Whitestone REIT (WSR) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw strong performance with 6.6% Same Store NOI growth, 17.5% blended leasing spreads, and a 5.4% increase in annualized base rent per square foot year-over-year.

• Core FFO per share was $0.24 for the quarter, with 2024 guidance reiterated at $0.98–$1.04 per share, targeting 11% year-over-year growth at the midpoint.

• Portfolio consists of 57 wholly owned properties (5.1M sq ft GLA) in Texas and Arizona, with 93.5% occupancy and a diversified tenant base; largest tenant is 2.1% of annualized rent.

• Completed 147 new and renewal leases in H1 2024, totaling 503,417 sq. ft. and $55.3 million in lease value.

• Continued focus on re-merchandising, tenant quality, and asset recycling in high-income, high-growth Sunbelt markets.

Financial highlights

• Q2 2024 revenue was $37.6 million, up 3.3% year-over-year; H1 2024 revenue was $74.8 million, up 3%.

• Core FFO per share rose to $0.24 from $0.21 year-over-year; Core FFO was $12.6M, up from $10.6M.

• Same Store NOI grew to $24.1M, up from $22.6M; net effective annual base rent per leased square foot rose 5.4% to $24.00.

• Net income attributable to common shareholders was $2.6M ($0.05 per diluted share), down from $11.3M ($0.22 per diluted share) in Q2 2023, reflecting lower gains on property sales.

• Leasing spreads totaled 17.5%, with new leases at 33.3% and renewals at 13.9%.

Outlook and guidance

• 2024 Core FFO per share guidance reiterated at $0.98–$1.04; net income per share guidance is $0.32–$0.38.

• Full-year Same Store NOI growth guidance raised to 3%–4.5%.

• Occupancy expected to remain strong, targeting 93.8%–94.8% by year-end.

• Guidance includes $1.76M in proxy contest costs and a $6.53M gain on property sale.

• Board will regularly reassess dividend level in light of economic conditions.