Whitestone REIT

during the conference, please press star and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, David Mordy, Director of Investor Relations. Please go ahead.

Good morning and thank you for joining Whitestone Reads second quarter 2024 earnings conference call. Joining me on today's call are Dave Holman, Chief Executive Officer, Christine Massandrea, 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 1, 2024. 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 in the investor relations section. We published second quarter 2024 slides on our website yesterday afternoon, which highlight topics to be discussed today. 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 2024 earnings conference call. We had another very strong quarter, extending out to nine quarters, we have now had 17% plus leasing spreads. Beyond the very strong supply and demand fundamentals underpinning our business, our strategy and our focus on operations are driving strong same store net operating income growth, which is the key to our long term earnings growth. We reiterated our 2024 core FFO guidance of 98 cents to $1.04 this morning and delivered 24 cents core FFO per share for the quarter. We remain on track with our internal forecast for the year. In the second quarter, we signed new and renewal leases at a blended 17.5% increase over the prior leases on a straight line basis and a 7.7% increase on a cash basis. We grew our top line revenue over 3.3%, producing 6.6% growth in same store NOI and achieving core FFO per share of 24 cents, and we continued to strengthen our balance sheet with debt to EBITDA RE at eight times, Excluding the proxy contest fees in the quarter, our debt to EBITDA RE ratio was 7.5 times, an improvement of 0.8 times from a year ago. Our occupancy was 93.5% at the end of the quarter, up 20 basis points from a year ago, and our net effective annual base rent per square foot was $24, up 5.4% from 2023. We recently took a harder look at some of our key differentiators in terms of our ability to drive growth, and I wanted to share some of those with you this morning. These key differentiators are captured on slide three. Strategically, these key differentiators allow us to focus our acquisition efforts where we can drive results quickly once we take possession of a property. We assess demand growth drivers in the neighborhood anchoring the property and determine if our team will be able to improve the alignment of tenants with the surrounding demand. Our leasing team's strength is placing high growth tenants in centers with 1,500 to 3,000 square foot spaces. We have long believed that neighborhood and community centers correctly configured with the right mix of 1,500 to 3,000 square foot spaces will outperform larger box centers. This belief is being proven by both national data and by Whitestone's numbers, as you can see on our slide number four. According to a recent Marcus and Millichap report, neighborhood and community centers grew year over year asking rents at 4.6% versus 0.1% for power centers. It is no surprise that our higher mix of neighborhood and community centers have allowed us to outperform the peer groups, same store net operating income growth, averaging 65 basis points over the last years of outperformance versus the group. Turning to slide five, you'll see this outperformance is even more impressive given the amount of capital we're required to drive these results. Because we acquire correctly configured centers, our redevelopment capital is generally not spent on reconfiguring a center, but rather on areas that drive income. Another key differentiator in terms of driving results is our tenant base. We have over 1,400 tenants that are selected by a leasing team trained to find tenants capable of growing, driving traffic, and allowing us to push our same-store net operating income higher. Once again, you need a long-term operational mindset plus a really strong leasing team in order to build up that tenant base as a key differentiator. It is because of these differentiators that we believe we should trade at a more attractive cap rate than most of our peers in the retail sector. We are pleased with the progress we have made in terms of market valuation, and we believe there is more runway ahead for us as we continue to drive results via these key differentiators. The differentiators became more and more apparent as we consistently drive results, and our success is built on a solid strategy and the ability of our leasing, property management, and acquisition teams to execute. On the governance front, we continue to make improvements as we recently announced our intent to strengthen and refresh our board of trustees by adding two new experienced and independent board members who will replace David Taylor and Nandita Barry upon appointment to our board. We will share more with investors as we move through this process, and I'm very thankful to David and Nandita for their efforts in leading the company's leadership changes in early 2022, for their ongoing commitment to do the right thing for shareholders, and for their strong support of our board refreshment initiative. They've served investors well for the last seven years, and we are a much better company as a result of their efforts. I'd also like to thank Amy Fang for stepping up as our new independent chair and for Julia Boothman assuming the chair of our nominating and governance committee and leading our board member search efforts. Both Amy and Julia have a strong commitment to grow shareholder value and bring a wealth of valuable experience to our team. We look forward to attending the Bank of America conference in September. And for those of you attending the conference, we hope you'll find time to meet with Whitestone there. And with that, I'll turn the call over to Christine.