25,423	$	10.01	$	10.14
Non-Operating Portfolio Communities:
The Citadel	Phoenix	1985	28,547	56	%	$	102	$	6.38	$	16.51
Desert Canyon	Phoenix	2000	62,533	72	%	501		11.13		11.46
Gilbert Tuscany Village	Phoenix	2009	49,415	16	%	202		25.55		27.32
The MarketPlace at Central	Phoenix	2000	111,130	48	%	519		9.73		9.73
			251,625	48	%	$	1,324	$	10.96	$	12.54
Grand Totals			3,273,968	81	%	$	26,747	$	10.09	$	10.28

⁽¹⁾Calculated as the tenant's actual June 30, 2011 base rent (defined as cash base rents including abatements) multiplied by 12. Excludes vacant space as of June 30, 2011. 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 June 30, 2011 equaled approximately $66,000 for the month ended June 30, 2011.

⁽²⁾Calculated as annualized base rent divided by net rentable square feet leased as of June 30, 2011. Excludes vacant space as of June 30, 2011.

⁽³⁾Represents (i) the contractual base rent for leases in place as of June 30, 2011, calculated on 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 June 30, 2011.

⁽⁴⁾Sold on July 22, 2011 for $1,750,000 in cash and net prorations.

Whitestone REIT Operating Partnership, L.P. - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - August 8, 2011

Attached files

Whitestone REIT Operating Partnership, L.P. Reports