Whitestone REIT Q3 2024: Assets $400M, Liabilities $50.6M

TL;DR

Whitestone REIT Q3: $400M assets, $50.6M liabilities. Watch those debt maturities in 2028/2029.

AI Summary

Whitestone REIT filed its Q3 2024 10-Q report on October 31, 2024, detailing its financial performance for the period ending September 30, 2024. The company's financial statements show total assets of $400,000,000 and total liabilities of $50,645,877. Key debt obligations include $50,000,000 due January 31, 2028, at 5.09% interest, and $50,000,000 due March 22, 2029, at 5.17% interest.

Why It Matters

This filing provides insight into Whitestone REIT's financial health and debt structure, which can impact its ability to fund operations and future growth.

Risk Assessment

Risk Level: medium — The company has significant debt obligations maturing in the coming years, which could pose refinancing risks.

Key Numbers

• $400.0B — Total Assets (As of September 30, 2024)
• $50.6B — Total Liabilities (As of September 30, 2024)
• $50.0M — Debt Maturity (Due January 31, 2028)
• $50.0M — Debt Maturity (Due March 22, 2029)

Key Players & Entities

• Whitestone REIT (company) — Filer of the 10-Q
• 20240930 (date) — End of the reporting period
• 20241031 (date) — Filing date
• $400,000,000 (dollar_amount) — Total assets
• $50,645,877 (dollar_amount) — Total liabilities
• January 31, 2028 (date) — Maturity date for a $50,000,000 debt
• March 22, 2029 (date) — Maturity date for a $50,000,000 debt

FAQ

Key Financial Figures

• $0.001 — hares of Beneficial Interest, par value $0.001 per share WSR New York Stock Exchan

Filing Documents

• wstr20240930_10q.htm (10-Q) — 2403KB
• ex_715330.htm (EX-31.1) — 15KB
• ex_715331.htm (EX-31.2) — 16KB
• ex_715332.htm (EX-32.1) — 6KB
• ex_715333.htm (EX-32.2) — 5KB
• 0001437749-24-032829.txt ( ) — 9659KB
• wstr-20240930.xsd (EX-101.SCH) — 80KB
• wstr-20240930_cal.xml (EX-101.CAL) — 69KB
• wstr-20240930_def.xml (EX-101.DEF) — 618KB
• wstr-20240930_lab.xml (EX-101.LAB) — 501KB
• wstr-20240930_pre.xml (EX-101.PRE) — 657KB
• wstr20240930_10q_htm.xml (XML) — 1339KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements . 1 Consolidated Balance Sheets as of September 30, 2024 (Unaudited) and December 31, 2023 1 Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) for the Three and Nine Months Ended September 30, 2024 and 2023 3 Consolidated Statements of Changes in Equity (Unaudited) for the Three and Nine Months Ended September 30, 2024 and 2023 6 Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2024 and 2023 8

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 10 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations . 32 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk . 58 Item 4.

Controls and Procedures

Controls and Procedures . 58

- OTHER INFORMATION

PART II - OTHER INFORMATION Item 1. Legal Proceedings . 59 Item 1A. Risk Factors . 59 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds . 60 Item 3. Defaults Upon Senior Securities . 60 Item 4. Mine Safety Disclosures . 60 Item 5. Other Information . 60 Item 6. Exhibits . 60 Exhibit Index 61

Signatures

Signatures 62 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. Whitestone REIT and Subsidiaries CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) September 30, 2024 December 31, 2023 (unaudited) ASSETS Real estate assets, at cost Property $ 1,243,067 $ 1,221,466 Accumulated depreciation ( 243,500 ) ( 229,767 ) Total real estate assets 999,567 991,699 Investment in real estate partnership — 31,671 Cash and cash equivalents 2,534 4,572 Restricted cash — 68 Escrows and deposits 3,667 24,148 Accrued rents and accounts receivable, net of allowance for doubtful accounts 32,541 30,592 Receivable from partnership redemption 31,643 — Receivable due from related party 15,186 1,513 Unamortized lease commissions, legal fees and loan costs 14,148 13,783 Prepaid expenses and other assets (1) 2,826 4,765 Finance lease right-of-use assets 10,449 10,428 Total assets $ 1,112,561 $ 1,113,239 LIABILITIES AND EQUITY Liabilities: Notes payable $ 633,552 $ 640,172 Accounts payable and accrued expenses (2) 36,185 36,513 Payable due to related party 1,577 1,577 Tenants' security deposits 9,175 8,614 Dividends and distributions payable 6,279 6,025 Finance lease liabilities 789 721 Total liabilities 687,557 693,622 Commitments and contingencies: — — Equity: Preferred shares, $ 0.001 par value per share; 50,000,000 shares authorized; none issued and outstanding as of September 30, 2024 and December 31, 2023 — — Common shares, $ 0.001 par value per share; 400,000,000 shares authorized; 50,645,877 and 49,610,831 issued and outstanding as of September 30, 2024 and December 31, 2023, respectively 51 50 Additional paid-in capital 636,192 628,079 Accumulated deficit ( 216,044 ) ( 216,963 ) Accumulated other comprehensive income (loss) ( 679 ) 2,576 Total Whitestone REIT shareholders' equity 419,520 413,742 Noncontrolling interest in subsidiary 5,484 5,875 Total equity 425,004 419,617 Total liabi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2024 (Unaudited) The use of the words "we," "us," "our," "Company" or "Whitestone" refers to Whitestone REIT and our consolidated subsidiaries, except where the context otherwise requires. 1. INTERIM FINANCIAL STATEMENTS The consolidated financial statements included in this report are unaudited; however, amounts presented in the consolidated balance sheet as of December 31, 2023 are derived from our audited consolidated financial statements as of that date. The unaudited consolidated financial statements as of and for the period ended September 30, 2024 have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information on a basis consistent with the annual audited consolidated financial statements and with the instructions to Form 10 -Q. The consolidated financial statements presented herein reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of the financial position of Whitestone and our subsidiaries as of September 30, 2024 and December 31, 2023 , and the results of operations for the three and nine month periods ended September 30, 2024 and 2023 , the consolidated statements of changes in equity for the three and nine months ended September 30, 2024 and 2023 and cash flows for the nine months ended September 30, 2024 and 2023 . All of these adjustments are of a normal recurring nature. The results of operations for the interim periods are not necessarily indicative of the results expected for a full year. The statements should be read in conjunction with the audited consolidated financial statements and the notes thereto which are included in our Annual Report on Form 10 -K for the year ended December 31, 2023 . Business . Whitestone was formed as a real estate investment trust ("REIT") pursuant to the Texas Real Estate Investment Trust Act on August 20, 1998. In July 2004, we changed ou

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2024 (Unaudited) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Consolidation. We are the sole general partner of the Operating Partnership and possess full legal control and authority over the operations of the Operating Partnership. As of September 30, 2024 and December 31, 2023 , we owned a majority of the partnership interests in the Operating Partnership. Consequently, the accompanying consolidated financial statements include the accounts of the Operating Partnership. Noncontrolling interest in the accompanying consolidated financial statements represents the share of equity and earnings of the Operating Partnership allocable to holders of partnership interests other than us. Net income or loss is allocated to noncontrolling interests based on the weighted-average percentage ownership of the Operating Partnership during the period. Issuance of additional common shares of beneficial interest in Whitestone (the "common shares") and units of limited partnership interest in the Operating Partnership that are convertible into cash or, at our option, common shares on a one -for- one basis (the "OP units") changes the percentage of ownership interests of both the noncontrolling interests and Whitestone. Estimates regarding Pillarstone OP' s financial condition and results of operations. We rely on the reports furnished by our third -party partners for financial information regarding the Company's investment in Pillarstone OP. As of September 30, 2024 and December 31, 2023, Pillarstone OP's financial statements have not been made accessible to us. Consequently, we have estimated the financial status and operational outcomes of Pillarstone OP based on the information accessible to us at the time of this report. Equity Method. In compliance with Accounting Standards Update ("ASU") 2014 - 09 ("Topic 606" ) and Accounting Standards Codification ("ASC") 610, " Other Income-Gains and Losses from the D

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2024 (Unaudited) Restricted Cash. We classify all cash pledged as collateral to secure certain obligations and all cash whose use is limited as restricted cash. During 2015, pursuant to the terms of our $ 15.1 million 4.99 % Note, due January 6, 2024 ( see Note 7 (Debt)), which was collateralized by our Anthem Marketplace property, we were required by the lenders thereunder to establish a cash management account controlled by the lenders to collect all amounts generated by our Anthem Marketplace property in order to collateralize such promissory note. The note was paid off in January 2024. As of September 30, 2024 , we had no restricted cash. Derivative Instruments and Hedging Activities. We utilize derivative financial instruments, principally interest rate swaps, to manage our exposure to fluctuations in interest rates. We have established policies and procedures for risk assessment, and the approval, reporting and monitoring of derivative financial instruments. We recognize our interest rate swaps as cash flow hedges with the effective portion of the changes in fair value recorded in comprehensive income (loss) and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. Any ineffective portion of a cash flow hedges' change in fair value is recorded immediately into earnings. Our cash flow hedges are determined using Level 2 inputs under ASC 820, " Fair Value Measurements and Disclosures. " Level 2 inputs represent quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable. As of September 30, 2024 , we consider our cash flow hedges to be highly effective. Development Properties. L and, buildings and improvements are recorded at cost. Expenditures related to the development of real estate are carried at co

View Full Filing

View this 10-Q filing on SEC EDGAR