HOUSTON - Whitestone REIT (NYSE: NYSE:WSR), a real estate investment trust, has reported significant operational and financial achievements in its recent CEO letter to shareholders. The company highlighted a 16% increase in the Net Asset Value (NAV) calculations by sell-side analysts since the third quarter of 2023, marking the second-highest increase within its peer group. This growth is attributed to Whitestone's strategic focus on high-return shop space and community-oriented retail centers. According to InvestingPro data, WSR's stock has reflected this strong performance, delivering a 28.37% year-to-date return and currently trading near its 52-week high of $15.19. Based on InvestingPro's Fair Value analysis, the stock appears to be trading above its intrinsic value.
The company has achieved 10 consecutive quarters of leasing spreads in excess of 17%, underscoring the effectiveness of its strategic approach. Whitestone has driven its occupancy rate to 94.1% in the third quarter of 2024 and increased its Same Store Net Operating Income (NOI) growth target to between 3.75% and 4.75%. These results have been achieved with less capital, as the majority of the company's centers are already optimally configured. InvestingPro analysis reveals several positive indicators, including a strong gross profit margin of 69.48% and consistent dividend payments maintained for 15 consecutive years. For deeper insights into WSR's operational metrics and peer comparison, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
Financially, Whitestone has reiterated its 2024 Core Funds From Operations (FFO) per share estimate of $0.98 to $1.04, representing an 11% growth compared to 2023. The company anticipates that Same Store NOI will continue to drive strong Core FFO per share growth into 2025 and beyond. Whitestone has also declared dividends for the first quarter of 2025, increasing the dividend by 9%. InvestingPro data shows the company has raised its dividend for three consecutive years, with a current yield of 3.55% and a notable dividend growth rate of 12.5% over the last twelve months.
The company's tenant quality has improved significantly since the pandemic, with the Bad Debt / Revenue percentage being reduced by 50% from the 2019 level. This is a testament to the leasing team's effective tenant mix refresh strategy. Whitestone has also strengthened its financial profile by reducing its leverage to a Net Debt / Pro Forma EBITDAre ratio of 7.2x and is projected to achieve a range of 6.6x to 7.0x by the end of 2024.
In 2024, Whitestone acquired Garden Oaks Shopping Center in the Houston MSA and Scottsdale Commons in the Phoenix MSA, both of which enhance the company's growth. The acquisition strategy is supported by well-timed, well-priced dispositions, with disposition cap rates more than 100 basis points below acquisition cap rates.
The company's Board has been refreshed with the additions of Krissy Gathright and Don Miller, who bring extensive real estate and executive experience. The Board is focused on acting in the best interests of all shareholders and enhancing the value of their investment.
The information presented in this article is based on a press release statement from Whitestone REIT.
In other recent news, Whitestone REIT has been the subject of several significant developments. The company's third-quarter financial results for 2024 revealed a core Funds From Operations (FFO) of $0.25 per share, prompting Truist Securities to reaffirm a Buy rating for the stock and increase the price target to $16.00. Truist's analysts also projected a 2025 Core FFO of $1.07 per share.
In a surprising turn of events, MCB Real Estate withdrew its acquisition offer for Whitestone REIT due to the latter's board resistance. Despite the retracted proposal, MCB maintains its position as a significant shareholder of Whitestone and is considering other ways to ensure the board fulfills its responsibilities.
In addition to financial performance, Whitestone demonstrated strategic progress by adding a high-end liquor store and an Asian grocer to its portfolio, driving occupancy rates to 94.1%. The company also plans to onboard two new trustees by the end of the year. These are the latest in a series of recent developments for Whitestone REIT.
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