Whitestone REIT

Greetings and welcome to Whitestone Reef Third Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. David Maudie, Director of Investor Relations. Thank you, Mr. Modi. You may begin.

Good morning, and thank you for joining Whitestone REIT's third quarter 2024 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, October 31, 2024. The company undertakes no obligation to update this information. Whitestone's third 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 third 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 third quarter 2024 earnings conference call. We've had tremendous success over the past three years, improving every facet of Whitestone. From implementing governance best practices to the commitment and quality of our employees, the daily steps we've taken add up to a fundamentally different company versus Whitestone of the past. From time to time, we hear a comment that we are stuck or challenged to grow. Let me be clear, we are neither. We've led the peer group in total shareholder return over the last three years, and we've implemented stronger shareholder engagement practices to gain a better understanding of shareholders' perspectives and better incorporate that into our decision making. And most importantly, core FFO per share our key growth metric is robust, and we are aligned to continue core FFO per share growth in 2025 and beyond. Today, we reiterate our target of 11% core FFO per share growth for 2024. Not only is this growth something we're proud of, we believe it is directly connected to our operational improvements and the discipline with which we have pursued and will continue to pursue our strategy. Whitestone's momentum continued at a strong pace this quarter. We delivered our 10th consecutive quarter with leasing spreads above 17%. To be specific, combined total straight line leasing spreads were 25.3% for the quarter. We are increasing our same-store net operating income target range for the second quarter in a row, raising the midpoint another 50 basis points this quarter after delivering same-store NOI growth of 4.6% in the third quarter. The leasing team improved our occupancy up to 94.1% as we move into what has typically been a very strong quarter, the fourth quarter. We improved our debt to EBITDA RE metric to 7.2 times and are on track to achieve our year-end 6.6 to 7 times for our Q4 annualized target. We are confident we will be able to continue improving leverage in 2025 via earnings growth, free cash flow, and collecting on our Pillarstone settlement, but we'll leave that projection to our next earnings call. Last quarter, our Green Street trade area power score increased again. Green Street has updated their scoring and once again scored our portfolio within the top quartile in terms of the quality of the portfolio versus the peers, and we completely agree with their conclusions on the strength of our portfolio. But I'll emphasize that it just isn't the high disposable incomes surrounding our centers or the strong traffic patterns ordering our centers to drive our success. What sets us apart is growing demand and our ability to re-merchandise our centers to match the evolving neighborhood needs. This is made possible by active management, by having the right structure in place, including our use of shorter leases, by having operational expertise, including a leasing team well versed in utilizing technology, disciplined underwriting, and tenant selection. I mentioned earlier that we define growth as core FFO per share growth. Combined with a strengthening balance sheet, this measure most directly reflects what we as management control. We hold our teams accountable for FFO per share growth and the metrics that drive it forward. We do not deliver NAV or share price quarter after quarter, however, We firmly believe that consistent core FFO per share growth will reward our shareholders over the long run. As we have previously communicated, we have planned to announce and onboard two new trustees prior to year end. Our board level nominating and governance committee, in combination with leading executive search firm Spencer Stewart, and utilizing valuable shareholder input is conducting an exhaustive search to identify board member candidates that will further strengthen our board, complementing the skills of existing trustees, holding management accountable, and maximizing shareholder value. Keep an eye out for an announcement in the near future. We are eager to connect with investors at REIT World in a couple weeks. And we look forward to sharing more about Whitestone and gaining valuable investor feedback. And with that, I'll turn the call over to Christine.