Q2 2025 Whitestone REIT Earnings Call
Greetings and welcome to the Whitestone REIT Q2 2025 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. Should anyone 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 David mordy director of investor relations. Thank you. You may begin.
Good morning and thank you for joining Whitestone Reed's. Second 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 4. We're 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 the 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. July 31st, 2025 the company undertakes. No obligation to update this information.
Website, and the investor relations section.
We published second 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 delivered another solid quarter. Increasing core ffo per share by 5.4% year-over-year. Growing our occupancy 100 basis points sequentially from q1 and increasing, our average base rent per lease square foot year-over-year by 5.3% to 25.28
We continue to see a very strong leasing environment in our high growth Sun Belt markets, which is allowing us to grow the value of our centers by strengthening the tenant mix with the addition of new and exciting businesses that serve the surrounding communities.
White stones strategically designed shorter, lease terms are allowing us to capture the benefits of this strong environment. Faster than many peers with less lease roll.
Over the next few years, we expect to leverage our leadership position in the high-value shop space to deliver core FFO growth of 5% to 7%, underpinned by same-store NOI growth of 3% to 5%. We intend to grow our dividend in conjunction with our FFO growth.
And scale, our operations, spreading our fixed costs, and broadening our investor base.
Let me highlight and provide a few details on 3 of our second quarter accomplishments.
First we grew occupancy 100 basis, points sequentially from q1 to 93.9% as we re merchandise bringing in stronger, tenants and setting up same store in a w growth in the quarters ahead.
At our Terra Center in North Scottsdale during the quarter, we added a very strong franchised Ace Hardware and expect to add the best-in-class pickle ball operator. The Pickler later this year,
these types of high-quality tenants enhance the vibrancy of the center and allow us to populate the center with fast growing businesses that allow us to benefit from their growth through higher rents and expansion potential.
Over the last couple years, we have frequently, highlighted, our REM merchandising REM merchandising efforts, and these efforts are coming to fruition and are providing a catalyst for future growth.
Secondly, we had 2 strategic Acquisitions in the quarter San Clemente and Austin and South culin in Fort Worth.
San Clemente has a very limited competitive retail around. It is anchored by a neighborhood with average incomes in excess of 280,000 and has over 55,000 vehicles per day, passing at the intersection of loop 360 and Westlake Drive.
Across the street from our existing Davenport Center. We anticipate strong growth ahead for both San Clemente and Davenport.
Our South Hulan acquisition expands our Geographic reach further in Fort Worth the center. Sits at the entrance to Hulen Mall already. The highest visited Mall within 30 miles and is poised to do even better as the fast growing surrounding neighborhood, drives additional commercial development in the area.
Both San Clemente and South Hulan fit very well within our overall strategy and match our acquisition criteria. Well,
Our third growth driver is Redevelopment. Our Redevelopment continues at PACE with Lion Square in Houston. We anticipate it will be complete by the end of the third quarter. This is an example where we've really been able to take advantage of a neighborhood's rapid Evolution, upgrading our product and ensuring we maximize growth. Not only is the surrounding Asian Community experiencing, very strong growth Park. 8 place a 1 billion dollar, Redevelopment is a o occurring. Down the road on the former Halliburton campus
This type of development is occurring all around our centers and I'll have Christine go into more detail there.
We are on track for our previously, communicated 2025 full year guidance. And our reaffirming our core ffo per share.
Same store NOI growth and year-end occupancy guidance. Ranges this morning.
In terms of financial performance, we delivered core ffo per share of 26 Cents for the quarter and 51 cents for the 6 months.
Versus the prior year periods.
Same store in oi growth of 2.5% for the quarter and 3.9% for the 6 months. We remain squarely On Target to hit our 3, to 4 and a half percent. Same store in a wide growth, target range for the year.
Straight line leasing spreads of 17.9%, our 13th consecutive quarter with leasing spreads in excess of 17%.
Early on in my time, as CEO. I I also spelled out that our plan would be to review every property within white sons portfolio to ensure that the properties are in line with our strategy and are supported by the right neighborhood Dynamics to drive growth and allowing our, our leasing agents to do what they do best.
We've done exactly what we said we would do. And I'll point you to a summary of our transactions on slide 10. Our review has resulted in our selling 12 properties, and purchasing 6 properties, in addition to some pads and other Parcels we bought adjacent to our existing properties.
The net effect of all of this has been to strengthen our ability to grow and secure higher ended properties, that have greater growth potential and durability of cash flows.
Since the fourth quarter of 2022, our Acquisitions have totaled 153 million and our dispositions have totaled approximately 126 million.
We anticipate the capital recycling program will continue with an estimated 40 million of Acquisitions and 40 million of dispositions through the balance of the year.
In conclusion of my prepared marks. I'll reiterate our belief that in today's rapidly changing retail environment, a company with a well-aligned forward-thinking team and a well-located portfolio with a higher concentration of high-value shop, space properly, anchored to the community can outperform the herd. We're not only putting all of the pieces in place to make that happen via Topline growth. We're actively managing our expenses as well. Reducing our GNA and interest expense both by about 6% from last year.
All in all, we're executing on our REM merchandising Capital recycling, reducing our expenses, improving our balance sheet, while growing earnings and and our steadfast commitment to grow long-term value for shareholders. I look forward to continue to update investors in the months ahead and I'll now turn it over to Christine.
Good morning, everyone. As Dave said, we delivered another strong quarter, bringing the occupancy number back up with Ace Hardware commencing at Terra Vita, and with strong momentum in the shop space. Leases.
We signed 303.2 million of total lease value picking up slightly from the first quarter and building towards the fourth quarter, which is typically our strongest quarter.
Leasing spreads were 41.4%, for new leases, and 152.2% for renewals giving us a combined leasing spreads of 17.9% for the quarter.
Same store. Noi growth was 3.9% for 6 months and we remain confident in hitting our 2025 guidance of 3 to 4.5% same store. Noi growth.
Looking out a bit further.
2, significant new tenants EO at Windsor Park in San Antonio and Cactus Club Cafe at Boulevard place in Houston. Our energizing the respective centres and we'll move out of their build free rent. Period soon and contribute over 150 basis points to the same store, noi in 2026.
Our most recent acquisition, South heughan, joins, a growing list of Whitestone properties that have made major development going on around them.
We've had the opportunity to acquire very stable cash flows and future upside as a result of urban development. So, we took action and made the acquisition.
Urban Development is both a factor within our acquisition criteria framework and the natural progression that occurs because of our other criteria, strong University Systems, High household incomes and upwardly mobile surrounding demographics.
We spoke on the last 2 earnings calls about how whitetown is designed to proactively identify change to take advantage of that change to delivering earnings as the company leverages change.
Today, I would like to highlight some of the major changes going on around our portfolio that will provide the opportunity in years ahead.
Expanding further on South humans: Development in Fort Worth grew through 3.1% last year and has become the nation’s 11th largest city.
Further elevating the traffic to the area which is already robust with I20 and human Street attracting more than 180,000 vehicles per day. Our South Hulen Center is perfectly positioned as a Gateway for the mall, and for upcoming development.
In terms of upcoming development Garden Oaks purchased in 2024 is very similar. We anticipate a major announcement soon, concerning the neighboring old series property.
The property will be redeveloped in conjunction with a neighborhood that is experiencing very rapid growth as Houston, Heights, redevelopments, press northward.
In other parts of the Houston. Metro we've got pockets of development and as well near our Lake Woodland Center, the Cynthia Mitchell Woods Pavilion has taken over as the top spot globally for outdoor amphitheaters with over. 600,000 guests in attendance in 2024 alone.
In response to the area's growth Howard. Hughes is building a Ritz Carlton Residences. A short walk from Lake Woodland Center and projected to be completed by the beginning of 2027.
We've anticipated this development. We purchased the property in late 2022 and we're already benefiting from our ongoing re merchandising efforts.
Near our Boulevard Center Post Oak, Central is being revitalized transforming his 16. Acre campus into a mixed juice environment of retail restaurant and office spaces.
Midway is the lead developer on the project and groundbreaking recently occurred in completion. Is expected late next year,
In addition the adjacent parcel to, uh, our Boulevard Center was recently, purchased by Crescent real estate. The dog at families and also the Schnitzer families.
They are developing the 6 acre parcel to create a mixed use development with 1.5 million square feet of additional space.
We anticipate that this project is moving very quickly and we welcome them as a neighbor.
Given that our Boulevard property is very strong interests right now and it sits at the main artery in the Uptown area of San Felipe 610 in Post Oak Boulevard.
We have the opportunity, not only to protect our asset but further upgrade our tenant base and move whitest Stones, developable land at the property and to an income producing column.
1. Last Houston highlight that David touched upon was Park. 8 place is a 1 billion dollar mixed-use development occurring less than a mile from line Square. In the former hella Burton campus with over 70 Acres designed around walkability health, and sustainability and convenience.
This development is supercharging and already fast growing Asian Community. The second largest concentration of asian-americans in the United States are in Houston, Texas.
In Phoenix near Anthem Center tsmc is investing 165 billion. Including 6 fabulous, packaging centers in an R&D Center
The project is expected to produce 6,000 direct manufacturing jobs and over 20,000 construction jobs.
Anthem is White shows the closest center to TSMC's investment.
But we anticipate the benefits will be found throughout the greater metro area, which represents approximately 40% of white Stone's portfolio.
And Dallas explosive growth is occurring around our Elder Road Center in plans to build and expand on the McKinney Airport. Have recently been announced adding 47,000 square foot. Ten miles, which is intended to handle 1 million passengers annually within 5 years.
This expansion is a result of numerous corporate headquarters located in McKenney. It will likely add to the attractiveness of the area for more major corporations.
Construction is already begun. On the new airport is expected to open late next year.
In Austin, we announced the purchase of San Clemente Real Estate Center, which sits across the road from our Davenport Center.
Both of our properties will benefit from the recent improvements to the loop 360, which would increase the traffic above the current 80,000 vehicles per day are centers currently enjoy.
In addition, the 4 Seasons is adding nearly 200, high-end residences to the area. This is another opportunistic. Acquisition that feder criteria as well.
With all of these developments, our leasing agents are constantly working to ensure our tenant mix is properly connected to the community, and we'll see the benefits in the same story: net operating income growth. As we have the right tenant mix,
In some cases, we'll benefit with without investment to a center Lake. Woodlands would be an example of a center that's Prime benefit from change with out Redevelopment
In other cases line Square, being a primary example, we can make in modest Redevelopment in the investment and capture significant gains upgrading a center to match the neighborhood.
And finally we've got a few centers like Boulevard place and Dana Park where we have land for development where we expect to capture additional growth and quite possibly partnering with another firm to develop mixed juice assets at the center.
Worth of development and Redevelopment in order to supplement our growth.
In terms of guidance, we have up to 1% of Redevelopment growth embedded in our longer term. Same store, growth Target and we'll add development growth. Once we have greater visibility into timing on larger Pro larger development projects in the area,
I'll close by thanking the different teams at Whitestone, for their ability to work together in a seamless fashion. Calling out 1 group. I'm very pleased with is the tight integration between our Acquisitions and leasing teams allowing us to move quickly and Acquisitions and integrate into our operations.
That same closeness runs between Leasing.
Property management, legal, finance—really throughout the entire company. We're a team-based company, and this is proven in the efforts and the ways we've exceeded these past years.
This may be because of our smaller size but overall we appreciate that we've got these great teams, all working hard, towards the same objectives. And with that, I'll turn it over to Scott to cover the financials.
Thank you, Christine.
This morning, we reiterated our 2025 $1.33 to $17 core ffo per share guidance.
And our longer term 3 to 5% same store in a wide growth Target.
We have also reiterated our forecast for your your end occupancy in the 94 to 95% range.
We have strong momentum going into the second half, which is where we typically fill spaces we've taken back at the beginning of the year.
Another measure of health of the business, our bad debt for the quarter, ranges under, 1% of revenues.
Nearly identical to this time last year and within our forecasted brain.
In the last 12 months, pro forma debt to EBITDA ratio was 7.2 times.
And improvement from 7.8 times for the same period a year ago.
This is up slightly from last quarter with the acquisition of San Clemente in Hulen in the second quarter.
We anticipate property Acquisitions and property sales to be roughly balanced through the end of the year and we expect year end. The last 12 months. Proforma ibida re to be about 7 times.
We're in the we're in the process of recasting our credit facility.
And Bank demand seems to be very strong.
our goals are to further, ladder, our debt, expand our bank group, and deepen, the relationships with our existing Banks,
However, versus 2022. When we last recasted, our credit facility Whitestone is a very different company.
Debt to ibida re is down over a full, turn driven primarily by ibida re growing 13.9% since Q2 of 2022.
We've proven the value of high return shop space in strengthened both our tenant base and the quality of our centers.
We've been disciplined with our capital.
Delivered top quartile same store and AI growth.
Rod, and our investor base.
And position the company for continued strong growth.
I anticipate, I'll be able to provide a more detailed update on the credit facility recast on the next earnings call.
In terms of white stones liquidity, we had 5.3 million in cash and 69 million available under the credit facility at the end of the quarter.
Our dividend remains very well supported at approximately 50% of our ffo and we expect to grow the dividend level in conjunction with earnings growth.
We are focused on continuing to execute our plan and in turn Financial results.
And with that, we will open the line for questions.
Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2. If you would like to remove your question from the queue for participants using speaker equipment and may be necessary to pick up your handset before pressing the star keys.
1 moment, please while we pull for questions.
The first question is from Mitch. Germaine from Citizens Capital Markets, please go ahead.
Uh, thanks for taking my question. Um,
Seems like the next couple quarters, this 1 as well. The next 2 have some pretty tough.
Seam store comps.
So, I'm curious what gives you the confidence that?
Um, you can continue to uh, meet your forecast in the back part of the year.
that they'd like uh, obviously we do a
Very detailed forecasting. We look ahead at our tenants. Uh, we look at those tenants that that come in. You saw this quarter that we, uh, brought up our occupancy, 100 basis points from q1. Those kind of activities, obviously, will contribute to Future. Same story in oi growth. So, as we look at the the projections of the activity, we've done we do anticipate uh Stronger, same steroid growth in in the upcoming quarters versus Q2 uh, for the 6 months. I think we're right. Just a little under 4% which is, you know, within our guidance range
And, Mitch, it's Scott. I'll just add to that that there are a number of large tenants that are already under contracts and are in their free rent periods.
So they're, they're their rents are not reflected in the same store numbers that you saw on the second quarter. But we, uh, a lot of that is just free rent coming into effect or going out in Q3 and Q4
Got you Andy. Do you get any benefit from Pickler in uh, in the second part of the year? Or are they a back-end weighted commencement?
So there’s a week, we anticipate, they’re going to commence in the back half of the year. There will be some early, you know, concession periods. So it’ll be minimal to the same store in Hawaii, I think, this year from Pickler. But obviously, as we project out to future quarters, a number of these activities are going to significantly increase the momentum we’ve got in that category.
great, thank you for that and then
Uh, Dave, you mentioned $40 million of acquisitions and dispositions.
I the fact that you gave that number and seemed to be pretty certain about, it leads me to believe that some of this activity is already in process.
Anything that you want to share with regards to, you know, what's happening there.
Uh,
Sure. I mean I think we've we've been uh, very clear on our objectives of, you know, looking at our portfolio continuing to evaluate every property. Looking for those that we feel like uh We've Tapped Out the value, uh, looking for opportunities and neighborhoods where we find assets. So we we do have a, number of we do have a number of of activities going on. Uh, we are seeing a little bit more product coming to Market so 1 of the things we're seeing is is a little bit more product than we've, we've seen. Uh, but we do have, you know, we do have obviously a number of activities. I did comment that we expect to be about 40 million and we feel pretty good about that number. So that does tell you that we're you know, we're we're moving along in that process but uh, you know, recycling is just something we should be doing. It's just like any portfolio where you're continuing to look at your your Holdings and uh make sure you're allocating capital in the best way. So uh, you know, we're roughly balanced. I think we talked about 150 or so sales and
Uh I'm sorry 150 or so Acquisitions and 125 million or so of disposition. So just for the balance of the Year, you'll see us continue to do what we've done for the last couple years which is upgrade this portfolio. Uh continue to add value through getting a Better Properties in the mix.
Great lesson for me, looks like interest expense. Um forecast moved up slightly.
And I know that you built in some potential savings from Pillar Stone.
That obviously seems to be a little bit, um, delayed, which I'm not surprised about. Is there anything else that's kind of motivating that change that I should be aware of?
Yeah, sure. I don't, I don't think we had any Pillar Stone Savings baked into the forecast, um, but.
uh really, what's driving that interest expense is is just that in our recycling efforts we some of the Acquisitions have come ahead of some of the dispositions
And so uh, that that million-dollar increase, you see an interest expense is going to be offset by increased uh non same store, you know? I
Uh, maybe even a little accretive on those efforts. So it it's really just Capital that we had to put out there to um
Purchase a few properties.
so just a timing thing, and then Scott from that regard, are we still thinking
You know, kind of sub, 7 times debt to EB by year end.
On the last 12 months basis, I think we'll be uh right around 7 and if we're just talking about the fourth quarter annualized, probably mid sixes.
Is where we're forecasting.
Thanks b****.
The next question is from gaurav. Mehta from Alliance Global Partners. Please go ahead.
Side in those activations as far as Lisa opportunity and and maybe Mark to Market rent potential.
Sure, I'll, I'll I'll start out again and uh allow some of my teammates to chime in if they'd like. But uh, you know, I think fundamentally gar of the most important thing we looked at was the the quality of the, the neighborhoods and locations and the trajectory, uh, both. Um, both the Fort Worth acquisition and the, the Austin Acquisitions are in in really great. Uh, submarkets, they're in, in areas with with strong household, incomes traffic growth, and then neighborhoods that are continuing to get better. Uh, South Hulan Inn in Fort Worth, is adjacent to the, to the Hulen Mall, which is, uh, a mall that's going through Redevelopment. There's continues to be activities there. Uh, I think as we look at the the opportunity, obviously, uh, continuing to be able to improve rents is a, is a part of that and continuing to to, to look at the tenant mix and uh, you know, upgrade that in conjunction with what we see going around the area. Uh, and and and
Austin. It's it's a couple things. We have a a sister property right across Loop 360 that's Davenport. Uh, so we're going to get some good synergies by those 2 properties. Uh, being very close to each other and another 1. It's uh, it's just 1 of the best areas in Austin with very little retail around and and so we'll be uh, you know, you've got a really strong restaurant there, that gets the local Direct.
Raw. And so we'll be able to do a number of things from the tenant mix and and drive rents. So I think the opportunity for us on both of these is kind of our, our bread and butter, it is buying properties, in areas that are, uh, have an upward trajectory where the center is, you know, trailing a bit and we can come in and apply our model and really continue to move the tenant base and move the rents.
Okay. Um, second question, on the, on the recycling, on the 40 million dollars of of assets that you talked about, uh that could be sold. Uh, have you guys already shortlisted, uh, the properties that that you plan to sell and and would you still consider selling if you don't find the right acquisition opportunities this year?
Uh, sure. You know, we all we are evaluating our properties on a regular basis, right? It's what we do. We look at, uh, cash flow models. We understand the surrounding area, we look at the tenant mix and we, you know, look and and that that what's going on in the market. So none of this is ever set in stone. Uh, you know, when we identify our property, uh, that we think it makes sense to to invest and move on. It's it's obviously based on a a value that we think is appropriate for receiving for that property. So so, you know, we we annually do annually quarterly. Monthly do a review of our Holdings. Uh, and we you know, there's there's fluidity in that based on market conditions but we do see we do see good conditions right now. As I mentioned, we're seeing a little
Bit more product on the acquisition side and we continue to see, you know, interest in some of the the assets we've been selling, which are, you know, a little, a little different quality than than the ones we're buying, but, local buyers and other buyers seem to have a pretty strong interest in those.
Okay, thank you. That's all I had.
Thanks Cara.
The next question is from Barry. Oxford from Colour. Please go ahead.
Great guys. Thanks uh just building on the uh, Acquisitions. What have you seen as as far as from a pricing standpoint or cap rate? Uh, you know, let's just say from January 1st to now and then on a market basis or are you seeing any of your markets, uh, on a pricing basis, be more, uh, favorable on a risk adjusted, uh, basis or you guys just more on an asset by asset, uh, type of, um, uh, uh, mindset.
I'll, I'll comment on the the cap rates, I'll let Christine, maybe give some some thoughts on the markets, but, uh, right. You know, from a cap rate basis. I do think we've seen, uh, you know, some some, uh, some leveling of the cap rates, uh, less volatility there. Uh, you know, if you look at slide 10 of our investor presentation, we've we've given the, you know, the going in cap rates on the centers. We've bought most recent acquisitions were in the
Over the last, you know, several months and quarters and appears to be to be settling in for the type of product we're looking at.
And I think, um, what we're also starting to see is just um, with the shifting market trends with a growth that we're starting to we're anticipating every time we buy a center, What's the timing of the re merchandising effort or is it something that we see as a potential Redevelopment? And um you know, most of the time? The re merchandising that, we look at really start the curing, within 18 months of when we buy an asset and then along with that something that might uh see as something like Garden, Oaks, for example, which we bought at a fairly good price, but was waiting, you know, for an adjacent property to be developed before. We'd start doing the Redevelopment with it. So we kept the in place cash flow, uh, which is fairly strong and then we'll start moving in to Redevelopment probably in another, uh, you know, year to probably around in a year. So, you know, and then this is based again on what we see as the market conditions, as I just spoke about today. Um, it's our our locations have really, really strong infrastructure development, um, you know, density,
Densification coming in. Um, and it's it's been, uh, rather impressive and, and much of that has to do with the communities that we choose for growth.
Perfect. Thanks for the color guys.
Thanks Barry. Yep.
The next question is from John masoka from B Riley Securities. Please go ahead.
Good morning everyone. Um, maybe thinking about kind of the has gone maybe thinking about the, um, same score growth guidance. You know how much is that right now is subject to leasing activity that are going on now, or is going to be going on the remainder of 3 q and 4 q and how much of that?
Growth is really locked in based on things. You have signed that are going through free rent, period. I know you mentioned a little bit in in kind of Mitch's question, but is there any kind of, you know, is that kind of set in stone at this point just given
You know, the free rent period that tends to exist for bigger tenants.
But I, I think what we have, well, we have in our forecast right now, John is just normal leasing activity.
And, and so there's there's nothing extraordinary happening in the third and fourth quarters that those same store forecasts are based on so that without getting into a lot of detail. I think it's just it's just our regular lease expirations and um
Just just normal, leasing activity. I don't know if that helps at all.
That makes sense. I'm just kind of thinking like is the activity, you're going to be engaging in on the leasing front, you know, the remainder of this quarter and into 4q really going to be more of a 26 event and it's stuff. You did in 1 Q.
Two Qs, maybe even last year, that's going to be driving the remainder of kind of the same store growth. I'm just kind of thinking, is there any...
You know, if something happens on a macro front, whatever it may be, it means how much of that is kind of variable. Um, in that guidance today,
We we have a couple large spaces that we're leasing, that will run into 2026 that are, but they're built into the forecast that way, and then we just have routine leasing, that's that's going on. I don't, I don't know if they have a Christine, would add anything but I think, I think it's just, it's just normal there. There, there is a mix in there, but it's a, it's a normal mix. Yeah, I do think, John is, as you said at a macro level, you know, the same store on a wide Trails, the, the leasing activity. And so I think we're very bullish on, uh, you know, balance of the Year. Same story. Noi as we looked at 26, uh, what we've been doing in our portfolio and the quality of tenants, we've been bringing in and the re merchandising efforts. So, um, you know, I think we've, we've, we've given the guidance for 25. We're we're bullish about where we're headed and we do think that you're you're on and that there is a bit of a trail on the same store in oi to your leasing activity.
Um and then what are you kind of seeing in terms of Trends, on on leasing spreads, starting from a very high basis, obviously in in 3Q of last year, but things have kind of trended down. Um, understand 2 H's are stronger leasing season, so just kind of, is it, you know, is it maybe, you know, once again understanding starting from a high base, is there kind of a seasonal trough in kind of 1 q2q in a bounce back in 2 H or is, is some of these tightening? Maybe a little bit of of a normalization of things and, you know, the macro environment, the leasing environment. Etc. Well, well, if I if I look at the leasing spreads the, the, the new leasing spreads were, uh, just north of 40% and that's there, weren't a ton of leases in there. But that, that's based on some very strong, um, restaurant activity that we had. So second generation restaurant spaces, that were filling.
TI and leasing commission amount, then we've seen in Prior quarters. So, I think if you were to net, if you were to net the leasing spreads against the, uh, TI and Leasing.
Commissions that they're going to, they're going to come in pretty close to the same amount.
okay, I appreciate that color and then last 1 for me, um,
On a short-term basis. Kind of where are you comfortable? Taking leverage if for whatever reason
You know, maybe the acquisition environment is more attractive than dispositions, or there's something that doesn't kind of line up their timing. I mean West,
I think we've we've, yeah, I'll start, we've, we've committed to, you know, continuing to improve our balance sheet as we grow. So, I think that's our our commitment. I think Scott talked about where we expect, uh, debt to ibida or E to B year end. If you look back the progress we've made over the last couple of years is is very significant. So, you know, I, I, I just think for us, it's continuing to to execute, uh, to grow this platform to strengthen the balance sheet to strengthen our investor base. So you know what, what we're comfortable on taking leverage to. I think we're we're comfortable on doing the things. We said we're going to do which is is we're going to grow earnings and we're going to strengthen our balance sheet. Uh in conjunction you can do both things.
Okay. And imagine the answer is no but you know essentially some of this acquisition activity you're seeing is attractive. It's not contingent on you closing disposition activity. First,
No, I I don't think so. I mean, we have, uh, you know, we do have uh, you know, different sources of capital, we have a, a credit facility. So uh, you know, we have largely been, uh, Capital neutral on, on our Recycling and we're going to continue to do that. We said that was the, the activity for the balance of the year. So, you know, we're we're, we're thinking ahead, we're looking at Acquisitions. We obviously have a, a capital sources that allow us to, to act more quickly, than, than many other buyers. And so, uh, I think I answered your question in a roundabout way there, that that makes sense. Um, and that's it for me. Thank you very much.
Thanks John.
There are no further questions at this time. I would like to turn the floor back over to Dave hullman, chief executive officer for closing comments.
Uh, thanks to all for joining our call. Uh, we appreciate your, your interest in White Stone. Uh, we we appreciate giving you an update and look forward to finishing the year and look forward to to further Communications. If uh, there's anything we can do any questions, anyone has please feel free to, please, feel free to reach out to us. Thanks and have a great day.
This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
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