Whitestone REIT - FORM 8-K - EX-99.2 - EXHIBIT 99.2

Attached files

file	filename
EX-99.1 - EXHIBIT 99.1 - Whitestone REIT	exhibit991pressreleaseofwh.htm
8-K - 8-K - Whitestone REIT	wsr8-kearningsrelease2013x.htm



TABLE OF CONTENTS

	Page

Corporate Profile	1
Second Quarter 2013 Earnings Release	2
Financial Results
Consolidated Balance Sheets	6
Consolidated Statements of Operations and Comprehensive Income	7
Consolidated Statements of Cash Flows	9
Reconciliation of Non-GAAP Measures	11
Other Financial Information	13
Market Capitalization and Selected Ratios	14
Summary of Outstanding Debt and Debt Maturities	15
Summary of Occupancy and Top Tenants	16
Summary of Leasing Activity	18
Lease Expirations	22
Property Details	23

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CORPORATE PROFILE

NYSE: WSR	Whitestone REIT (NYSE: WSR) is a fully integrated real estate investment trust that owns,
Common Shares	operates and redevelops Community Centered Properties^TM, which are visibly located properties in
	established or developing, culturally diverse neighborhoods. As of June 30, 2013, we owned
	55 Community Centered Properties^TM with approximately 4.6 million square feet of gross leasable
55 Community Centers	area, located in five of the top markets in the United States in terms of population growth: Houston,
4.6 Million Sq. Ft. of gross	Dallas, San Antonio, Phoenix and Chicago. Headquartered in Houston, Texas, we were founded
leasable area	in 1998.
1,168 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, service-oriented tenants at each property who provide
Chicago	services to their respective surrounding communities. Operations include an internal management
	structure providing cost-effective services to locally-oriented, smaller space tenants. Multi-cultural
Fiscal Year End	community focus sets us apart from traditional commercial real estate operators. We value diversity
12/31	on our team and maintain in-house leasing, property management, marketing, construction and
	maintenance departments with culturally diverse and multi-lingual associates who understand the
Common Shares &	particular needs of our tenants and neighborhoods.
Units Outstanding*:
Common Shares: 17.2 Million	We have a diverse tenant base concentrated on service offerings such as medical, educational, casual
Operating Partnership Units:	dining and convenience services. These tenants tend to occupy smaller spaces (less than 3,000 square
0.6 Million	feet) and, as of June 30, 2013, provided a 63% premium rental rate compared to our larger
	space tenants. The largest of our 1,168 tenants comprised less than 1.6% of our annualized base
	rental revenues for the three months ended June 30, 2013.

Distribution (per share / unit):	Investor Relations:
Quarter: $ 0.2850	Whitestone REIT
Annualized: $ 1.1400	Suzy Taylor, Director of Investor Relations
Dividend Yield: 7.2%**	2600 South Gessner Suite 500, Houston, Texas 77063
	713.435.2219 email: ir@whitestonereit.com		website: www.whitestonereit.com
Board of Trustees:
James C. Mastandrea	ICR Inc. - Brad Cohen 203.682.8211
Daryl J. Carter	Analyst Coverage:
Daniel G. DeVos	BMO Capital Markets Corp.	J.J.B. Hilliard, W.L. Lyons, LLC	JMP Securities	Robert W. Baird & Co.
Donald F. Keating	Paul Adornato, CFA	Carol L. Kemple	Mitch Germain	Jonathon Pong
Paul T. Lambert	212.885.4170	502.588.1839	212.906.3546	203.425.2740
Jack L. Mahaffey	Paul.Adornato@bmo.com	ckemple@hilliard.com	mgermain@jmpsecurities.com	jpong@rwbaird.com

* As of August 2, 2013	Wunderlich Securities, Inc.
** Based on common share price	Merril Ross
of $15.82 as of close of market on	703.669.9255
August 2, 2013	mross@wundernet.com

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PRESS RELEASE

Contact Whitestone REIT:

Suzy Taylor, Director of Investor Relations

(713) 435-2219 ir@whitestonereit.com

WHITESTONE REIT ANNOUNCES OPERATING RESULTS FOR SECOND QUARTER 2013


•	Funds from Operations Core (“FFO Core”) per share grew over 13% to $0.26 compared to the prior year quarter


•	Revenue increased 35% to $14.8 million for the second quarter 2013 over prior year quarter


•	40% increase in quarterly property net operating income ("NOI")


•	Leased 207,609 square feet in the second quarter primarily with tenants that required less than 3,000 square feet

Houston, Texas, August 5, 2013 - Whitestone REIT (NYSE: WSR - “Whitestone” or the “Company”), a fully integrated real estate company that owns, re-develops, leases, manages, and operates Community Centered Properties^TM, announced its financial results for the second quarter of 2013. Compared to the prior year, for the second quarter 2013, Revenue increased 35% to $14.8 million, Property net operating income ("NOI") increased 40%, to $9.4 million, and Funds from Operations Core (“FFO Core”) grew 13%, or $0.03 per share, to $0.26. The Company also increased its gross real estate assets by $177.4 million, or 58% since June 30, 2012, and in the second quarter 2013, leased 207,609 square feet of new and renewal space.

"We are pleased with our progress executing our strategic plan to grow and add value to our Community Centered Properties^TM," said James C. Mastandrea, Chairman and Chief Executive Officer. "Our focus continues to be on new accretive acquisitions that can be repositioned, expanded, and leased to stabilized occupancy. Furthermore, our team is committed to executing on the redevelopment, repositioning, and leasing of our owned core properties to stabilized occupancies and lowering our overall cost of capital through judicious refinancing. With our progress in these markets and our infra-structure in place, we expect to make additional acquisitions in Houston and expand our Dallas and San Antonio portfolios, while recycling capital through the select sale of some of our legacy properties in Texas.”

Highlights: Second Quarter 2013 Compared to Second Quarter 2012


•	FFO Core increased 62%, or approximately $1.8 million, to $4.6 million.


•	FFO Core per diluted common share and unit of limited partnership interest in the Company's operating partnership ("OP unit") increased to $0.26, as compared to $0.23. FFO Core excludes acquisition expenses of $344,000 and $130,000 in the second quarter of 2013 and 2012, respectively.


•	FFO was $4.3 million, or $0.24 per diluted common share and OP unit, as compared to $2.7 million, or $0.22 per diluted common share and OP unit.


•	Property NOI increased 40% or $2.7 million to $9.4 million.


•	Net income attributable to Whitestone REIT grew 125% to $970,000, or $0.06 per diluted common share.

Mastandrea added, “Whitestone posted considerable gains in its financial and operating metrics in the second quarter, driven primarily by the $171.4 million in acquisitions completed since June 30, 2012. Performance of our real estate portfolio strengthened, with operating occupancy increasing to 87% at the end of the second quarter, from 86% at the end of the prior quarter. Our key focus areas, acquisitions, Core FFO per share growth, and leasing up our Community Centered Properties^TM, , produced favorable results and should provide momentum into the second half of the year and beyond. We will continue to execute on our strategy of driving leasing and converting the intrinsic value embedded within our properties to net asset value.”

Second Quarter 2013 Leasing Highlights

The Company's total occupancy was 86% as of the end of the second quarter of 2013, a 2% improvement from the quarter ended March 31, 2013 and a 1% decrease from second quarter of 2012.

The occupancy of Whitestone's Operating Portfolio was 87% as of June 30, 2013, up 1% from the quarter ended March 31, 2013 and the same as the second quarter 2012. The Company defines Operating Portfolio Occupancy Rate as physical

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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.

The Company signed 87 new and renewal leases, primarily with tenants that required less than 3,000 square feet, representing 207,609 square feet during the second quarter of 2013. The Company also added 205 new tenants to its roster since June 30, 2012.

Community Centered Properties^TM Portfolio Statistics

As of June 30, 2013, Whitestone owned 55 Community Centered Properties^TM with approximately 4.6 million square feet of gross leasable area, including four development land parcels, located in five of the top markets in the United States in terms of population growth: Houston, Dallas, San Antonio, Phoenix and Chicago.

The Company's strategic efforts target entrepreneurial tenants that provide services to the surrounding neighborhood at each Community Centered Property^TM. These tenants tend to occupy smaller spaces (less than 3,000 square feet) and, as of June 30, 2013, provided a 63% premium rental rate compared to Whitestone's larger space tenants. As of June 30, 2013, the Company serviced approximately 1,200 tenants throughout its portfolio. No single tenant accounted for more than 1.6% of the Company's annualized base rental revenues as of June 30, 2013.

Balance Sheet

Undepreciated real estate assets as of June 30, 2013 of $481.9 million increased 58%, or $177.4 million, as compared to June 30, 2012.

Whitestone had 27 properties unencumbered by mortgage debt as of June 30, 2013, with an undepreciated cost basis of $256.3 million. The total undepreciated value of the Company's real estate assets was $481.9 million and $304.5 million as of June 30, 2013 and 2012, respectively. As of June 30, 2013, $165.7 million, or approximately 62%, of the Company's debt was subject to fixed interest rates. The Company's weighted average interest rate on all debt as of the end of the second quarter was 3.8% per annum. Real estate debt as a percentage of total market capitalization was 48% as of June 30, 2013 as compared to 43% as of June 30, 2012.

On May 31, 2013, the Company refinanced a maturing mortgage on its Pinnacle Of Scottsdale property and entered into a $20.2 million Commercial Mortgage Backed Security loan. The loan is non-recourse and has a principal balance of $20.2 million, at a fixed interest rate of 4.3%, two years of interest only payments followed by a 30-year amortization schedule until maturity at July 6, 2023. Proceeds from this loan were used to payoff the Company's $14.1 million promissory note that accrued interest at a fixed interest rate of 5.7% which matured on June 1, 2013, and the remainder was used for working capital purposes.

On June 19, 2013, Whitestone entered into five equity distribution agreements whereby the Company can issue and sell up to $50 million of its common shares. Actual sales will depend on a variety of items, including but not limited to, market conditions, the trading price of the Company's common shares, its capital needs and the Company's determination of the appropriate sources of funding. Transactions that occur will be deemed to be “at-the-market” offerings. The Company has no obligation to sell any of its common shares, and could at any time suspend offers under the agreements or terminate the agreements. As of June 30, 2013, there were no common shares sold under the equity distribution program.

Dividend

The Company declared a quarterly cash distribution of $0.285 per common share and OP unit for the second quarter of 2013, paid or to be paid in three equal installments of $0.095 in July, August, and September 2013. The dividend amount per share has remained the same since the distribution paid on July 8, 2010.

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 Tuesday, August 6, 2013 at 11:30 A.M (Eastern Time). The call will be hosted by James Mastandrea, Chairman and Chief Executive Officer, and David

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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) 723-9523 for domestic participants or 1-(719) 325-4770 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 20, 2013, by dialing 1-(877) 870-5176 for domestic participants or 1-(858) 384-5517 for international participants and entering the pass code 5855879. 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 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) 435-2219.

About Whitestone REIT

Whitestone REIT (NYSE: WSR) is a fully integrated real estate investment trust ("REIT") that owns, operates and redevelops 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 diversified tenant base concentrated on service offerings including medical, education, casual dining, and convenience services. The largest of its approximately 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 contains filings with the Securities and Exchange Commission, 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"). 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," "plan," "expect," "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 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 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.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company cannot guarantee the accuracy of any such forward-looking statements contained in this press release, and the Company does 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

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This release contains the supplemental financial measures that are not calculated pursuant to U.S. generally accepted accounting principles ("GAAP") including FFO, FFO Core, and NOI. Following are explanations 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 that FFO should represent net income available to common shareholders (computed in accordance with GAAP) excluding gains or losses from sales of operating assets, impairment charges and extraordinary items, plus depreciation and amortization of operating properties, including the Company's share of unconsolidated real estate joint ventures and partnerships. 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 and service debt.

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 and useful information for the investment community to compare Whitestone to other REITs since FFO is generally recognized as the industry standard for reporting the operations of REITs.

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 OP units for the periods presented.

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, extraordinary non-recurring expenses, such as those incurred in connection with the relocation agreement entered into with the Company's Chief Executive Officer, legal settlements, legal and professional fees, gains and losses on insurance claim settlements and acquisition costs. Therefore, in addition to FFO, management uses FFO Core, which the Company defines to exclude such items. Management 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 many REITs provide some form of adjusted or modified FFO. However, other REITs may use different adjustments, and the Company's FFO Core may not be comparable to the adjusted or modified FFO of other REITs.

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

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Whitestone REIT and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)



	June 30, 2013			December 31, 2012
	(unaudited)
ASSETS
Real estate assets, at cost
Property	$	481,939		$	409,669
Accumulated depreciation	(59,569		)	(53,920		)
Total real estate assets	422,370			355,749
Cash and cash equivalents	6,020			6,544
Marketable securities	912			1,403
Escrows and acquisition deposits	5,396			6,672
Accrued rents and accounts receivable, net of allowance for doubtful accounts	8,850			7,947
Related party receivable	—			652
Unamortized lease commissions and loan costs	5,079			4,160
Prepaid expenses and other assets	2,864			2,244
Total assets	$	451,491		$	385,371

LIABILITIES AND EQUITY
Liabilities:
Notes payable	$	266,401		$	190,608
Accounts payable and accrued expenses	10,489			13,824
Tenants' security deposits	3,348			3,024
Dividends and distributions payable	5,028			5,028
Total liabilities	285,266			212,484
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, 2013 and December 31, 2012	—			—
Common shares, $0.001 par value per share; 400,000,000 shares authorized; 17,052,980 and 16,943,098 issued and outstanding as of June 30, 2013 and December 31, 2012, respectively	17			16
Additional paid-in capital	225,916			224,237
Accumulated other comprehensive gain (loss)	290			(392		)
Accumulated deficit	(65,555		)	(57,830		)
Total Whitestone REIT shareholders' equity	160,668			166,031
Noncontrolling interest in subsidiary	5,557			6,856
Total equity	166,225			172,887
Total liabilities and equity	$	451,491		$	385,371

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Whitestone REIT and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(unaudited)

(in thousands, except per share data)



	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Property revenues
Rental revenues	$	11,812		$	8,523		$	22,813		$	16,651
Other revenues	2,983			2,464			5,851			4,762
Total property revenues	14,795			10,987			28,664			21,413

Property expenses
Property operation and maintenance	3,348			2,759			6,413			5,111
Real estate taxes	2,012			1,503			3,810			2,813
Total property expenses	5,360			4,262			10,223			7,924

Other expenses (income)
General and administrative	2,516			1,863			4,960			3,504
Depreciation and amortization	3,260			2,290			6,333			4,573
Interest expense	2,613			2,107			5,062			4,080
Interest, dividend and other investment income	(69		)	(83		)	(88		)	(153		)
Total other expense	8,320			6,177			16,267			12,004

Income before loss on sale or disposal of assets and income taxes	1,115			548			2,174			1,485

Provision for income taxes	(72		)	(70		)	(137		)	(135		)
Loss on sale or disposal of assets	(40		)	(16		)	(48		)	(28		)

Net income	1,003			462			1,989			1,322

Less: Net income attributable to noncontrolling interests	33			31			70			98

Net income attributable to Whitestone REIT	$	970		$	431		$	1,919		$	1,224

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Whitestone REIT and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(unaudited)

(in thousands, except per share data)



	Three Months Ended June 30,					Six Months Ended June 30,
	2013			2012		2013		2012
Basic and Diluted Earnings Per Share:
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	0.06		$	0.04	$	0.11	$	0.10

Weighted average number of common shares outstanding:
Basic	16,891			11,746		16,855		11,685
Diluted	17,111			11,754		17,073		11,696

Distributions declared per common share / OP unit	$	0.2850		$	0.2850	$	0.5700	$	0.5700

Consolidated Statements of Comprehensive Income

Net income	$	1,003		$	462	$	1,989	$	1,322

Other comprehensive gain (loss)

Unrealized gain on cash flow hedging activities	761			—		493		—
Unrealized gain (loss) on available-for-sale marketable securities	(88		)	33		215		799

Comprehensive income	1,676			495		2,697		2,121

Less: Comprehensive income attributable to noncontrolling interests	57			30		95		157

Comprehensive income attributable to Whitestone REIT	$	1,619		$	465	$	2,602	$	1,964

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Whitestone REIT and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)



	Six Months Ended June 30,
	2013			2012

Cash flows from operating activities:
Net income	$	1,989		$	1,322
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	6,333			4,573
Amortization of deferred loan costs	554			634
Amortization of notes payable discount	299			—
Gain on sale of marketable securities	(41		)	(32		)
Loss on sale or disposal of assets	48			28
Bad debt expense	715			358
Share-based compensation	667			266
Changes in operating assets and liabilities:
Escrows and acquisition deposits	1,619			1,229
Accrued rents and accounts receivable	(966		)	(1,064		)
Unamortized lease commissions	(517		)	(600		)
Prepaid expenses and other assets	246			298
Accounts payable and accrued expenses	(2,990		)	(1,917		)
Tenants' security deposits	324			161
Net cash provided by operating activities	8,280			5,256

Cash flows from investing activities:
Acquisitions of real estate	(58,403		)	(6,400		)
Additions to real estate	(2,476		)	(6,465		)
Investments in marketable securities	—			(750		)
Proceeds from sales of marketable securities	747			3,926
Net cash used in investing activities	(60,132		)	(9,689		)

Cash flows from financing activities:
Distributions paid to common shareholders	(9,639		)	(6,684		)
Distributions paid to OP unit holders	(363		)	(559		)
Payments of exchange offer costs	(23		)	(306		)
Proceeds from notes payable	20,200			13,156
Proceeds from revolving credit facility, net	58,400			—
Repayments of notes payable	(15,844		)	(1,819		)
Payments of loan origination costs	(1,403		)	(1,187		)
Net cash provided by financing activities	51,328			2,601

Net decrease in cash and cash equivalents	(524		)	(1,832		)
Cash and cash equivalents at beginning of period	6,544			5,695
Cash and cash equivalents at end of period	$	6,020		$	3,863

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Whitestone REIT and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)



	Six Months Ended June 30,
	2013		2012
Supplemental disclosure of cash flow information:
Cash paid for interest	$	4,597	$	3,375
Cash paid for taxes	$	237	$	225
Non cash investing and financing activities:
Disposal of fully depreciated real estate	$	185	$	523
Financed insurance premiums	$	883	$	780
Value of shares issued under dividend reinvestment plan	$	47	$	45
Debt assumed with acquisitions of real estate	$	11,100	$	—
Interest supplement assumed with acquisition of real estate	$	932	$	—
Accrued offering costs	$	13	$	28
Value of common shares exchanged for OP units	$	1,056	$	6,224
Change in fair value of available-for-sale securities	$	215	$	799
Change in fair value of cash flow hedge	$	493	$	—

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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,
	2013			2012			2013			2012
FFO AND FFO CORE
Net income attributable to Whitestone REIT	$	970		$	431		$	1,919		$	1,224
Depreciation and amortization of real estate assets	3,239			2,254			6,289			4,503
Loss on disposal of assets	40			16			48			28
Net income attributable to noncontrolling interests	33			31			70			98
FFO	4,282			2,732			8,326			5,853

Acquisition costs	344			130			482			194
Legal settlement	—			—			—			(131		)
FFO Core	$	4,626		$	2,862		$	8,808		$	5,916

FFO PER SHARE AND OP UNIT:
Numerator:
FFO	$	4,282		$	2,732		$	8,326		$	5,853
Distributions paid on unvested restricted common shares	(11		)	(2		)	(22		)	(6		)
FFO excluding amounts attributable to unvested restricted common shares	$	4,271		$	2,730		$	8,304		$	5,847
FFO Core excluding amounts attributable to unvested restricted common shares	$	4,615		$	2,860		$	8,786		$	5,910

Denominator:
Weighted average number of total common shares - basic	16,891			11,746			16,855			11,685
Weighted average number of total noncontrolling OP units - basic	586			882			619			937
Weighted average number of total commons shares and noncontrolling OP units - basic	17,477			12,628			17,474			12,622

Effect of dilutive securities:
Unvested restricted shares	220			8			218			11
Weighted average number of total common shares and noncontrolling OP units - dilutive	17,697			12,636			17,692			12,633

FFO per common share and OP unit - basic	$	0.24		$	0.22		$	0.48		$	0.46
FFO per common share and OP unit - diluted	$	0.24		$	0.22		$	0.47		$	0.46

FFO Core per common share and OP unit - basic	$	0.26		$	0.23		$	0.50		$	0.47
FFO Core per common share and OP unit - diluted	$	0.26		$	0.23		$	0.50		$	0.47

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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,
	2013			2012			2013			2012
PROPERTY NET OPERATING INCOME

Net income attributable to Whitestone REIT	$	970		$	431		$	1,919		$	1,224
General and administrative expenses	2,516			1,863			4,960			3,504
Depreciation and amortization	3,260			2,290			6,333			4,573
Interest expense	2,613			2,107			5,062			4,080
Interest, dividend and other investment income	(69		)	(83		)	(88		)	(153		)
Provision for income taxes	72			70			137			135
Loss on disposal of assets	40			16			48			28
Net income attributable to noncontrolling interests	33			31			70			98
NOI	$	9,435		$	6,725		$	18,441		$	13,489

EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION

Net income attributable to Whitestone REIT	$	970		$	431		$	1,919		$	1,224
Depreciation and amortization	3,260			2,290			6,333			4,573
Interest expense	2,613			2,107			5,062			4,080
Provision for income taxes	72			70			137			135
Loss on disposal of assets	40			16			48			28
Net income attributable to noncontrolling interests	33			31			70			98
EBITDA ⁽¹⁾	$	6,988		$	4,945		$	13,569		$	10,138



	Three Months Ended
	June 30,		March 31.		December 31,			September 30,
	2013		2013		2012			2012
Net income (loss) attributable to Whitestone REIT	$	970	$	949	$	(1,380	)	$	163
Depreciation and amortization	3,260		3,073		2,973			2,683
Executive relocation expense	—		—		2,177			—
Interest expense	2,613		2,449		2,408			2,244
Provision for income taxes	72		65		74			77
Loss on disposal of assets	40		8		7			77
Net income (loss) attributable to noncontrolling interests	33		37		(61		)	9
EBITDA ⁽¹⁾	$	6,988	$	6,581	$	6,198		$	5,253

⁽¹⁾

Earnings Before Interest, Tax, Depreciation and Amortization ("EBITDA"): Management believes that EBITDA is an appropriate supplemental measure of operating performance to net income attributable to the Company. 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, excluding executive relocation costs related to the disposition of the Chief Executive Officer's residence in Cleveland, Ohio pursuant to the executive relocation arrangement approved by the Company's compensation committee. 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, provision for income taxes, gain or loss on sale or disposition of assets, and the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company's properties. Other REITs may use different methodologies for calculating EBITDA and, accordingly, the Company's EBITDA may not be comparable to other REITs.

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012

Other Financial Information:

Tenant improvements ⁽¹⁾	$	782	$	353	$	1,705	$	919
Leasing commissions⁽¹⁾	$	194	$	181	$	556	$	385
Scheduled debt principal payments	$	767	$	723	$	1,526	$	1,417
Straight line rent income (loss)	$	242	$	118	$	467	$	47
Market rent amortization income (loss) from acquired leases	$	16	$	7	$	49	$	11
Non-cash share-based compensation expense	$	311	$	188	$	667	$	266
Non-real estate depreciation and amortization	$	21	$	36	$	44	$	69
Amortization of loan fees	$	281	$	373	$	554	$	634
Acquisition costs	$	344	$	130	$	482	$	194
Undepreciated value of unencumbered properties	$	256,343	$	121,147	$	256,343	$	121,147
Number of unencumbered properties	27		20		27		20
Full time employees	68		56		68		56


⁽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.

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Whitestone REIT and Subsidiaries

MARKET CAPITALIZATION AND SELECTED RATIOS

(in thousands, except per share amounts and percentages)



	As of June 30, 2013
MARKET CAPITALIZATION:	Percent of Total Equity		Total Market Capitalization			Percent of Total Market Capitalization
Equity Capitalization:
Common shares outstanding	96.7	%	17,053
Operating partnership units outstanding	3.3	%	579
Total	100.0	%	17,632

Market price of common shares as of
June 30, 2013			$	15.76

Total equity capitalization			277,880			52	%

Debt Capitalization:
Outstanding debt			$	266,401
Less: Cash and cash equivalents			(6,020		)
			260,381			48	%

Total Market Capitalization as of
June 30, 2013			$	538,261		100	%



SELECTED RATIOS: (dollars in thousands)
	Three Months Ended
	June 30,			March 31.			December 31,			September 30,
	2013			2013			2012			2012
INTEREST COVERAGE RATIO
EBITDA/Interest Expense
EBITDA	$	6,988		$	6,581		$	6,198		$	5,253
Interest expense, excluding amortization of loan fees	2,331			2,176			2,101			1,947
Ratio of interest expense to EBITDA	3.0			3.0			3.0			2.7

LEVERAGE RATIO
Debt/Undepreciated Book Value
Undepreciated real estate assets	$	481,939		$	436,331		$	409,669		$	389,280

Outstanding debt	$	266,401		$	216,935		$	190,608		$	167,816
Less: Cash	(6,020		)	(2,843		)	(6,544		)	(8,339		)
Outstanding debt after cash	$	260,381		$	214,092		$	184,064		$	159,477
Ratio of debt to real estate assets	54		%	49		%	45		%	41		%

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Whitestone REIT and Subsidiaries

SUMMARY OF OUTSTANDING DEBT AND DEBT MATURITIES

TOTAL OUTSTANDING DEBT

(in thousands)



Description	June 30, 2013		December 31, 2012
Fixed rate notes
$1.1 million 4.71% Note, due 2013	$	1,087	$	1,087
$20.2 million 4.2805% Note, due 2023 ⁽¹⁾	20,200		13,850
$3.0 million 6.00% Note, due 2021⁽²⁾	2,924		2,943
$10.0 million 6.04% Note, due 2014	9,047		9,142
$1.5 million 6.50% Note, due 2014	1,430		1,444
$11.2 million 6.52% Note, due 2015	10,528		10,609
$21.4 million 6.53% Notes, due 2013	18,530		18,865
$24.5 million 6.56% Note, due 2013	22,892		23,135
$9.9 million 6.63% Notes, due 2014	8,758		8,925
$9.2 million, Prime Rate less 2.00%, due 2017 ⁽³⁾	7,868		7,854
$11.1 million 5.87% Note, due 2016	12,031		—
$0.9 million 2.97% Note, due 2013	387		15
Floating rate notes
Unsecured credit facility, LIBOR plus 1.75% to 2.50%, due 2017 ⁽⁴⁾	127,400		69,000
$26.9 million, LIBOR plus 2.86% Note, due 2013	23,319		23,739
	$	266,401	$	190,608


⁽¹⁾	Promissory note had an original balance of $14.1 million and an interest rate of 5.695%, due in 2013, which was refinanced in May 2013.


⁽²⁾	The 6.00% interest rate is fixed through March 30, 2016. On March 31, 2016, the interest rate will 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.


⁽³⁾	Promissory note includes an interest rate swap that fixed the interest rate at 5.72% for the duration of the term.


⁽⁴⁾	We have entered into an interest rate swap that fixed the LIBOR portion of our $50 million term loan under our unsecured credit facility at 0.84%. The swap will begin on January 7, 2014 and will mature on February 3, 2017.

SCHEDULE OF DEBT MATURITIES AS OF JUNE 30, 2013

(in thousands)



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

2013 (remainder of year)	$	1,475	$	65,233	$	66,708	25.0	%
2014	574		18,879		19,453		7.3	%
2015	640		10,146		10,786		4.0	%
2016	625		11,100		11,725		4.4	%
2017	451		135,238		135,689		50.9	%
2018 and thereafter	2,434		19,606		22,040		8.4	%
Total	$	6,199	$	260,202	$	266,401	100.0	%

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Whitestone REIT and Subsidiaries SUMMARY OF OCCUPANCY AND TOP TENANTS

	Gross Leasable Area as of	Occupancy % as of
Community Centered Properties	June 30, 2013	June 30, 2013		March 31, 2013		December 31, 2012		September 30, 2012
Retail	2,291,617	89	%	87	%	88	%	88	%
Office/Flex	1,201,672	87	%	87	%	89	%	89	%
Office	633,534	79	%	77	%	78	%	78	%
Total - Operating Portfolio	4,126,823	87	%	86	%	87	%	87	%
Redevelopment, New Acquisitions ⁽¹⁾	470,718	74	%	72	%	70	%	70	%
Total	4,597,541	86	%	84	%	85	%	85	%


⁽¹⁾	Includes 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.



Tenant Name	Location	Annualized Base Rental Revenue (in thousands)		Percentage of Total Annualized Base Rental Revenues ⁽¹⁾		Initial Lease Date	Year Expiring

Safeway Stores, Incorporated ⁽²⁾	Phoenix	$	770	1.6	%	07/12/2000 and 05/08/1991	2020 and 2021
University of Phoenix	San Antonio	500		1.0	%	10/18/2010	2018
Sports Authority	San Antonio	495		1.0	%	1/1/2004	2015
Walgreens Co. ⁽³⁾	Phoenix	448		0.9	%	11/05/1996 and 11/02/1987	2049 and 2027
Air Liquide America, L.P.	Dallas	387		0.8	%	8/1/2001	2013
Super Bravo, Inc	Houston	349		0.7	%	6/15/2011	2023
KinderCare Learning Centers LLC ⁽⁴⁾	Phoenix	325		0.7	%	05/07/2001 and 09/14/1999	2021 and 2035
Barnes & Noble Booksellers, Inc	Phoenix	314		0.6	%	4/5/2004	2014
X-Ray Press Corporation	Houston	291		0.6	%	7/1/1998	2019
Sterling Jewelers Inc	Phoenix	277		0.6	%	11/23/2004	2020
Rock Solid Images	Houston	266		0.5	%	4/1/2004	2013
Marshall's	Houston	264		0.5	%	5/12/1983	2018
Merrill Corporation	Dallas	261		0.5	%	12/10/2001	2014
Skechers USA, Inc ⁽⁵⁾	Houston and San Antonio	250		0.5	%	02/17/2012 and 05/25/2012	2017
Mini Skool Early Learning Centers, Inc.	Phoenix	249		0.5	%	7/1/2009	2019
		$	5,446	11.0	%


⁽¹⁾	Annualized Base Rental Revenues represents the monthly base rent as of June 30, 2013 for each applicable tenant multiplied by 12.

Table of Contents

⁽²⁾

As of June 30, 2013, we had two leases with the same tenant occupying space at properties located in Phoenix. The annualized rental revenue for the lease that commenced on July 12, 2000, and is scheduled to expire in 2020, was $425,000, which represents 0.9% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on May 8, 1991, and is scheduled to expire in 2021, was $344,000, which represents 0.7% of our total annualized base rental revenue.

⁽³⁾

As of June 30, 2013, we had two leases with the same tenant occupying space at properties located in Phoenix. The annualized rental revenue for the lease that commenced on November 5, 1996, and is scheduled to expire in 2049, was $279,000, which represents 0.6% of out total annualized base rental revenue. The annualized rental revenue for the lease that commenced on November 2, 1987, and is scheduled to expire in 2027, was $169,000, which represents 0.3% of our total annualized base rental revenue.

⁽⁴⁾

As of June 30, 2013, we had two leases with the same tenant occupying space at properties located in Phoenix. The annualized rental revenue for the lease that commenced on May 7, 2001, and is scheduled to expire in 2021, was $270,000, which represents 0.6% of our total annualized base rental revenue. The annualized rental revenue for the lease that commenced on September 14, 1999, and is scheduled to expire in 2035, was $55,000, which represents 0.1% of our total annualized base rental revenue.

⁽⁵⁾

As of June 30, 2013, we had two leases with the same tenant occupying space at properties located in San Antonio and Houston. The San Antonio lease commenced on May 25, 2012 and is scheduled to expire in 2017. The annualized rental revenue for this location was $120,000, which represents 0.2% of our total annualized base rental revenue. The Houston lease commenced on February 17, 2012 and is scheduled to expire in 2017. The annualized rental revenue was $129,500, which represents 0.3% of our total annualized base rental revenue.

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Whitestone REIT and Subsidiaries SUMMARY OF LEASING ACTIVITY

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
RENEWALS
Number of Leases	37		42		82		90
Total Square Feet ⁽¹⁾	88,161		104,189		162,048		181,844
Average Square Feet	2,383		2,481		1,976		2,020
Total Lease Value	$	5,373,000	$	5,868,000	$	8,922,000	$	8,714,000
NEW LEASES
Number of Leases	50		50		76		92
Total Square Feet ⁽¹⁾	119,448		85,376		176,458		166,888
Average Square Feet	2,389		1,708		2,322		1,814
Total Lease Value	$	7,937,000	$	3,599,000	$	11,468,000	$	7,583,000
TOTAL LEASES
Number of Leases	87		92		158		182
Total Square Feet ⁽¹⁾	207,609		189,565		338,506		348,732
Average Square Feet	2,386		2,060		2,142		1,916
Total Lease Value	$	13,310,000	$	9,467,000	$	20,390,000	$	16,297,000


⁽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 Sq. Ft.		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:⁽¹⁾

Comparable Total Leases:
2nd Quarter 2013	28	$	3,059,381	48,620	3.2	$	117,774	$	2.42	$	14.44	$	14.89	$	(21,921	)	(3.0	)%	$	44,137		6.3	%
1st Quarter 2013	44	2,177,934		64,759	2.5	79,790		1.23		12.95		13.12		(11,028		)	(1.3	)%	40,186			4.9	%
4th Quarter 2012	45	3,137,053		125,999	3.2	398,310		3.16		11.36		11.62		(32,232		)	(2.2	)%	39,065			3.3	%
3rd Quarter 2012	35	3,292,250		85,990	5.3	450,340		5.24		8.56		9.99		(121,968		)	(14.3	)%	(57,331		)	(7.0	)%
Total - 12 months	152	$	11,666,618	325,368	3.6	$	1,046,214	$	3.22	$	11.40	$	11.98	$	(187,149	)	(4.8	)%	$	66,057		1.9	%

Comparable New Leases:
2nd Quarter 2013	9	$	524,647	15,182	2.2	$	64,652	$	4.26	$	9.08	$	10.22	$	(17,280	)	(11.2	)%	$	9,852		6.9	%
1st Quarter 2013	8	456,268		12,577	2.8	20,581		1.64		11.41		11.48		(948		)	(0.6	)%	19,284			14.6	%
4th Quarter 2012	11	735,111		19,142	3.2	117,495		6.14		11.45		13.15		(32,549		)	(12.9	)%	(15,744		)	(6.6	)%
3rd Quarter 2012	16	2,115,518		47,862	7.4	347,194		7.25		7.41		9.01		(76,257		)	(17.8	)%	(55,920		)	(13.5	)%
Total - 12 months	44	$	3,831,544	94,763	5.1	$	549,922	$	5.80	$	9.03	$	10.37	$	(127,034	)	(12.9	)%	$	(42,528	)	(4.6	)%

Comparable Renewal Leases:
2nd Quarter 2013	19	$	2,534,734	33,438	3.7	$	53,122	$	1.59	$	16.88	$	17.02	$	(4,641	)	(0.8	)%	$	34,285		6.2	%
1st Quarter 2013	36	1,721,666		52,182	2.4	59,209		1.13		13.32		13.51		(10,080		)	(1.4	)%	20,902			3.1	%
4th Quarter 2012	34	2,401,942		106,857	3.2	280,815		2.63		11.34		11.34		317			—	%	54,809			5.8	%
3rd Quarter 2012	19	1,176,732		38,128	2.6	103,146		2.71		10.01		11.20		(45,711		)	(10.6	)%	(1,411		)	(0.4	)%
Total - 12 months	108	$	7,835,074	230,605	3.0	$	496,292	$	2.15	$	12.37	$	12.63	$	(60,115	)	(2.2	)%	$	108,585		4.2	%

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 Sq. Ft.		Contractual Rent Per Sq. Ft. ⁽⁴⁾

Non-comparable:

Non-Comparable Total Leases:
2nd Quarter 2013	59	$	10,250,630	220,446	4.2	$	1,131,700	$	5.13	$	10.42
1st Quarter 2013	27	4,902,083		87,641	4.9	637,970		7.28		11.21
4th Quarter 2012	33	8,116,860		116,384	4.9	1,351,377		11.61		13.70
3rd Quarter 2012	28	4,381,167		93,111	4.4	493,052		5.30		15.01
Total - 12 months	147	$	27,650,740	517,582	4.5	$	3,614,099	$	6.98	$	12.12

Non-Comparable New Leases:
2nd Quarter 2013	41	$	7,412,645	137,293	4.4	$	803,627	$	5.85	$	11.22
1st Quarter 2013	18	3,074,881		57,506	5.3	370,645		6.45		9.90
4th Quarter 2012	30	7,206,883		103,297	4.9	1,217,136		11.78		13.67
3rd Quarter 2012	23	3,647,742		70,728	5.2	449,193		6.35		14.51
Total - 12 months	112	$	21,342,151	368,824	4.8	$	2,840,601	$	7.70	$	12.33

Non-Comparable Renewal Leases:
2nd Quarter 2013	18	$	2,837,985	83,153	3.9	$	328,073	$	3.95	$	9.11
1st Quarter 2013	9	1,827,202		30,135	4.2	267,325		8.87		13.71
4th Quarter 2012	3	909,977		13,087	4.7	134,241		10.26		13.95
3rd Quarter 2012	5	733,425		22,383	2.1	43,859		1.96		16.58
Total - 12 months	35	$	6,308,589	148,758	3.8	$	773,498	$	5.20	$	11.59

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 Sq. Ft.		Contractual Rent Per Sq. Ft. ⁽⁴⁾

Total:

New & Renewal
2nd Quarter 2013	87	$	13,310,011	269,066	4.1	$	1,249,474	$	4.64	$	11.15
1st Quarter 2013	71	7,080,017		152,400	3.9	717,760		4.71		11.95
4th Quarter 2012	78	11,253,913		242,383	4.0	1,749,687		7.22		12.48
3rd Quarter 2012	63	7,673,417		179,101	4.8	943,392		5.27		11.91
Total - 12 months	299	$	39,317,358	842,950	4.2	$	4,660,313	$	5.53	$	11.84

New
2nd Quarter 2013	50	$	7,937,292	152,475	4.2	$	868,279	$	5.69	$	11.01
1st Quarter 2013	26	3,531,149		70,083	4.9	391,226		5.58		10.17
4th Quarter 2012	41	7,941,994		122,439	4.6	1,334,631		10.90		13.32
3rd Quarter 2012	39	5,763,260		118,590	6.1	796,387		6.72		11.65
Total - 12 months	156	$	25,173,695	463,587	4.9	$	3,390,523	$	7.31	$	11.66

Renewal
2nd Quarter 2013	37	$	5,372,719	116,591	3.9	$	381,195	$	3.27	$	11.34
1st Quarter 2013	45	3,548,868		82,317	3.0	326,534		3.97		13.46
4th Quarter 2012	37	3,311,919		119,944	3.3	415,056		3.46		11.63
3rd Quarter 2012	24	1,910,157		60,511	2.4	147,005		2.43		12.44
Total - 12 months	143	$	14,143,663	379,363	3.3	$	1,269,790	$	3.35	$	12.07


⁽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 of tenant improvements (TI) and incentives 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 TI 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.

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Whitestone REIT LEASE EXPIRATIONS⁽¹⁾

					Annualized Base Rent⁽²⁾
		Gross Leasable Area			as of June 30, 2013
Year	Number of Leases	Square Feet	Percent of Gross Leasable Area		Amount (in thousands)		Percent of Total		Per Square Foot
2013	213	436,026	9.5	%	$	6,115	12.4	%	$	14.02
2014	291	803,651	17.5	%	10,296		20.9	%	12.81
2015	201	587,285	12.8	%	6,815		13.9	%	11.60
2016	159	465,811	10.1	%	6,225		12.7	%	13.36
2017	122	413,512	9.0	%	6,015		12.2	%	14.55
2018	78	385,330	8.4	%	4,421		9.0	%	11.47
2019	28	169,631	3.7	%	2,381		4.8	%	14.04
2020	15	126,801	2.8	%	1,472		3.0	%	11.61
2021	16	142,802	3.1	%	1,758		3.6	%	12.31
2022	19	151,571	3.3	%	1,758		3.6	%	11.60
Total	1,142	3,682,420	80.2	%	$	47,256	96.1	%	$	12.83


⁽¹⁾	Lease expirations table reflects rents in place as of June 30, 2013, and does not include option periods.


⁽²⁾	Annualized Base Rent represents the monthly base rent as of June 30, 2013 for each tenant multiplied by 12.

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Whitestone REIT and Subsidiaries Property Details As of June 30, 2013

Community Name	Location	Year Built/ Renovated	Gross Leasable Area	Percent Occupied		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:
Ahwatukee Plaza	Phoenix	1979	72,650	100	%	$	922	12.69		$	12.51
Anthem Marketplace	Phoenix	2000	113,293	100	%	1,844		16.28		$	16.28
Bellnott Square	Houston	1982	73,930	41	%	287		9.47		9.44
Bissonnet/Beltway	Houston	1978	29,205	96	%	312		11.13		11.34
Centre South	Houston	1974	39,134	86	%	233		6.92		8.53
The Citadel	Phoenix	1985	28,547	85	%	346		14.26		16.24
Desert Canyon	Phoenix	2000	62,533	75	%	546		11.64		11.79
Gilbert Tuscany Village	Phoenix	2009	49,415	47	%	420		18.08		19.38
Holly Knight	Houston	1984	20,015	100	%	322		16.09		15.89
Headquarters Village	Dallas	2009	89,134	96	%	2,326		27.18		28.62
Kempwood Plaza	Houston	1974	101,008	99	%	860		8.60		8.52
Lion Square	Houston	1980	117,592	100	%	1,122		9.54		9.73
MarketPlace At Central	Phoenix	2000	111,130	47	%	417		7.98		8.23
Mercado at Scottsdale Ranch	Phoenix	1987	118,730	100	%	1,746		14.71		14.71
Paradise Plaza	Phoenix	1993	125,898	93	%	1,578		13.48		13.81
Pinnacle of Scottsdale	Phoenix	1991	113,108	98	%	2,088		18.84		18.96
Providence	Houston	1980	90,327	85	%	688		8.96		7.10
Shaver	Houston	1978	21,926	93	%	252		12.36		11.72
Shops at Pecos Ranch	Phoenix	2009	78,767	98	%	1,640		21.25		21.25
Shops at Starwood	Dallas	2006	55,385	100	%	1,485		26.81		27.48
South Richey	Houston	1980	69,928	98	%	498		7.27		8.45
Spoerlein Commons	Chicago	1987	41,455	93	%	782		20.28		19.92
SugarPark Plaza	Houston	1974	95,032	100	%	1,027		10.81		10.50
Sunridge	Houston	1979	49,359	95	%	441		9.40		9.23
Terravita Marketplace	Phoenix	1997	102,733	95	%	1,285		13.17		13.49
Torrey Square	Houston	1983	105,766	88	%	597		6.41		7.33
Town Park	Houston	1978	43,526	100	%	814		18.70		18.10
Webster Point	Houston	1984	26,060	79	%	222		10.78		10.15
Westchase	Houston	1978	49,573	85	%	510		12.10		11.77
Windsor Park	San Antonio	1992	196,458	85	%	1,680		10.06		9.67
			2,291,617	89	%	27,290		13.38		13.50
Office/Flex Communities:
Brookhill	Houston	1979	74,757	91	%	$	216	$	3.18	$	4.69
Corporate Park Northwest	Houston	1981	185,627	75	%	1,436		10.31		10.26
Corporate Park West	Houston	1999	175,665	93	%	1,489		9.11		7.75
Corporate Park Woodland	Houston	2000	99,937	100	%	904		9.05		8.95
Dairy Ashford	Houston	1981	42,902	96	%	233		5.66		5.51
Holly Hall	Houston	1980	90,000	100	%	753		8.37		8.26
Interstate 10	Houston	1980	151,000	79	%	657		5.51		5.52

Table of Contents

Whitestone REIT and Subsidiaries Property Details As of June 30, 2013 (continued)

Community Name	Location	Year Built/ Renovated	Gross Leasable Area	Percent Occupied		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⁾
Main Park	Houston	1982	113,410	100	%	732		6.45		6.62
Plaza Park	Houston	1982	105,530	64	%	608		9.00		6.60
Westbelt Plaza	Houston	1978	65,619	76	%	417		8.36		8.84
Westgate	Houston	1984	97,225	100	%	576		5.92		5.91
			1,201,672	87	%	8,021		7.67		7.41
Office Communities:
9101 LBJ Freeway	Dallas	1985	125,874	70	%	$	1,384	$	15.71	$	15.37
Featherwood	Houston	1983	49,760	89	%	820		18.52		18.36
Pima Norte	Phoenix	2007	35,110	22	%	141		18.25		17.74
Royal Crest	Houston	1984	24,900	70	%	218		12.51		12.22
Uptown Tower	Dallas	1982	253,981	84	%	3,744		17.55		17.29
Woodlake Plaza	Houston	1974	106,169	94	%	1,401		14.04		13.74
Zeta Building	Houston	1982	37,740	89	%	569		16.94		16.17
			633,534	79	%	8,277		16.54		16.22

Total/Weighted Average- Operating Portfolio			4,126,823	87	%	43,588		12.14		12.09

Dana Park	Phoenix	2007	310,979	75	%	3,667		15.72		18.44
Fountain Square	Phoenix	1986	118,209	71	%	1,325		15.79		17.79
The Shops at Pinnacle Peak	Phoenix	2000	41,530	76	%	595		18.85		19.04
Total/Weighted Average - Development Portfolio			470,718	74	%	5,587		16.04		18.36

Anthem Marketplace	Phoenix		—	—	%	—		—		—
Dana Park Development	Phoenix		—	—	%	—		—		—
Pinnacle Phase II	Phoenix		—	—	%	—		—		—
Shops at Starwood Phase III	Dallas		—	—	%	—		—		—
Total/Weighted Average - Property Held For Development ⁽⁴⁾			—	—	%	—		—		—

Grand Total/Weighted Average			4,597,541	86	%	$	49,175	$	12.44	$	12.59

⁽¹⁾

Calculated as the tenant's actual June 30, 2013 base rent (defined as cash base rents including abatements) multiplied by 12. Excludes vacant space as of June 30, 2013. 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, 2013 equaled approximately $189,000 for the month ended June 30, 2013.


⁽²⁾	Calculated as annualized base rent divided by square feet leased as of June 30, 2013. Excludes vacant space as of June 30, 2013.

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⁽³⁾	Represents (i) the contractual base rent for leases in place as of June 30, 2013, 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 as of June 30, 2013.


⁽⁴⁾	As of June 30, 2013, these properties are held for development with no gross leasable area.

Whitestone REIT - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - August 5, 2013

Attached files

Whitestone REIT Reports