Whitestone REIT

Greetings and welcome to the Whitestone REIT third quarter 2025 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, Mr. David Morty. Please go ahead.

Good morning, and thank you for joining Whitestone REIT's third quarter 2025 earnings conference call. Joining me on today's call are Dave Holman, Chief Executive Officer, Christine Mastandrea, President and 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 10Q and 10K, 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 30th, 2025. The company undertakes no obligation to update this information. Whitestone's earnings news release and supplemental operating and financial data package have been filed with the FCC and are available on our website in the investor relations section. We published third quarter 2025 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.

Thanks, David. Good morning, and thanks again for joining our call. We've got a number of great things to discuss this quarter, so I'll start in with some highlights for the quarter. and our overall achievements. We hit 94.2% occupancy this quarter, up 30 basis points from Q2. This is near record occupancy, and given that the fourth quarter is typically our strongest leasing quarter, we're set up for a very strong finish to the year. We delivered 4.8% same-store net operating income growth for the quarter, again fueled by increases across the spectrum of shop space leases, various tenant types in both Texas and Arizona. The quality of our portfolio continues to be recognized by third parties as Green Street has now increased our TAP score by five points since Green Street started scoring our portfolio two and a half years ago. In that time, the five-point increase leads the peer group and is a testament to the strength of our acquisitions, our operations, and our recycling efforts, as well as the demographic trajectory of the area surrounding our properties. We extended and improved the terms of our credit facility, locking down one of the key variables for us to achieve our long-term 5% to 7% core FFO per share growth target. Scott will provide greater detail on our debt metrics in his remarks. We're near completion on redevelopment for La Mirada in Scottsdale. We're in full swing on our work at Lion Square in Houston. and we've kicked off redevelopment at Terra Vida in Scottsdale. We've forecasted that redevelopment will add up to 1% to Whitestone's same store NOI growth with a 20 to 30 million capital spend over the next couple years, and we're on track to have this initiative deliver in 2026. And our average base rent is now $25.59, an 8.2% increase over the third quarter last year, and a 26% increase versus this quarter four years ago, translating to a 5.9 compound annual growth rate. Specific to this quarter, we delivered 26 cents in core FFO per share. As a reminder, we typically have a lift of a couple cents in the fourth quarter versus the third quarter as a result of new lease commencements and percent of sales clauses that trigger as we close out the year. Straight line leasing spreads were 19.3% for the quarter, our 14th consecutive quarter above 17% on leasing spreads. So those are the recent highlights. Let me go on now to talk a little about what we have planned ahead. Our path forward is clear. Deliver on consistent earnings growth. Deliver on the targets we've put in front of our investors. And if you have any doubts about our ability to deliver these results, and don't see the value of our differentiated business model, come talk to us. Dig into our great results and come see our properties. We know many investors have asked themselves, why not Whitestone? How is this small cap delivering growth that's larger than many of our peers? Don't accept a quick, inaccurate answer. We'll help you understand the building blocks underpinning our 5% to 7% core FFO growth target, and we'll help you understand why our cash flows are very durable. Because our success is rooted in operations, we believe investors gain a tremendous amount by seeing our operations. We'll be at REIT World in Dallas this December. We'll be showing investors properties on Monday, December 8th, and we'll have one-on-ones on Tuesday. We hope you'll be able to join us at this conference. As part of our ongoing asset recycling efforts, we disposed of one property this quarter, Sugar Park Plaza in Houston. Over the last three years, we've increased the NOI in this property by 22% by transforming the center into a grocery anchored center and re-merchandising the shop space, and the time was right to sell and deploy the proceeds where we can create greater value over the coming years. This disposition brings our total acquisitions and dispositions over the past three years to approximately $150 million. I anticipate we'll have a couple more acquisitions very shortly, and should have one to two dispositions to finish out the year. Our markets are continuing to show significant strength as Texas and Arizona's business-friendly environments and strong demographic trends continue to support demand. Our acquisition team continues to identify neighborhoods with upwardly mobile consumers where our leasing team can have the greatest impact applying our business model. And in closing, we remain steadfast in our belief that a company with a well-aligned, forward-thinking team, a well-located portfolio with a concentration of high-value shop space properly anchored to the community can outperform the herd. I look forward to connecting with investors in the months ahead, and I look forward to being able to lay out our 2026 plan on the fourth quarter call. Christine?