Whitestone REIT

Greetings. Welcome to the Whitestone REIT first quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, David Morty, Director of Investor Relations. You may begin.

Good morning, and thank you for joining Whitestone REIT's first quarter 2022 earnings conference call. Joining me on today's call are Dave Holman, Chief Executive Officer, Christine Mastandrea, Chief Operating Officer, and Scott Hogan, Chief Financial Officer. Please note that some statements made during this call are not historical and may be deemed forward-looking statements. Actual results may differ materially from those forward-looking statements due to a number of risks, uncertainties, and other factors. Please refer to the company's earnings news release and filings with the SEC, including Whitestone's most recent Form 10-Q and 10-K, for a detailed discussion of these factors. Acknowledging the fact that this call may be webcast for a period of time, it is also important to note that this call includes time-sensitive information that may be accurate only as of today's date, May 4, 2022. The company undertakes no obligation to update the information. Whitestone's first quarter earnings news release and supplemental operating and financial data package have been filed with the SEC and are available on our website, www.whitestonereit.com, in the investor relations section. I will now turn the call over to Dave Holman, our chief executive officer.

Thank you, David. Good morning, and thank you for joining Whitestone's first quarter 2022 earnings conference call. We are pleased to announce strong operating and financial results for the first quarter of the year, highlighted by same-store NOI growth of 12.9%, significant reductions in our G&A expenses, and ongoing balance sheet strengthening. Our necessity-based community centers, located in high-growth Sunbelt markets, continue to drive increasing consumer traffic and tenant demand as evidenced by increases in rent per square foot and occupancy levels. Our focus remains on maximizing shareholder value through organic growth, prudent capital allocation, reducing G&A expenses, improving our debt leverage, and delivering on our 2022 targeted FFO per share growth. Today, I would like to provide an update on the five key areas of focus that I shared on my initial call as CEO. These key focus areas are critical components of our strategy to unlock and grow shareholder value. First, our commitment to reducing G&A costs. In our fourth quarter call, we communicated our commitment to reduce 2022 G&A costs by $3 to $3.5 million from the 2021 level. In the first quarter, we have taken several decisive steps toward this goal, largely through resetting of executive compensation levels. Our first quarter G&A expense is approximately $2.6 million lower than the first quarter of 2021, so we are well on our way to meet this commitment. Secondly, our commitment to alignment with corporate governance best practices. In the first quarter, we have made progress in this area through the separation of the roles of the chairman of the board and CEO, through cancellation of our shareholder rights plan or poison pill, through amendment to the company's bylaws, allowing shareholders the right to amend bylaws. This change is subject to shareholder ratification of an amendment to the company's declaration of trust at our upcoming 2022 annual meeting of shareholders. an amendment to the charter of the Nominating and Governance Committee providing board-level oversight of our ESG efforts. We appreciate the feedback we have received and will continue to communicate with investor governance teams in the future. Third, our commitment to minimize share dilution and maximize value. We are laser-focused on increasing FFO per share from organic initiatives. In the first quarter, our FFO increased to 30 cents per share, up from 20 cents per share in Q1 2021. We continue to work to drive occupancy with a goal of 92 to 93% by year end. To that point in the first quarter, occupancy stayed steady with year end 2021 at 91%, which is up 230 basis points from the first quarter of the prior year. In combination with the occupancy increase, we will work to drive value by recycling our capital and continuing to merchandise our centers to meet the neighborhood needs. Fourth, our geographic focus remains on the nation's highest growth markets in the Sun Belt, and we believe our mix of entrepreneurial tenants further optimizes our growth potential. I have visited approximately half of our centers over the past month to ensure that our centers are in line with our community-centered strategy and that we are leveraging the high demand we are seeing in our markets. Our strategy is straightforward, and we continue to enhance our approach and execute on that strategy to drive up revenue and occupancy. And fifth, we will remain committed to disciplined growth. We will not grow for growth's sake, but our growth will be guided by disciplined capital stewardship. We continue to evaluate our properties to determine if we should monetize specific properties and redeploy the proceeds into acquisitions, development, or balance sheet improvement. Our key criteria for monetization are properties that are less aligned with our core strategy, have lower growth potential, and or we anticipate will strengthen our balance sheet metrics upon sale. From a team perspective, we have continued to strengthen our leadership with our recent promotions. And to that point, we are thrilled with the advancement and development of individuals that have been key to our success. We continue to build upon last year's record leasing activity and strong base rent growth. The primary takeaways from our strong first quarter results are that we are solidly tracking toward achieving our 2022 guidance. We expect to drive best-in-class FFO per share growth this year as we hold close to our core strategy. With that, I will now turn the call over to Christine.