Whitestone REIT (
, a real estate investment trust (REIT), reported second quarter
2012 recurring FFO (funds from operations) of 23 cents per share,
missing the Zacks Consensus Estimate by 4 cents. However, this
compares favorably with recurring FFO of 20 cents in the
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Recurring FFO came in at $2.9 million compared with $2.0 million in
the year-ago quarter. The reported FFO was $2.7 million, or 22
cents per share compared with $1.6 million or 15 cents per share in
the year-ago quarter.
Total revenue in the quarter was $11.0 million, up 36.1% from $8.1
million in the year-ago period, but in line with the Zacks
Consensus Estimate. The year-over-year increase was attributable to
27.1% increase in rental revenues and 80.5% surge in other
Property net operating income (NOI) stood at $6.7 million, up 35%
year over year. The increase was mainly attributable to gains from
Total property occupancy increased to 87% from 81% in the year-ago
quarter. This is the highest increase since the company's initial
public offering in August 2010. The increase was attributed to
Whitestone's ongoing re-development, re-leasing and portfolio
restructuring activities during the quarter. In addition, operating
portfolio occupancy increased to 87% from 84% in the year-ago
During the quarter, Whitestone signed 92 new and renewal leases
spanning 190,000 square feet. The company reported an increase of
19% in new and renewal lease agreement from the year-ago period. In
addition, Whitestone recorded a year-over-year increase of 18% in
tenant base to 963.
The company is focused on acquisition of properties located in
economically vibrant and culturally diverse markets. In this
connection, it acquired a Class A Community Center -- The Shops at
Pinnacle Peak -- for $6.4 million during the quarter. Additionally,
Whitestone has around $40.0 million of additional acquisition
contract signed during the quarter.
As of June 30, 2012, Whitestone owned 46 community center
properties spanning approximately 3.6 million square feet,
including two development land parcels.
At the end of second quarter, Whitestone had cash and cash
equivalents of $3.9 million and $101.0 million available under the
revolving credit facility.
Whitestone declared a quarterly dividend of 3 cents per share, to
be paid in three equal installments in July, August and September
2012. The company has paid the first dividend installment on July
6. The August and September installments will be paid on August 7
and September 7, respectively to common shareholders of record as
of July 31 and August 31, respectively.
Based on Whitestone's significant leasing activity, ongoing
portfolio restructuring and strong liquidity position, we expect
analysts to up their estimates in the coming days. Currently, the
Zacks Consensus Estimate for 2012 and 2013 are pegged at $1.09 and
One of its competitors -
General Growth Properties Inc. (
- recently reported second quarter recurring FFO of 23 cents per
share, beating the Zacks Consensus Estimate by 2 cents. Whitestone
carries a Zacks #2 Rank, implying a short-term Buy rating. However,
we reiterate our long-term Neutral recommendation on the stock.
Note: FFO, a widely accepted and reported measure of the
performance of REITs, is derived by adding depreciation,
amortization and other non-cash expenses to net income.