Whitestone REIT

Greetings. Welcome to Whitestone REIT's second 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 today should require operator assistance during the conference, please press star zero on your telephone keypad. Please note that this conference is being recorded. At this time, I'll turn the conference over to David Morty, Director of Investor Relations. Mr. Morty, you may now begin.

Good morning and thank you for joining Whitestone REIT's second quarter 2022 earnings conference call. Joining me today 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, August 3, 2022. The company undertakes no obligation to update this information. Whitestone's second 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'd also like to draw investor attention to the fact that we published second quarter 2022 slides on our website yesterday afternoon and will reference page numbers throughout this call. 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 second quarter 2022 earnings conference call. I will begin on slide number two. We're pleased to announce another strong quarter of operating and financial results driven by continued demand for spaces in our centers and associated leasing activity. Versus the second quarter of 2021, our revenue grew over 14%, FFO per share is 25 cents per share, up from 24 cents. Same store net operating income increased 8%. Total occupancy is 91.5%, up 150 basis points from Q2 2021, and up 50 basis points from the first quarter. As of the end of the second quarter, our net effective annual base rent per square foot was $21.72, up nearly 9% from a year ago and up over 2% from the first quarter. And our balance sheet continues to strengthen with lower debt leverage as shown by the improvement of our net debt to EBITDA RE ratio to 8.3 times. Total second quarter 2022 leasing spreads were very strong, and I'll have Christine discuss leasing further in her section. Our strategy of designing necessity-based community centers located in high growth, high household income, Sunbelt markets continues to produce strong and improving results. Given another quarter of successful results, I wanted to discuss some of the positive steps we've taken over the last six months. I've shared some of the big focus points over the last several conference calls. We have enhanced our governance, increased our investor outreach and interaction, strengthened our leadership team while reducing overhead expenses, grown FFO per share 25 percent, and meaningfully improved our debt leverage. Our dedicated team of associates share a common purpose to meet the needs of our communities, position our tenants to reach their success, and to create value in commercial real estate better than anyone in our industry. We value hard work, teamwork, integrity, and growth, and I am honored to lead a team dedicated to executing on our business model and delivering long-term shareholder value. Our strategy is clear and consistent. Whitestone has had the right strategy in place for over a decade, and we believe the environment has never been stronger to showcase that strategy. First, in terms of strategic consistency, our focus has been on well-located, necessity-based retail centers located in high household income neighborhoods, in the best submarkets, in the fastest-growing MSAs. and today our portfolio is located 99% in the top markets in the Sun Belt. The importance of geographic focus is something the industry has recently and rightfully placed tremendous value on. Beyond our geographic focus, and even more important, is our strategy of crafting service-oriented centers designed around meeting local needs. This strategy has always been embraced throughout the company, including our acquisitions team where we have utilized local sharpshooters to find centers in high-income neighborhoods capable of morphing into one of our growth centers. This strategy is relentlessly pursued by our in-house leasing agents who are ingrained in the surrounding communities and know how to attract tenants that meet the demands of their communities. This strategy is embedded in the way we write our contracts, opting for shorter leases because of our strong belief in the tenants we choose for our centers, validated by the successful track record of growth of our tenant base. This strategy is understood by our tenants as they grow, strengthening a center's connection with the surrounding neighborhood and benefiting from increased traffic levels. And finally, this strategy is also embraced by our development and redevelopment team eager to find opportunities to build value through improvements to our current properties and through adding additional leasable area. I'll have Christine expand on some of the detail behind our strategy, specifically on leasing and by walking through a property development cycle, but I have a couple new additions to the team I wanted to mention first. Tim Ng recently joined the team as our Vice President of Acquisitions and brings over 20 years of real estate experience, most recently in similar roles with Fifth Corner and Amrete. Tim has great relationships in our markets, knows our product type very well, and we're excited to have him on board. For the balance of 2022, he will be focused on our disposition efforts and sourcing great new acquisitions for the Whitestone portfolio. I also want to welcome our newest board member, Amy Fang, to Whitestone. As part of our continued focus on governance, we are strengthening our board through the addition of Amy and increasing the number of independent trustees on our board. Amy is currently the Director of Investor Relations for Shopify, a leading provider of essential internet infrastructure for many of the same businesses we work with. Amy brings significant depth and experience in providing strategic counsel to hundreds of companies in her time at several leading strategic financial communications firms. She has tremendous capital markets knowledge, having spent her time as an analyst on the sell side, and we're thrilled to have her join our board. And with that, I'll turn things over to Christine.