"Whitestone is solidly on track to deliver on its peer leading long-term Core FFO per share growth target of 5-7%. Operational excellence combined with the 2nd highest percentage of shop space within the peer group has enabled Whitestone to deliver compounded annual growth in excess of 5% for Core FFO per share since 2021. Today management is reiterating its intention to extend that track record. Whitestone has also moved its Green Street portfolio Trade Area Power (TAP) score up by the greatest percentage versus its peer set over the past 3 years as growth within Texas and Arizona pairs with Whitestone's capital recycling program to enhance our property values and value for our shareholders."
– Dave Holeman, Chief Executive Officer
Third Quarter 2025 Operating and Financial ResultsAll per share amounts are on a diluted per common share and operating partnership ("OP") unit basis unless stated otherwise.Reconciliations of Net Income Attributable to Whitestone REIT to FFO, Core FFO, NOI and EBITDAre are included herein.
Revenues of $41.0 million versus $38.6 million for the third quarter of 2024.
Net Income attributable to common shareholders of $18.3 million, or $0.35 per diluted share, versus $7.6 million, or $0.15 per diluted share for the third quarter of 2024.
Core Funds from Operations ("Core FFO") of $13.7 million versus $13.0 million for the third quarter of 2024.
Core FFO per diluted share was $0.26 versus $0.25 for the third quarter of 2024.
Funds From Operations ("FFO") of $12.9 million versus $13.0 million for the third quarter of 2024.
FFO per diluted share of $0.24 versus $0.25 for the third quarter of 2024.
EBITDAre of $22.5 million versus $21.6 million for the third quarter of 2024.
Same-Store Net Operating Income ("NOI") grew 4.8% to $25.6 million versus $24.4 million for the third quarter of 2024.
Net Effective Annual Base Rental Revenue per leased square foot was up 8.2% to $25.59, compared to the prior year quarter.
Year-to-date Operating and Financial ResultsAll per share amounts are on a diluted per common share and operating partnership ("OP") unit basis unless stated otherwise.Reconciliations of Net Income Attributable to Whitestone REIT to FFO, Core FFO, NOI and EBITDAre are included herein.
Revenues of $116.9 million versus $113.4 million for the same period in 2024.
Net Income attributable to commons shareholders of $27.1 million, or $0.52 per diluted share, versus $19.6 million, or $0.38 per diluted share for the same period in 2024.
Core Funds from Operations ("Core FFO") of $40.3 million versus $37.8 million for the same period in 2024.
Core FFO per diluted share was $0.77 versus $0.73 for the third quarter of 2024.
Funds From Operations ("FFO") of $39.5 million versus $36.1 million for the same period in 2024.
FFO per diluted share was $0.75 versus $0.70 for the same period in 2024.
EBITDAre of $65.7 million versus $62.3 million for the same period in 2024.
Same-Store Net Operating Income ("NOI") grew 3.9% to $73.2 million versus $70.4 million for the same period in 2024.
Operating Results
For the three-month periods ending September 30, 2025 and 2024, the Company's operating highlights were as follows:
Third Quarter 2025
Third Quarter 2024
Occupancy:
Wholly Owned Properties, All
94.2%
94.1%
>10,000 Sq Ft Occupancy
98.0%
97.4%
≤ 10,000 Sq Ft Occupancy
92.0%
92.2%
Same Store Property Net Operating Income Change(1)
4.8%
4.6%
Rental Rate Growth - Total (GAAP Basis):
19.3%
25.3%
New Leases
22.5%
22.7%
Renewal Leases
18.6%
25.9%
Leasing Transactions:
Number of New Leases
21
26
New Leases - Lease Term Revenue (millions)
$15.7
$7.6
Number of Renewal Leases
47
46
Renewal Leases - Lease Term Revenue (millions)
$13.3
$15.3
1
Balance Sheet and Debt Metrics
As of September 30, 2025, Whitestone had total debt of $646.0 million, along with capacity and availability of $308.9 million and $223.6 million, respectively, under its $375 million revolving credit facility.
As of September 30, 2025, the Company has undepreciated real estate assets of $1.3 billion.
Dividend
On August 28, 2025, the Company declared a quarterly cash distribution of $0.135 per common share and OP unit for the fourth quarter of 2025, to be paid in three equal installments of $0.045 in October, November, and December of 2025.
2025 Full Year Guidance
The Company has updated its 2025 full-year guidance for net income attributable to Whitestone REIT, same store net operating income growth, and bad debt as a percentage of revenue. The guidance update is as follows:
Q3 2025 Revised Guidance
2025 Original Guidance
(unaudited, amounts in thousands except per share and percentages)
Net income attributable to Whitestone REIT(1)
$30,913 - $33,023
$17,135 - $19,219
Core FFO(1)
$54,158 - $56,268
$54,158 - $56,268
Net income attributable to Whitestone REIT per share(1)
$0.59 - $0.63
$0.33 - $0.37
Core FFO per diluted share and OP Unit(2)
$1.03 - $1.07
$1.03 - $1.07
Key Drivers:
Same store net operating income growth(3)
3.5% - 4.5%
3.0% - 4.5%
Bad debt as a percentage of revenue
0.60% - 0.90%
0.75% - 1.00%
General and administrative expense
$20,800 - $22,800
$20,800 - $22,800
Interest expense
$33,000 - $34,000
$32,000 - $33,000
Ending occupancy
94.0% - 95.0%
94.0% - 95.0%
(1)
The guidance does not include any potential gains or losses that may occur in the fourth quarter, including but not limited to, gains or losses from asset sales and collection of receivables from partnership redemption.
(2)
For the reconciliation of forward-looking non-GAAP financial measure to the comparable GAAP financial measure, see the "Core FFO per diluted share and OP unit" reconciliation table. Core Funds from Operations ("Core FFO") is a non-GAAP measure. Guidance does not include the operational or capital impact of any future unannounced acquisition or disposition activity or the collection of any amounts due us from our claims in the Pillarstone bankruptcy.
(3)
Excludes straight-line rent, amortization of above/below market rates and lease termination fees for both periods.
Portfolio Statistics
As of September 30, 2025, Whitestone wholly owned 55 Community-Centered Properties™ with 4.8 million square feet of gross leasable area ("GLA"). Five of the 55 Community-Centered Properties™ are land parcels held for future development. The portfolio is comprised of 31 properties in Texas and 24 in Arizona. Whitestone's Community-Centered PropertiesTM are located in the MSA's of Austin (7), Dallas-Fort Worth (10), Houston (11), Phoenix (24), and San Antonio (3). The Company's properties in these markets are generally in high-traffic locations, surrounded by high-household-income communities.
At the end of the third quarter, the Company's diversified tenant base was comprised of 1,458 tenants, with the largest tenant accounting for only 2.2% of annualized base rental revenues. Lease terms range from less than one year for smaller tenants to more than 15 years for larger tenants. Whitestone's leases generally include minimum monthly lease payments and tenant reimbursements for payment of taxes, insurance and maintenance, and typically exclude restrictive lease clauses.
Conference Call Information
In conjunction with the issuance of its financial results, the Company invites you to listen to its earnings release conference call to be broadcast live on Thursday, October 30, 2025, at 8:30 A.M Eastern Time / 7:30 A.M. Central Time. The call will be led by Dave Holeman, Chief Executive Officer. Conference call access information is as follows:
To listen to a webcast of the conference call, click on the Investor Relations tab of the Company's website, www.whitestonereit.com, and then click on the webcast link. A replay of the call will be available on Whitestone's website via the webcast link until the Company's next earnings release. Additional information about Whitestone can be found on the Company's website.
Dial-in number for domestic participants:
1-877-407-0784
Dial-in number for international participants:
1-201-689-8560
The conference call will be recorded, and a telephone replay will be available through Saturday, November 15, 2025. Replay access information is as follows:
Replay number for domestic participants:
1-844-512-2921
Replay number for international participants:
1-412-317-6671
Passcode (for all participants):
13747767
Supplemental Financial Information
The third quarter earnings release and supplemental data package will be located in the "News and Events" and "Financial Reporting" tabs of the Investor Relations section of the Company's website at www.whitestonereit.com. The earnings release and supplemental data package will also be available by mail upon request. To receive a copy, please call Investor Relations at (713) 435-2219.
About Whitestone REIT
Whitestone REIT (NYSE:WSR) is a community-centered real estate investment trust (REIT) that acquires, owns, operates, and develops open-air, retail centers located in some of the fastest growing markets in the country: Phoenix, Austin, Dallas-Fort Worth, Houston and San Antonio.
Our centers are convenience focused: merchandised with a mix of service-oriented tenants providing food (restaurants and grocers), self-care (health and fitness), services (financial and logistics), education and entertainment to the surrounding communities. The Company believes its strong community connections and deep tenant relationships are key to the success of its current centers and its acquisition strategy. For additional information, please visit www.whitestonereit.com.
Forward-Looking Statements
This Report contains forward-looking statements within the meaning of the federal securities laws, including discussion and analysis of our financial condition and results of operations, statements related to our expectations regarding the performance of our business, and other matters. These forward-looking statements are not historical facts but are the intent, belief or current expectations of our management based on its knowledge and understanding of our business and industry. Forward-looking statements are typically identified by the use of terms such as "may," "will," "should," "potential," "predicts," "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates" or the negative of such terms and variations of these words and similar expressions, although not all forward-looking statements include these words. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements.
Factors that could cause actual results to differ materially from any forward-looking statements made in this Report include: the imposition of federal income taxes if we fail to qualify as a real estate investment trust ("REIT") in any taxable year or forego an opportunity to ensure REIT status; uncertainties related to national, international, regional and local economic conditions, including impacts and uncertainty from trade disputes and tariffs on goods imported to the United States and goods exported to other countries; real estate risks, including fluctuations in real estate values and the general economic climate in local markets and competition for tenants in such markets; legislative or regulatory changes, including changes to laws governing REITs; adverse economic or real estate developments or conditions in Texas or Arizona, particularly in Austin, Houston, Dallas, San Antonio, Scottsdale and Phoenix in particular, including the potential impact of public health emergencies, on our tenants' ability to pay their rent, which could result in bad debt allowances or straight-line rent reserve adjustments; our current geographic concentration in the Austin, Houston, Dallas, San Antonio, Scottsdale and Phoenix metropolitan area markets makes us susceptible to potential local economic downturns; increases in interest rates, including as a result of inflation, which may increase our operating costs or general and administrative expenses; natural disasters, such as floods and hurricanes, which may increase as a result of climate change may adversely affect our returns and adversely impact our existing and prospective tenants; increasing focus by stakeholders on environmental, social, and governance matters; financial institution disruptions; availability and terms of capital and financing, both to fund our operations and to refinance our indebtedness as it matures; decreases in rental rates or increases in vacancy rates; harm to our reputation, ability to do business and results of operations as a result of improper conduct by our employees, agents or business partners; litigation risks; lease-up risks, including leasing risks arising from exclusivity and consent provisions in leases with significant tenants; our inability to renew tenant leases or obtain new tenant leases upon the expiration of existing leases; risks related to generative artificial intelligence tools and language models, along with the potential interpretations and conclusions they might make regarding our business and prospects, particularly concerning the spread of misinformation; our inability to generate sufficient cash flows due to market conditions, competition, uninsured losses, changes in tax or other applicable laws; geopolitical conflicts, such as the ongoing conflict between Russia and Ukraine, the conflict in the Gaza Strip and unrest in the Middle East; the need to fund tenant improvements or other capital expenditures out of our operating cash flow; the risk that we are unable to raise capital for working capital, acquisitions or other uses on attractive terms or at all; and the ultimate amount we will collect in connection with the redemption of our equity investment in Pillarstone Capital REIT Operating Partnership LP ("Pillarstone" or "Pillarstone OP."); 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 from time to time.
Non-GAAP Financial Measures
This release contains supplemental financial measures that are not calculated pursuant to U.S. generally accepted accounting principles ("GAAP") including EBITDAre, FFO, Core FFO, NOI and net debt. Following are explanations and reconciliations of these metrics to their most comparable GAAP metric.
EBITDAre: The National Association of Real Estate Investment Trusts ("NAREIT") defines EBITDAre as net income computed in accordance with GAAP, plus interest expense, income tax expense, depreciation and amortization and impairment write-downs of depreciable property and of investments in unconsolidated affiliates caused by a decrease in value of depreciable property in the affiliate, plus or minus losses and gains on the disposition of depreciable property, including losses/gains on change in control and adjustments to reflect the entity's share of EBITDAre of the unconsolidated affiliates and consolidated affiliates with non-controlling interests. We calculate EBITDAre in a manner consistent with the NAREIT definition. Management believes that EBITDAre represents a supplemental non-GAAP performance measure that provides investors with a relevant basis for comparing REITs. There can be no assurance the EBITDAre as presented by the Company is comparable to similarly titled measures of other REITs. EBITDAre should not be considered as an alternative to net income or other measurements under GAAP as indicators of operating performance or to cash flows from operating, investing or financing activities as measures of liquidity. EBITDAre does not reflect working capital changes, cash expenditures for capital improvements or principal payments on indebtedness.
FFO: Funds From Operations: NAREIT defines FFO as net income (loss) (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains or losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. We calculate FFO in a manner consistent with the NAREIT definition and also include adjustments for our unconsolidated real estate partnership.
Core Funds from Operations ("Core FFO") is a non-GAAP measure. From time to time, we report or provide guidance with respect to "Core FFO" which removes the impact of certain non-recurring and non-operating transactions or other items we do not consider to be representative of our core operating results including, without limitation, default interest on debt of real estate partnership, extinguishment of debt cost, gains or losses associated with litigation involving the Company that is not in the normal course of business, and proxy contest costs.
Management uses FFO and Core FFO as a supplemental measure to conduct and evaluate our business because there are certain limitations associated with using GAAP net income alone as the primary measure of our operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Because real estate values instead have historically risen or fallen with market conditions, management believes that the presentation of operating results for real estate companies that use historical cost accounting is insufficient by itself. In addition, securities analysts, investors and other interested parties use FFO as the primary metric for comparing the relative performance of equity REITs. FFO and Core FFO should not be considered as alternatives to net income or other measurements under GAAP, as an indicator of our operating performance or to cash flows from operating, investing or financing activities as a measure of liquidity. FFO and Core FFO do not reflect working capital changes, cash expenditures for capital improvements or principal payments on indebtedness. Although our calculation of FFO is consistent with that of NAREIT, there can be no assurance that FFO and Core FFO presented by us is comparable to similarly titled measures of other REITs.
NOI: Net Operating Income: Management believes that NOI is a useful measure of our property operating performance. We define 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, our NOI may not be comparable to other REITs. Because NOI excludes general and administrative expenses, depreciation and amortization, deficit in earnings of real estate partnership, interest expense, interest, dividend and other investment income, provision for income taxes, gain on sale of properties, loss on disposal of assets, and includes NOI of real estate partnership (pro rata) and net income attributable to noncontrolling interest, 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. We use NOI to evaluate our operating performance since NOI allows us to evaluate the impact that factors such as occupancy levels, lease structure, lease rates and tenant base have on our results, margins and returns. In addition, management believes that NOI provides useful information to the investment community about our 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 our overall financial performance since it does not reflect the level of capital expenditure and leasing costs necessary to maintain the operating performance of our properties, including general and administrative expenses, depreciation and amortization, equity or deficit in earnings of real estate partnership, interest expense, interest, dividend and other investment income, provision for income taxes, gain on sale of properties, and gain or loss on sale or disposition of assets.
Same Store NOI: Management believes that Same Store NOI is a useful measure of the Company's property operating performance because it includes only the properties that have been owned for the entire period being compared, and that it is frequently used by the investment community. Same Store NOI assists in eliminating differences in NOI due to the acquisition or disposition of properties during the period being presented, providing a more consistent measure of the Company's performance. The Company defines Same Store NOI as operating revenues (rental and other revenues, excluding straight-line rent adjustments, amortization of above/below market rents, and lease termination fees) less property and related expenses (property operation and maintenance and real estate taxes), Non-Same Store NOI, and NOI of our investment in Pillarstone OP (pro rata). We define "Non-Same Stores" as properties that have been acquired since the beginning of the period being compared and properties that have been sold, but not classified as discontinued operations. Other REITs may use different methodologies for calculating Same Store NOI, and accordingly, the Company's Same Store NOI may not be comparable to that of other REITs.
Net debt: We present net debt, which we define as total debt net of insurance financing less cash plus our proportional share of net debt of real estate partnership, and net debt to pro forma EBITDAre, which we define as net debt divided by EBITDAre because we believe they are helpful as supplemental measures in assessing our ability to service our financing obligations and in evaluating balance sheet leverage against that of other REITs. However, net debt and net debt to pro forma EBITDAre should not be viewed as a stand-alone measure of our overall liquidity and leverage. In addition, our REITs may use different methodologies for calculating net debt and net debt to pro forma EBITDAre, and accordingly our net debt and net debt to pro forma EBITDAre may not be comparable to that of other REITs.
Investor and Media Relations:David MordyDirector, Investor RelationsWhitestone REIT(713)
Whitestone REIT and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
September 30, 2025
December 31, 2024
ASSETS
Real estate assets, at cost
Property
$
1,295,374
$
1,248,223
Accumulated depreciation
(259,530
)
(246,534
)
Total real estate assets
1,035,844
1,001,689
Cash and cash equivalents
6,848
5,224
Restricted cash
—
10,146
Escrows and deposits
4,293
4,006
Accrued rents and accounts receivable, net of allowance for doubtful accounts(1)
34,090
33,820
Receivable from partnership redemption
31,643
31,643
Receivable due from related party
1,327
15,186
Unamortized lease commissions, legal fees and loan costs
17,282
14,693
Prepaid expenses and other assets(2)
4,678
7,805
Finance lease right-of-use assets
10,341
10,427
Total assets
$
1,146,346
$
1,134,639
LIABILITIES AND EQUITY
Liabilities:
Notes payable
$
641,626
$
631,518
Accounts payable and accrued expenses(3)
40,871
40,703
Payable due to related party
1,535
1,577
Tenants' security deposits
9,469
9,295
Dividends and distributions payable
6,974
6,931
Finance lease liabilities
751
781
Total liabilities
701,226
690,805
Commitments and contingencies:
—
—
Equity:
Preferred shares, $0.001 par value per share; 50,000,000 shares authorized; none issued and outstanding as of September 30, 2025 and December 31, 2024
—
—
Common shares, $0.001 par value per share; 400,000,000 shares authorized; 51,019,286 and 50,690,163 issued and outstanding as of September 30, 2025 and December 31, 2024, respectively
51
51
Additional paid-in capital
639,101
637,946
Accumulated deficit
(199,141
)
(205,557
)
Accumulated other comprehensive income (loss)
(520
)
5,713
Total Whitestone REIT shareholders' equity
439,491
438,153
Noncontrolling interest in subsidiary
5,629
5,681
Total equity
445,120
443,834
Total liabilities and equity
$
1,146,346
$
1,134,639
Whitestone REIT and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, 2025
December 31, 2024
(1) Accrued rents and accounts receivable, net of allowance for doubtful accounts
Tenant receivables
$
16,773
$
17,285
Accrued rents and other recoveries
29,804
29,964
Allowance for doubtful accounts
(13,601
)
(14,720
)
Other receivables
