Q3 2024 Whitestone REIT Earnings Call

Greetings and welcome to Whitestone, REIT third quarter 'twenty 'twenty four 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.

Speaker Change: Zero unintended phone keypad as a reminder, this conference is being recorded it does now my pleasure to introduce your host Mr. David Martin Director of Investor Relations. Thank you Mr. Martin you may begin.

David Martin: Good morning, and thank you for joining Whitestone REIT third quarter 2024 earnings Conference call. Joining me on today's call are Dave Holeman, 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.

David Martin: And maybe 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 is most recent Form 10-Q and 10-K for a detailed discussion of these factors.

David Martin: <unk>. The fact that this call may be webcast for a period of time. It's 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.

David Martin: Whitestone <unk> 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.

David Martin: 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.

David Martin: What sets us apart is growing demand and our ability to re merchandise our centers to match the evolving neighbourhood needs.

David Martin: 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 and utilizing technology disciplined underwriting and tenant selection.

David Martin: I mentioned earlier that we define growth as core <unk> per share growth.

David Martin: Combined with a strengthening balance sheet. This measure most directly reflects what we as management control.

David Martin: We hold our teams accountable for <unk> <unk> per share growth and the metrics that drive it forward we.

David Martin: We do not deliver niv or share price quarter. After quarter. However, we firmly believe that consistent core <unk> per share growth will reward our shareholders over the long run.

David Martin: In grains.

David Martin: Better positioned perfectly.

Speaker Change: They offered a high end hard to get Bourbons, and liquors and because of their strong following a social they had customers lined up overnight for the grand opening pulling from a much larger distance and just the normal trade grievous for the center.

Speaker Change: So what sets us apart here is not just our ability to capitalize on the attractiveness of an HEB anchored center.

Speaker Change: Also increase the ABR by over 50% of our ability to increase the traffic can reach the center and help ensure longer term success for both whitestone and the tenant we.

Speaker Change: We had a similar success recently, bringing in an Asian grocery sun weighing into our Lion Square Center in Houston, not only does this allow us to transform the center into a grocery anchored center.

Speaker Change: One wings customer following within the Asian community has greatly extended the reach of the center often pulling customers from a greater five mile plus radios.

Speaker Change: Securing sun wing is part of a larger re merchandising and redevelopment plan for Lion square, we have seen the community evolved with the demand increasing as incomes have risen and younger families are moving in.

Speaker Change: A major mixed use development project is occurring adjacent to the center and we'll be able to maintain our cash flow as we redevelop the center to match the evolving demographic and take advantage of higher traffic.

Speaker Change: In terms of the overall strength of demand, we're seeing no signs of slack fitness health beauty and wellness all continued to see an uptick, especially with the younger demographics.

Speaker Change: U S fitness opened debtor Williams trace Plaza.

Speaker Change: During the quarter I think we've got a couple of positive steps in that we have.

Speaker Change: Now have a <unk>.

Speaker Change: <unk> liquidation that.

Speaker Change: That we've we've agreed upon we have a third party plant agent that's overseeing that so I think we're making steps.

Speaker Change: And with that obviously, we feel continue to feel better about collecting and the timing I think as far as the timing I do think I'll, let Scott comment on the guidance.

Scott Hogan: Yes, sure Mitch Thanks for the question well, we've kept our core <unk> range wide at this point in the year, just because of some of the uncertainty around the monetization of pillar stone.

Scott Hogan: You've seen the same store.

Scott Hogan: Numbers increase a little bit, but we did have a small amount forecasted in the fourth quarter.

Scott Hogan: For liquidation proceeds on pillar stone and it's just it's just too hard to say, whether we will see that this year or next year.

Scott Hogan: Given that it's not a bankruptcy process.

Speaker Change: Excellent. Thank you Mike.

Mitch: Thanks Mitch.

Thank you next question comes from the line of Gaurav Mehta.

Speaker Change: <unk> Global partners. Please go ahead.

Gaurav Mehta: Yes, thanks, good morning.

Gaurav Mehta: I wanted to ask you on your asset.

Speaker Change: Right now our momentum is very strong.

Speaker Change: And so we're evaluating all sources and we'll continue to do so.

Speaker Change: Okay I appreciate the color. Thank you very much John.

Speaker Change: Thank you next question comes from the line of Craig Crusado with Lucid capital markets. Please go ahead.

Speaker Change: Yes, good morning, guys.

Craig Crusado: Obviously, another solid leasing quarter, you mentioned, the continued strength of fitness and health and beauty as a few examples but I'd be curious sort of are those the tenant categories that you are more focused on during the quarter in the back half of the year or what are the categories that really kind of fit more for whitestone shopping centers are today.

Speaker Change: Again, we've always focused on food rather of restaurants, and as we just mentioned and we added another grocery anchor to one of our centers.

Speaker Change: And health beauty wellness has been just a really hot category over the last couple of years and continues to grow but along with that there is also continued other services too that we're finding that are unique to our environment.

Speaker Change: And I would say that.

Speaker Change: We've stayed focused on these categories that have been essential in.

Speaker Change: Compatible with the Internet and it's worked well and that's why we've been able to deliver the last couple of years and continue to do so.

Speaker Change: Okay.

Speaker Change: Okay great.

Speaker Change: Changing gears.