(Mark One) | |
[x] | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2013 |
OR |
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____________ to ____________ |
Commission file number 001-34855 |
WHITESTONE REIT |
(Exact Name of Registrant as Specified in Its Charter) |
Maryland | 76-0594970 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
2600 South Gessner, Suite 500 Houston, Texas | 77063 | |
(Address of Principal Executive Offices) | (Zip Code) |
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Item 4. |
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June 30, 2013 | December 31, 2012 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Real estate assets, at cost | ||||||||
Property | $ | 481,939 | $ | 409,669 | ||||
Accumulated depreciation | (59,569 | ) | (53,920 | ) | ||||
Total real estate assets | 422,370 | 355,749 | ||||||
Cash and cash equivalents | 6,020 | 6,544 | ||||||
Marketable securities | 912 | 1,403 | ||||||
Escrows and acquisition deposits | 5,396 | 6,672 | ||||||
Accrued rents and accounts receivable, net of allowance for doubtful accounts | 8,850 | 7,947 | ||||||
Related party receivable | — | 652 | ||||||
Unamortized lease commissions and loan costs | 5,079 | 4,160 | ||||||
Prepaid expenses and other assets | 2,864 | 2,244 | ||||||
Total assets | $ | 451,491 | $ | 385,371 | ||||
LIABILITIES AND EQUITY | ||||||||
Liabilities: | ||||||||
Notes payable | $ | 266,401 | $ | 190,608 | ||||
Accounts payable and accrued expenses | 10,489 | 13,824 | ||||||
Tenants' security deposits | 3,348 | 3,024 | ||||||
Dividends and distributions payable | 5,028 | 5,028 | ||||||
Total liabilities | 285,266 | 212,484 | ||||||
Commitments and contingencies: | — | — | ||||||
Equity: | ||||||||
Preferred shares, $0.001 par value per share; 50,000,000 shares authorized; none issued and outstanding as of June 30, 2013 and December 31, 2012 | — | — | ||||||
Common shares, $0.001 par value per share; 400,000,000 shares authorized; 17,052,980 and 16,943,098 issued and outstanding as of June 30, 2013 and December 31, 2012, respectively | 17 | 16 | ||||||
Additional paid-in capital | 225,916 | 224,237 | ||||||
Accumulated other comprehensive gain (loss) | 290 | (392 | ) | |||||
Accumulated deficit | (65,555 | ) | (57,830 | ) | ||||
Total Whitestone REIT shareholders' equity | 160,668 | 166,031 | ||||||
Noncontrolling interest in subsidiary | 5,557 | 6,856 | ||||||
Total equity | 166,225 | 172,887 | ||||||
Total liabilities and equity | $ | 451,491 | $ | 385,371 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Property revenues | ||||||||||||||||
Rental revenues | $ | 11,812 | $ | 8,523 | $ | 22,813 | $ | 16,651 | ||||||||
Other revenues | 2,983 | 2,464 | 5,851 | 4,762 | ||||||||||||
Total property revenues | 14,795 | 10,987 | 28,664 | 21,413 | ||||||||||||
Property expenses | ||||||||||||||||
Property operation and maintenance | 3,348 | 2,759 | 6,413 | 5,111 | ||||||||||||
Real estate taxes | 2,012 | 1,503 | 3,810 | 2,813 | ||||||||||||
Total property expenses | 5,360 | 4,262 | 10,223 | 7,924 | ||||||||||||
Other expenses (income) | ||||||||||||||||
General and administrative | 2,516 | 1,863 | 4,960 | 3,504 | ||||||||||||
Depreciation and amortization | 3,260 | 2,290 | 6,333 | 4,573 | ||||||||||||
Interest expense | 2,613 | 2,107 | 5,062 | 4,080 | ||||||||||||
Interest, dividend and other investment income | (69 | ) | (83 | ) | (88 | ) | (153 | ) | ||||||||
Total other expense | 8,320 | 6,177 | 16,267 | 12,004 | ||||||||||||
Income before loss on sale or disposal of assets and income taxes | 1,115 | 548 | 2,174 | 1,485 | ||||||||||||
Provision for income taxes | (72 | ) | (70 | ) | (137 | ) | (135 | ) | ||||||||
Loss on sale or disposal of assets | (40 | ) | (16 | ) | (48 | ) | (28 | ) | ||||||||
Net income | 1,003 | 462 | 1,989 | 1,322 | ||||||||||||
Less: Net income attributable to noncontrolling interests | 33 | 31 | 70 | 98 | ||||||||||||
Net income attributable to Whitestone REIT | $ | 970 | $ | 431 | $ | 1,919 | $ | 1,224 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Basic and Diluted Earnings Per Share: | ||||||||||||||||
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares | $ | 0.06 | $ | 0.04 | $ | 0.11 | $ | 0.10 | ||||||||
Weighted average number of common shares outstanding: | ||||||||||||||||
Basic | 16,891 | 11,746 | 16,855 | 11,685 | ||||||||||||
Diluted | 17,111 | 11,754 | 17,073 | 11,696 | ||||||||||||
Distributions declared per common share / OP unit | $ | 0.2850 | $ | 0.2850 | $ | 0.5700 | $ | 0.5700 | ||||||||
Consolidated Statements of Comprehensive Income | ||||||||||||||||
Net income | $ | 1,003 | $ | 462 | $ | 1,989 | $ | 1,322 | ||||||||
Other comprehensive gain (loss) | ||||||||||||||||
Unrealized gain on cash flow hedging activities | 761 | — | 493 | — | ||||||||||||
Unrealized gain (loss) on available-for-sale marketable securities | (88 | ) | 33 | 215 | 799 | |||||||||||
Comprehensive income | 1,676 | 495 | 2,697 | 2,121 | ||||||||||||
Less: Comprehensive income attributable to noncontrolling interests | 57 | 30 | 95 | 157 | ||||||||||||
Comprehensive income attributable to Whitestone REIT | $ | 1,619 | $ | 465 | $ | 2,602 | $ | 1,964 |
Accumulated | ||||||||||||||||||||||||||||||||||
Additional | Other | Total | Noncontrolling | |||||||||||||||||||||||||||||||
Common Shares | Paid-In | Accumulated | Comprehensive | Shareholders' | interests | Total | ||||||||||||||||||||||||||||
Shares | Amount | Capital | Deficit | Gain (Loss) | Equity | Units | Dollars | Equity | ||||||||||||||||||||||||||
Balance, December 31, 2012 | 16,943 | $ | 16 | $ | 224,237 | $ | (57,830 | ) | $ | (392 | ) | $ | 166,031 | 685 | $ | 6,856 | $ | 172,887 | ||||||||||||||||
Exchange of noncontrolling interest OP units for common shares | 106 | 1 | 1,056 | — | (1 | ) | 1,056 | (106 | ) | (1,056 | ) | — | ||||||||||||||||||||||
Exchange offer costs | — | — | (23 | ) | — | — | (23 | ) | — | — | (23 | ) | ||||||||||||||||||||||
Issuance of shares under dividend reinvestment plan | 3 | — | 47 | — | — | 47 | — | — | 47 | |||||||||||||||||||||||||
Share-based compensation | 1 | — | 599 | — | — | 599 | — | — | 599 | |||||||||||||||||||||||||
Distributions | — | — | — | (9,644 | ) | — | (9,644 | ) | — | (338 | ) | (9,982 | ) | |||||||||||||||||||||
Unrealized gain on change in value of cash flow hedge | — | — | — | — | 476 | 476 | — | 17 | 493 | |||||||||||||||||||||||||
Unrealized gain on change in fair value of available-for-sale marketable securities | — | — | — | — | 207 | 207 | — | 8 | 215 | |||||||||||||||||||||||||
Net income | — | — | — | 1,919 | — | 1,919 | — | 70 | 1,989 | |||||||||||||||||||||||||
Balance, June 30, 2013 | 17,053 | $ | 17 | $ | 225,916 | $ | (65,555 | ) | $ | 290 | $ | 160,668 | 579 | $ | 5,557 | $ | 166,225 |
Six Months Ended June 30, | ||||||||
2013 | 2012 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 1,989 | $ | 1,322 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 6,333 | 4,573 | ||||||
Amortization of deferred loan costs | 554 | 634 | ||||||
Amortization of notes payable discount | 299 | — | ||||||
Gain on sale of marketable securities | (41 | ) | (32 | ) | ||||
Loss on sale or disposal of assets | 48 | 28 | ||||||
Bad debt expense | 715 | 358 | ||||||
Share-based compensation | 667 | 266 | ||||||
Changes in operating assets and liabilities: | ||||||||
Escrows and acquisition deposits | 1,619 | 1,229 | ||||||
Accrued rents and accounts receivable | (966 | ) | (1,064 | ) | ||||
Unamortized lease commissions | (517 | ) | (600 | ) | ||||
Prepaid expenses and other assets | 246 | 298 | ||||||
Accounts payable and accrued expenses | (2,990 | ) | (1,917 | ) | ||||
Tenants' security deposits | 324 | 161 | ||||||
Net cash provided by operating activities | 8,280 | 5,256 | ||||||
Cash flows from investing activities: | ||||||||
Acquisitions of real estate | (58,403 | ) | (6,400 | ) | ||||
Additions to real estate | (2,476 | ) | (6,465 | ) | ||||
Investments in marketable securities | — | (750 | ) | |||||
Proceeds from sales of marketable securities | 747 | 3,926 | ||||||
Net cash used in investing activities | (60,132 | ) | (9,689 | ) | ||||
Cash flows from financing activities: | ||||||||
Distributions paid to common shareholders | (9,639 | ) | (6,684 | ) | ||||
Distributions paid to OP unit holders | (363 | ) | (559 | ) | ||||
Payments of exchange offer costs | (23 | ) | (306 | ) | ||||
Proceeds from notes payable | 20,200 | 13,156 | ||||||
Proceeds from revolving credit facility, net | 58,400 | — | ||||||
Repayments of notes payable | (15,844 | ) | (1,819 | ) | ||||
Payments of loan origination costs | (1,403 | ) | (1,187 | ) | ||||
Net cash provided by financing activities | 51,328 | 2,601 | ||||||
Net decrease in cash and cash equivalents | (524 | ) | (1,832 | ) | ||||
Cash and cash equivalents at beginning of period | 6,544 | 5,695 | ||||||
Cash and cash equivalents at end of period | $ | 6,020 | $ | 3,863 |
Six Months Ended June 30, | ||||||||
2013 | 2012 | |||||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for interest | $ | 4,597 | $ | 3,375 | ||||
Cash paid for taxes | $ | 237 | $ | 225 | ||||
Non cash investing and financing activities: | ||||||||
Disposal of fully depreciated real estate | $ | 185 | $ | 523 | ||||
Financed insurance premiums | $ | 883 | $ | 780 | ||||
Value of shares issued under dividend reinvestment plan | $ | 47 | $ | 45 | ||||
Debt assumed with acquisitions of real estate | $ | 11,100 | $ | — | ||||
Interest supplement assumed with acquisition of real estate | $ | 932 | $ | — | ||||
Accrued offering costs | $ | 13 | $ | 28 | ||||
Value of common shares exchanged for OP units | $ | 1,056 | $ | 6,224 | ||||
Change in fair value of available-for-sale securities | $ | 215 | $ | 799 | ||||
Change in fair value of cash flow hedge | $ | 493 | $ | — |
June 30, 2013 | ||||||||||||||||
Amortized Cost | Gains in Accumulated Other Comprehensive Income | Losses in Accumulated Other Comprehensive Income | Estimated Fair Value | |||||||||||||
Real estate sector common stock | $ | 1,106 | $ | — | $ | (194 | ) | $ | 912 | |||||||
Total available-for-sale securities | $ | 1,106 | $ | — | $ | (194 | ) | $ | 912 |
December 31, 2012 | ||||||||||||||||
Amortized Cost | Gains in Accumulated Other Comprehensive Income | Losses in Accumulated Other Comprehensive Income | Estimated Fair Value | |||||||||||||
Real estate sector common stock | $ | 1,811 | $ | — | $ | (408 | ) | $ | 1,403 | |||||||
Total available-for-sale securities | $ | 1,811 | $ | — | $ | (408 | ) | $ | 1,403 |
June 30, 2013 | December 31, 2012 | |||||||
Tenant receivables | $ | 6,163 | $ | 3,536 | ||||
Accrued rents and other recoveries | 5,657 | 6,696 | ||||||
Allowance for doubtful accounts | (2,970 | ) | (2,285 | ) | ||||
Total | $ | 8,850 | $ | 7,947 |
June 30, 2013 | December 31, 2012 | |||||||
Leasing commissions | $ | 5,982 | $ | 5,530 | ||||
Deferred financing cost | 5,976 | 4,574 | ||||||
Total cost | 11,958 | 10,104 | ||||||
Less: leasing commissions accumulated amortization | (3,281 | ) | (2,899 | ) | ||||
Less: deferred financing cost accumulated amortization | (3,598 | ) | (3,045 | ) | ||||
Total cost, net of accumulated amortization | $ | 5,079 | $ | 4,160 |
Description | June 30, 2013 | December 31, 2012 | ||||||
Fixed rate notes | ||||||||
$1.1 million 4.71% Note, due 2013 | $ | 1,087 | $ | 1,087 | ||||
$20.2 million 4.2805% Note, due 2023 (1) | 20,200 | 13,850 | ||||||
$3.0 million 6.00% Note, due 2021 (2) | 2,924 | 2,943 | ||||||
$10.0 million 6.04% Note, due 2014 | 9,047 | 9,142 | ||||||
$1.5 million 6.50% Note, due 2014 | 1,430 | 1,444 | ||||||
$11.2 million 6.52% Note, due 2015 | 10,528 | 10,609 | ||||||
$21.4 million 6.53% Notes, due 2013 | 18,530 | 18,865 | ||||||
$24.5 million 6.56% Note, due 2013 | 22,892 | 23,135 | ||||||
$9.9 million 6.63% Notes, due 2014 | 8,758 | 8,925 | ||||||
$9.2 million, Prime Rate less 2.00%, due 2017 (3) | 7,868 | 7,854 | ||||||
$11.1 million 5.87% Note, due 2016 | 12,031 | — | ||||||
$0.9 million 2.97% Note, due 2013 | 387 | 15 | ||||||
Floating rate notes | ||||||||
Unsecured credit facility, LIBOR plus 1.75% to 2.50%, due 2017 (4) | 127,400 | 69,000 | ||||||
$26.9 million, LIBOR plus 2.86% Note, due 2013 | 23,319 | 23,739 | ||||||
$ | 266,401 | $ | 190,608 |
(1) | Promissory note had an original balance of $14.1 million and an interest rate of 5.695%, due in 2013, which was refinanced in May 2013. See below for further discussion of Pinnacle Note. |
(2) | The 6.00% interest rate is fixed through March 30, 2016. On March 31, 2016 the interest rate will reset to the rate of interest for a five-year balloon note with a thirty-year amortization as published by the Federal Home Loan Bank. |
(3) | Promissory note includes an interest rate swap that fixed the interest rate at 5.72% for the duration of the term. |
(4) | We have entered into an interest rate swap that fixed the LIBOR portion of our $50 million term loan under the Facility at 0.84%. The swap will begin on January 7, 2014 and will mature on February 3, 2017. |
Year | Amount Due | |||
2013 | $ | 66,708 | ||
2014 | 19,453 | |||
2015 | 10,786 | |||
2016 | 11,725 | |||
2017 | 135,689 | |||
Thereafter | 22,040 | |||
Total | $ | 266,401 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(in thousands, except per share data) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Numerator: | ||||||||||||||||
Net income | $ | 1,003 | $ | 462 | $ | 1,989 | $ | 1,322 | ||||||||
Less: Net income attributable to noncontrolling interests | (33 | ) | (31 | ) | (70 | ) | (98 | ) | ||||||||
Distributions paid on unvested restricted shares | (11 | ) | (2 | ) | (22 | ) | (6 | ) | ||||||||
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares | $ | 959 | $ | 429 | $ | 1,897 | $ | 1,218 | ||||||||
Denominator: | ||||||||||||||||
Weighted average number of common shares - basic | 16,891 | 11,746 | 16,855 | 11,685 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Unvested restricted shares | 220 | 8 | 218 | 11 | ||||||||||||
Weighted average number of common shares - dilutive | 17,111 | 11,754 | 17,073 | 11,696 | ||||||||||||
Earnings Per Share: | ||||||||||||||||
Basic: | ||||||||||||||||
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares | $ | 0.06 | $ | 0.04 | $ | 0.11 | $ | 0.10 | ||||||||
Diluted: | ||||||||||||||||
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares | $ | 0.06 | $ | 0.04 | $ | 0.11 | $ | 0.10 |
Common Shares (1) | Noncontrolling OP Unit Holders | Total | ||||||||||||||||||
Quarter Paid | Distributions Per Common Share | Total Amount Paid | Distributions Per OP Unit | Total Amount Paid | Total Amount Paid | |||||||||||||||
2013 | ||||||||||||||||||||
Second Quarter | $ | 0.2850 | $ | 4,832 | $ | 0.2850 | $ | 169 | $ | 5,001 | ||||||||||
First Quarter | 0.2850 | 4,807 | 0.2850 | 194 | 5,001 | |||||||||||||||
Total | $ | 0.5700 | $ | 9,639 | $ | 0.5700 | $ | 363 | $ | 10,002 | ||||||||||
2012 | ||||||||||||||||||||
Fourth Quarter | $ | 0.2850 | $ | 4,781 | $ | 0.2850 | $ | 221 | $ | 5,002 | ||||||||||
Third Quarter | 0.2850 | 3,859 | 0.2850 | 224 | 4,083 | |||||||||||||||
Second Quarter | 0.2850 | 3,362 | 0.2850 | 258 | 3,620 | |||||||||||||||
First Quarter | 0.2850 | 3,322 | 0.2850 | 301 | 3,623 | |||||||||||||||
Total | $ | 1.1400 | $ | 15,324 | $ | 1.1400 | $ | 1,004 | $ | 16,328 |
(1) | Effective June 27, 2012, each outstanding Class A common share was reclassified into one Class B common share, and the Class B common shares were redesignated as "common shares." |
Shares | Weighted Average Grant Date Fair Value (1) | ||||||
Non-vested at January 1, 2013 | 534,920 | $ | 12.53 | ||||
Granted | — | — | |||||
Vested | (4,465 | ) | 15.45 | ||||
Forfeited | (25,030 | ) | 12.91 | ||||
Non-vested at June 30, 2013 | 505,425 | $ | 12.49 | ||||
Available for grant at June 30, 2013 | 1,913,564 |
(1) | The fair value of the common shares granted before trading of the common shares commenced on the NYSE MKT on August 26, 2010 were determined based on observable market transactions occurring near the date of the grants. The fair value of the common shares granted subsequent to August 26, 2010 was determined based on the fair value at the date of grant. |
Shares Granted | Shares Vested | |||||||||||||
Non-Vested Shares Issued | Weighted Average Grant-Date Fair Value | Vested Shares | Total Vest-Date Fair Value | |||||||||||
(in thousands) | ||||||||||||||
Six months ended June 30, 2013 | — | $ | — | (4,465 | ) | $ | 69 | |||||||
Year ended December 31, 2012 | 99,700 | 13.03 | (16,208 | ) | 223 | |||||||||
Year ended December 31, 2011 | — | — | (5,169 | ) | 80 | |||||||||
Year ended December 31, 2010 | 31,858 | 14.09 | (55,699 | ) | 695 |
• | the imposition of federal taxes if we fail to qualify as a REIT in any taxable year or forego an opportunity to ensure REIT status; |
• | uncertainties related to the national economy, the real estate industry in general and in our specific markets; |
• | legislative or regulatory changes, including changes to laws governing REITs; |
• | adverse economic or real estate developments in Texas, Arizona or Illinois; |
• | increases in interest rates and operating costs; |
• | inability to obtain necessary outside financing; |
• | decreases in rental rates or increases in vacancy rates; |
• | litigation risks; |
• | lease-up risks; |
• | inability to renew tenants or obtain new tenants upon the expiration of existing leases; |
• | inability to generate sufficient cash flows due to market conditions, competition, uninsured losses, changes in tax or other applicable laws; and |
• | the potential need to fund tenant improvements or other capital expenditures out of operating cash flow. |
• | 30 retail centers containing approximately 2.3 million square feet of gross leasable area and having a total carrying value (net of accumulated depreciation) of $256.5 million; |
• | seven office centers containing approximately 0.6 million square feet of gross leasable area and having a total carrying value (net of accumulated depreciation) of $42.8 million; and |
• | 11 office/flex centers containing approximately 1.2 million square feet of gross leasable area and having a total carrying value (net of accumulated depreciation) of $39.1 million. |
• | three retail Community Centered Properties containing approximately 0.5 million square feet of gross leasable area and having a total carrying value (net of accumulated depreciation) of $76.7 million; and |
• | four parcels of land held for future development having a total carrying value of $7.3 million. |
Three Months Ended June 30, | ||||||||
2013 | 2012 | |||||||
Number of properties owned and operated | 55 | 46 | ||||||
Aggregate gross leasable area (sq. ft.) | 4,597,541 | 3,636,838 | ||||||
Ending occupancy rate - operating portfolio(1) | 87 | % | 87 | % | ||||
Ending occupancy rate - all properties | 86 | % | 87 | % | ||||
Total property revenues | $ | 14,795 | $ | 10,987 | ||||
Total property expenses | 5,360 | 4,262 | ||||||
Total other expenses | 8,320 | 6,177 | ||||||
Provision for income taxes | 72 | 70 | ||||||
Loss on disposal of assets | 40 | 16 | ||||||
Net income | 1,003 | 462 | ||||||
Less: Net income attributable to noncontrolling interests | 33 | 31 | ||||||
Net income attributable to Whitestone REIT | $ | 970 | $ | 431 | ||||
Funds from operations (2) | $ | 4,282 | $ | 2,732 | ||||
Property net operating income (3) | 9,435 | 6,725 | ||||||
Distributions paid on common shares and OP units | 5,001 | 3,620 | ||||||
Distributions per common share and OP unit | $ | 0.2850 | $ | 0.2850 | ||||
Distributions paid as a % of funds from operations | 117 | % | 133 | % |
(1) | Excludes (i) new acquisitions, through the earlier of attainment of 90% occupancy or 18 months of ownership, and (ii) properties that are undergoing significant redevelopment or re-tenanting. |
(2) | For a reconciliation of funds from operations to net income, see "Funds From Operations" below. |
(3) | For a reconciliation of property net operating income to net income, see "Property Net Operating Income" below. |
Three Months Ended June 30, | |||||||||||||||
Overall Property Expenses | 2013 | 2012 | Change | % Change | |||||||||||
Real estate taxes | $ | 2,012 | $ | 1,503 | $ | 509 | 34 | % | |||||||
Utilities | 864 | 713 | 151 | 21 | % | ||||||||||
Contract services | 887 | 671 | 216 | 32 | % | ||||||||||
Repairs and maintenance | 469 | 482 | (13 | ) | (3 | )% | |||||||||
Bad debt | 398 | 226 | 172 | 76 | % | ||||||||||
Labor and other | 730 | 667 | 63 | 9 | % | ||||||||||
Total property expenses | $ | 5,360 | $ | 4,262 | $ | 1,098 | 26 | % |
Three Months Ended June 30, | |||||||||||||||
Same Store Property Expenses | 2013 | 2012 | Change | % Change | |||||||||||
Real estate taxes | $ | 1,453 | $ | 1,505 | $ | (52 | ) | (3 | )% | ||||||
Utilities | 695 | 710 | (15 | ) | (2 | )% | |||||||||
Contract services | 652 | 669 | (17 | ) | (3 | )% | |||||||||
Repairs and maintenance | 399 | 410 | (11 | ) | (3 | )% | |||||||||
Bad debt | 303 | 220 | 83 | 38 | % | ||||||||||
Labor and other | 559 | 660 | (101 | ) | (15 | )% | |||||||||
Total property expenses | $ | 4,061 | $ | 4,174 | $ | (113 | ) | (3 | )% |
Three Months Ended June 30, | ||||||||||||||
New Store Property Expenses | 2013 | 2012 | Change | % Change | ||||||||||
Real estate taxes | $ | 559 | $ | (2 | ) | $ | 561 | Not meaningful | ||||||
Utilities | 169 | 3 | 166 | Not meaningful | ||||||||||
Contract services | 235 | 2 | 233 | Not meaningful | ||||||||||
Repairs and maintenance | 70 | 72 | (2 | ) | Not meaningful | |||||||||
Bad debt | 95 | 6 | 89 | Not meaningful | ||||||||||
Labor and other | 171 | 7 | 164 | Not meaningful | ||||||||||
Total property expenses | $ | 1,299 | $ | 88 | $ | 1,211 | Not meaningful |
Three Months Ended June 30, | ||||||||||||||||||||||||
Same Store | New Store | Total | ||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
Property revenues | $ | 10,724 | $ | 10,856 | $ | 4,071 | $ | 131 | $ | 14,795 | $ | 10,987 | ||||||||||||
Property expenses | 4,061 | 4,174 | 1,299 | 88 | 5,360 | 4,262 | ||||||||||||||||||
Property net operating income | $ | 6,663 | $ | 6,682 | $ | 2,772 | $ | 43 | $ | 9,435 | $ | 6,725 |
Three Months Ended June 30, | |||||||||||||||
2013 | 2012 | Change | % Change | ||||||||||||
General and administrative | $ | 2,516 | $ | 1,863 | $ | 653 | 35 | % | |||||||
Depreciation and amortization | 3,260 | 2,290 | 970 | 42 | % | ||||||||||
Interest expense | 2,613 | 2,107 | 506 | 24 | % | ||||||||||
Interest, dividend and other investment income | (69 | ) | (83 | ) | 14 | (17 | )% | ||||||||
Total other expenses | $ | 8,320 | $ | 6,177 | $ | 2,143 | 35 | % |
Six Months Ended June 30, | ||||||||
2013 | 2012 | |||||||
Number of properties owned and operated | 55 | 46 | ||||||
Aggregate gross leasable area (sq. ft.) | 4,597,541 | 3,636,838 | ||||||
Ending occupancy rate - operating portfolio(1) | 87 | % | 87 | % | ||||
Ending occupancy rate - all properties | 86 | % | 87 | % | ||||
Total property revenues | $ | 28,664 | $ | 21,413 | ||||
Total property expenses | 10,223 | 7,924 | ||||||
Total other expenses | 16,267 | 12,004 | ||||||
Provision for income taxes | 137 | 135 | ||||||
Loss on disposal of assets | 48 | 28 | ||||||
Net income | 1,989 | 1,322 | ||||||
Less: Net income attributable to noncontrolling interests | 70 | 98 | ||||||
Net income attributable to Whitestone REIT | $ | 1,919 | $ | 1,224 | ||||
Funds from operations (2) | $ | 8,326 | $ | 5,853 | ||||
Property net operating income (3) | 18,441 | 13,489 | ||||||
Distributions paid on common shares and OP units | 10,002 | 7,243 | ||||||
Distributions per common share and OP unit | $ | 0.5700 | $ | 0.5700 | ||||
Distributions paid as a % of funds from operations | 120 | % | 124 | % |
(1) | Excludes (i) new acquisitions, through the earlier of attainment of 90% occupancy or 18 months of ownership, and (ii) properties that are undergoing significant redevelopment or re-tenanting. |
(2) | For a reconciliation of funds from operations to net income, see "Funds From Operations" below. |
(3) | For a reconciliation of property net operating income to net income, see "Property Net Operating Income" below. |
Six Months Ended June 30, | |||||||||||||||
Overall Property Expenses | 2013 | 2012 | Change | % Change | |||||||||||
Real estate taxes | $ | 3,810 | $ | 2,813 | $ | 997 | 35 | % | |||||||
Utilities | 1,623 | 1,389 | 234 | 17 | % | ||||||||||
Contract services | 1,715 | 1,302 | 413 | 32 | % | ||||||||||
Repairs and maintenance | 893 | 859 | 34 | 4 | % | ||||||||||
Bad debt | 715 | 358 | 357 | 100 | % | ||||||||||
Labor and other | 1,467 | 1,203 | 264 | 22 | % | ||||||||||
Total property expenses | $ | 10,223 | $ | 7,924 | $ | 2,299 | 29 | % |
Six Months Ended June 30, | |||||||||||||||
Same Store Property Expenses | 2013 | 2012 | Change | % Change | |||||||||||
Real estate taxes | $ | 2,783 | $ | 2,815 | $ | (32 | ) | (1 | )% | ||||||
Utilities | 1,353 | 1,386 | (33 | ) | (2 | )% | |||||||||
Contract services | 1,275 | 1,300 | (25 | ) | (2 | )% | |||||||||
Repairs and maintenance | 739 | 787 | (48 | ) | (6 | )% | |||||||||
Bad debt | 540 | 352 | 188 | 53 | % | ||||||||||
Labor and other | 1,172 | 1,196 | (24 | ) | (2 | )% | |||||||||
Total property expenses | $ | 7,862 | $ | 7,836 | $ | 26 | — |
Six Months Ended June 30, | ||||||||||||||
New Store Property Expenses | 2013 | 2012 | Change | % Change | ||||||||||
Real estate taxes | $ | 1,027 | $ | (2 | ) | $ | 1,029 | Not meaningful | ||||||
Utilities | 270 | 3 | 267 | Not meaningful | ||||||||||
Contract services | 440 | 2 | 438 | Not meaningful | ||||||||||
Repairs and maintenance | 154 | 72 | 82 | Not meaningful | ||||||||||
Bad debt | 175 | 6 | 169 | Not meaningful | ||||||||||
Labor and other | 295 | 7 | 288 | Not meaningful | ||||||||||
Total property expenses | $ | 2,361 | $ | 88 | $ | 2,273 | Not meaningful |
Six Months Ended June 30, | ||||||||||||||||||||||||
Same Store | New Store | Total | ||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
Property revenues | $ | 21,540 | $ | 21,282 | $ | 7,124 | $ | 131 | $ | 28,664 | $ | 21,413 | ||||||||||||
Property expenses | 7,862 | 7,836 | 2,361 | 88 | 10,223 | 7,924 | ||||||||||||||||||
Property net operating income | $ | 13,678 | $ | 13,446 | $ | 4,763 | $ | 43 | $ | 18,441 | $ | 13,489 |
Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | Change | % Change | ||||||||||||
General and administrative | $ | 4,960 | $ | 3,504 | $ | 1,456 | 42 | % | |||||||
Depreciation and amortization | 6,333 | 4,573 | 1,760 | 38 | % | ||||||||||
Interest expense | 5,062 | 4,080 | 982 | 24 | % | ||||||||||
Interest, dividend and other investment income | (88 | ) | (153 | ) | 65 | 42 | % | ||||||||
Total other expenses | $ | 16,267 | $ | 12,004 | $ | 4,263 | 36 | % |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
FFO AND FFO CORE | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Net income attributable to Whitestone REIT | $ | 970 | $ | 431 | $ | 1,919 | $ | 1,224 | ||||||||
Depreciation and amortization of real estate assets | 3,239 | 2,254 | 6,289 | 4,503 | ||||||||||||
Loss on sale or disposal of assets | 40 | 16 | 48 | 28 | ||||||||||||
Net income attributable to noncontrolling interests | 33 | 31 | 70 | 98 | ||||||||||||
FFO | 4,282 | 2,732 | 8,326 | 5,853 | ||||||||||||
Acquisition costs | 344 | 130 | 482 | 194 | ||||||||||||
Legal settlement | — | — | — | (131 | ) | |||||||||||
FFO Core | $ | 4,626 | $ | 2,862 | $ | 8,808 | $ | 5,916 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
PROPERTY NET OPERATING INCOME | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Net income attributable to Whitestone REIT | $ | 970 | $ | 431 | $ | 1,919 | $ | 1,224 | ||||||||
General and administrative expenses | 2,516 | 1,863 | 4,960 | 3,504 | ||||||||||||
Depreciation and amortization | 3,260 | 2,290 | 6,333 | 4,573 | ||||||||||||
Interest expense | 2,613 | 2,107 | 5,062 | 4,080 | ||||||||||||
Interest, dividend and other investment income | (69 | ) | (83 | ) | (88 | ) | (153 | ) | ||||||||
Provision for income taxes | 72 | 70 | 137 | 135 | ||||||||||||
Loss on disposal of assets | 40 | 16 | 48 | 28 | ||||||||||||
Net income attributable to noncontrolling interests | 33 | 31 | 70 | 98 | ||||||||||||
NOI | $ | 9,435 | $ | 6,725 | $ | 18,441 | $ | 13,489 |
• | Cash flow from operations of $8,280,000 for the six months ended June 30, 2013; |
• | Net proceeds of $58,400,000 from the Facility, net of origination costs; |
• | Proceeds from notes payable of $20,200,000; |
• | Proceeds from sales of marketable securities of $747,000; |
• | Payment of distributions to common shareholders and OP unit holders of $10,002,000; |
• | Acquisitions of real estate of $58,403,000; |
• | Additions to real estate of $2,476,000; |
• | Payments of notes payable of $15,844,000; and |
• | Payments of loan origination costs of $1,403,000. |
Description | June 30, 2013 | December 31, 2012 | ||||||
Fixed rate notes | ||||||||
$1.1 million 4.71% Note, due 2013 | $ | 1,087 | $ | 1,087 | ||||
$20.2 million 4.2805% Note, due 2023 (1) | 20,200 | 13,850 | ||||||
$3.0 million 6.00% Note, due 2021 (2) | 2,924 | 2,943 | ||||||
$10.0 million 6.04% Note, due 2014 | 9,047 | 9,142 | ||||||
$1.5 million 6.50% Note, due 2014 | 1,430 | 1,444 | ||||||
$11.2 million 6.52% Note, due 2015 | 10,528 | 10,609 | ||||||
$21.4 million 6.53% Notes, due 2013 | 18,530 | 18,865 | ||||||
$24.5 million 6.56% Note, due 2013 | 22,892 | 23,135 | ||||||
$9.9 million 6.63% Notes, due 2014 | 8,758 | 8,925 | ||||||
$9.2 million, Prime Rate less 2.00%, due 2017 (3) | 7,868 | 7,854 | ||||||
$11.1 million 5.87% Note, due 2016 | 12,031 | — | ||||||
$0.9 million 2.97% Note, due 2013 | 387 | 15 | ||||||
Floating rate notes | ||||||||
Unsecured credit facility, LIBOR plus 1.75% to 2.50%, due 2017 (4) | 127,400 | 69,000 | ||||||
$26.9 million, LIBOR plus 2.86% Note, due 2013 | 23,319 | 23,739 | ||||||
$ | 266,401 | $ | 190,608 |
(1) | Promissory note had an original balance of $14.1 million and an interest rate of 5.695%, due in 2013, which was refinanced in May 2013. See below for further discussion of Pinnacle Note. |
(2) | The 6.00% interest rate is fixed through March 30, 2016. On March 31, 2016 the interest rate will reset to the rate of interest for a five-year balloon note with a thirty-year amortization as published by the Federal Home Loan Bank. |
(3) | Promissory note includes an interest rate swap that fixed the interest rate at 5.72% for the duration of the term. |
(4) | We have entered into an interest rate swap that fixed the LIBOR portion of our $50 million term loan under the Facility at 0.84%. The swap will begin on January 7, 2014 and will mature on February 3, 2017. |
Year | Amount Due | |||
2013 | $ | 66,708 | ||
2014 | 19,453 | |||
2015 | 10,786 | |||
2016 | 11,725 | |||
2017 | 135,689 | |||
Thereafter | 22,040 | |||
Total | $ | 266,401 |
Common Shares (1) | Noncontrolling OP Unit Holders | Total | ||||||||||||||||||
Quarter Paid | Distributions Per Common Share | Total Amount Paid | Distributions Per OP Unit | Total Amount Paid | Total Amount Paid | |||||||||||||||
2013 | ||||||||||||||||||||
Second Quarter | $ | 0.2850 | $ | 4,832 | $ | 0.2850 | $ | 169 | $ | 5,001 | ||||||||||
First Quarter | 0.2850 | 4,807 | 0.2850 | 194 | 5,001 | |||||||||||||||
Total | $ | 0.5700 | $ | 9,639 | $ | 0.5700 | $ | 363 | $ | 10,002 | ||||||||||
2012 | ||||||||||||||||||||
Fourth Quarter | $ | 0.2850 | $ | 4,781 | $ | 0.2850 | $ | 221 | $ | 5,002 | ||||||||||
Third Quarter | 0.2850 | 3,859 | 0.2850 | 224 | 4,083 | |||||||||||||||
Second Quarter | 0.2850 | 3,362 | 0.2850 | 258 | 3,620 | |||||||||||||||
First Quarter | 0.2850 | 3,322 | 0.2850 | 301 | 3,623 | |||||||||||||||
Total | $ | 1.1400 | $ | 15,324 | $ | 1.1400 | $ | 1,004 | $ | 16,328 |
(1) | Effective June 27, 2012, each outstanding Class A common share was reclassified into one Class B common share, and the Class B common shares were redesignated as "common shares." See Note 10 to the accompanying consolidated financial statements. |
(a) | During the period covered by this Form 10-Q, we did not sell any equity securities that were not registered under the Securities Act of 1933. |
(b) | Not applicable. |
(c) | Not applicable. |
WHITESTONE REIT | ||||
Date: | August 6, 2013 | /s/ James C. Mastandrea | ||
James C. Mastandrea | ||||
Chief Executive Officer | ||||
(Principal Executive Officer) |
Date: | August 6, 2013 | /s/ David K. Holeman | ||
David K. Holeman | ||||
Chief Financial Officer | ||||
(Principal Financial and Principal Accounting Officer) |
EXHIBIT INDEX |
Exhibit No. | Description |
3.1.1 | Articles of Amendment and Restatement of Declaration of Trust (previously filed as and incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K, filed on July 31, 2008) |
3.1.2 | Articles Supplementary (previously filed as and incorporated by reference to Exhibit 3(i).1 to the Registrant's Current Report on Form 8-K, filed on December 6, 2006) |
3.1.3 | Articles of Amendment (previously filed as and incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K, filed on August 24, 2010) |
3.1.4 | Articles of Amendment (previously filed as and incorporated by reference to Exhibit 3.2 to the Registrant's Current Report on Form 8-K, filed on August 24, 2010) |
3.1.5 | Articles Supplementary (previously filed as and incorporated by reference to Exhibit 3.3 to the Registrant's Current Report on Form 8-K, filed on August 24, 2010) |
3.1.6 | Articles of Amendment (previously filed as and incorporated by reference to Exhibit 3.1.1 to the Registrant's Current Report on Form 8-K, filed on June 27, 2012) |
3.1.7 | Articles of Amendment (previously filed as and incorporated by reference to Exhibit 3.1.2 to Registrant's Current Report on Form 8-K, filed on June 27, 2012) |
3.2 | Amended and Restated Bylaws (previously filed as and incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K, filed on October 9, 2008) |
12* | Statement of Calculation of Consolidated Ratio of Earnings to Fixed Charges. |
31.1* | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2* | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1** | Certificate of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
32.2** | Certificate of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
101.INS*** | XBRL Instance Document |
101. SCH*** | XBRL Taxonomy Extension Schema Document |
101.CAL*** | XBRL Taxonomy Extension Calculation Linkbase Document |
101.LAB*** | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE*** | XBRL Taxonomy Extension Presentation Linkbase Document |
101.DEF*** | XBRL Taxonomy Extension Definition Linkbase Document |
Six Months | ||||||||||||||||
Ended June 30, | Year Ended December 31, | |||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||
Earnings | ||||||||||||||||
Income from continuing operations | $ | 1,989 | $ | 53 | $ | 1,333 | $ | 1,575 | $ | 2,075 | ||||||
Plus: Taxes | 137 | 286 | 225 | 264 | 222 | |||||||||||
Plus: Fixed charges | 5,062 | 8,732 | 6,344 | 6,040 | 6,190 | |||||||||||
Total earnings | $ | 7,188 | $ | 9,071 | $ | 7,902 | $ | 7,879 | $ | 8,487 | ||||||
Fixed charges | ||||||||||||||||
Interest expense | 5,062 | 8,732 | 6,344 | 6,040 | 6,190 | |||||||||||
Total fixed charges | $ | 5,062 | $ | 8,732 | $ | 6,344 | $ | 6,040 | $ | 6,190 | ||||||
Ratio of earnings to fixed charges | 1.42 | 1.04 | 1.25 | 1.30 | 1.37 |
1. | I have reviewed this quarterly report on Form 10-Q, for the period ended June 30, 2013, of Whitestone REIT; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
1. | I have reviewed this quarterly report on Form 10-Q, for the period ended June 30, 2013, of Whitestone REIT; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ James C. Mastandrea |
James C. Mastandrea |
Chairman and Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ David K. Holeman |
David K. Holeman |
Chief Financial Officer |
Incentive Share Plan
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Jun. 30, 2013
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Incentive Share Plan | INCENTIVE SHARE PLAN On July 29, 2008, our shareholders approved the 2008 Plan. On December 22, 2010, our board of trustees amended the 2008 Plan to allow for awards in or related to Class B common shares pursuant to the 2008 Plan. On June 27, 2012, our Class B common shares were redesignated as "common shares." The 2008 Plan, as amended, provides that awards may be made with respect to common shares of Whitestone or OP units, which may be converted into cash or, at our option, common shares of Whitestone. The maximum aggregate number of common shares that may be issued under the 2008 Plan is increased upon each issuance of common shares by Whitestone so that at any time the maximum number of shares that may be issued under the 2008 Plan shall equal 12.5% of the aggregate number of common shares of Whitestone and OP units issued and outstanding (other than shares and/or OP units issued to or held by Whitestone). The Compensation Committee of our board of trustees administers the 2008 Plan, except with respect to awards to non-employee trustees, for which the 2008 Plan is administered by our board of trustees. The Compensation Committee is authorized to grant share options, including both incentive share options and non-qualified share options, as well as share appreciation rights, either with or without a related option. The Compensation Committee is also authorized to grant restricted common shares, restricted common share units, performance awards and other share-based awards. A summary of the share-based incentive plan activity as of and for the six months ended June 30, 2013 is as follows:
A summary of our non-vested and vested shares activity for the six months ended June 30, 2013 and years ended December 31, 2012, 2011 and 2010 is presented below:
Total compensation recognized in earnings for share-based payments was $311,000 and $188,000 for the three months ended June 30, 2013 and 2012, respectively, and $667,000 and $266,000 for the six months ended June 30, 2013 and 2012, respectively. Taking into account the acquisitions that occurred during the six months ended June 30, 2013 and the year ended December 31, 2012 (see Note 14), we expect additional performance-based shares to vest due to the achievement of certain Company-wide performance goals. As a result, as of June 30, 2013, there was approximately $2,025,000 in unrecognized compensation cost related to outstanding non-vested performance-based shares, which is expected to vest over a weighted average period of 14 months and approximately $11,000 in unrecognized compensation cost related to outstanding non-vested time-based shares, which is expected to be recognized over a weighted average period of approximately six months. |
Accrued Rents and Accounts Receivable, Net
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Jun. 30, 2013
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Rent and Accounts Receivable, Net | ACCRUED RENTS AND ACCOUNTS RECEIVABLE, NET Accrued rents and accounts receivable, net consists of amounts accrued, billed and due from tenants, allowance for doubtful accounts and other receivables as follows (in thousands):
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Unamortized Leasing Commissions and Loan Costs (Tables)
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Jun. 30, 2013
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Unamortized Leasing Comissions and Loan Costs | Costs which have been deferred consist of the following (in thousands):
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Grants to Trustees
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6 Months Ended |
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Jun. 30, 2013
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Grants to Trustees [Abstract] | |
Grants To Trustees | GRANTS TO TRUSTEES On May 22, 2012, each of our four independent trustees was granted 1,500 common shares, which vested immediately. The 6,000 common shares granted to our four independent trustees had a grant date fair value of $13.03 per share. On June 25, 2012, two of our independent trustees elected to receive a total of 915 common shares with a grant date fair value of $13.39 in lieu of cash for board fees. The fair value of the shares granted during the six months ended June 30, 2013 was determined using quoted prices available on the date of grant. |
Income Taxes (Details) (USD $)
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12 Months Ended | 3 Months Ended | 6 Months Ended | |||
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Apr. 27, 2010
|
Dec. 31, 2010
Internal Revenue Service (IRS) [Member]
|
Jun. 30, 2013
Texas [Member]
|
Jun. 30, 2012
Texas [Member]
|
Jun. 30, 2013
Texas [Member]
|
Jun. 30, 2012
Texas [Member]
|
|
Income Taxes [Line Items] | ||||||
Minimum amount of tax penalty | $ 50,000 | |||||
Minimum amount of tax penalty, percentage | 35.00% | |||||
Tax paid as a result of violation of 5% asset test | 50,000 | |||||
Applicable tax rate used to determine state margin tax | 1.00% | |||||
Standard deduction rate used to determine state margin tax | 30.00% | |||||
Margin tax provision recognized | $ 64,000 | $ 65,000 | $ 124,000 | $ 123,000 |
Equity (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Distributions | The following table summarizes the cash distributions paid or payable to holders of common shares and to holders of noncontrolling OP units during each quarter during 2012 and the six months ended June 30, 2013 (in thousands, except per share/unit data):
|
Earnings (Loss) Per Share (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share |
|
Debt (Schedule of Debt) (Details) (USD $)
|
6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Dec. 31, 2012
|
Jun. 30, 2013
Fixed Rate Notes [Member]
Four Point Seven One Percent Note Due 2013 [Member]
|
Dec. 31, 2012
Fixed Rate Notes [Member]
Four Point Seven One Percent Note Due 2013 [Member]
|
Jun. 30, 2013
Fixed Rate Notes [Member]
Four Point Two Eight Zero Five Percent Note Due 2023 [Member]
|
Dec. 31, 2012
Fixed Rate Notes [Member]
Four Point Two Eight Zero Five Percent Note Due 2023 [Member]
|
Jun. 30, 2013
Fixed Rate Notes [Member]
Six Point Zero Zero Percent Note Due 2021 [Member]
|
Mar. 31, 2013
Fixed Rate Notes [Member]
Six Point Zero Zero Percent Note Due 2021 [Member]
|
Dec. 31, 2012
Fixed Rate Notes [Member]
Six Point Zero Zero Percent Note Due 2021 [Member]
|
Jun. 30, 2013
Fixed Rate Notes [Member]
Six Point Zero Four Percent Note Due 2014 [Member]
|
Dec. 31, 2012
Fixed Rate Notes [Member]
Six Point Zero Four Percent Note Due 2014 [Member]
|
Jun. 30, 2013
Fixed Rate Notes [Member]
Six Point Five Zero Percent Note Due 2014 [Member]
|
Dec. 31, 2012
Fixed Rate Notes [Member]
Six Point Five Zero Percent Note Due 2014 [Member]
|
Jun. 30, 2013
Fixed Rate Notes [Member]
Six Point Five Two Percent Note Due 2015 [Member]
|
Dec. 31, 2012
Fixed Rate Notes [Member]
Six Point Five Two Percent Note Due 2015 [Member]
|
Jun. 30, 2013
Fixed Rate Notes [Member]
Six Point Five Three Percent Notes Due 2013 [Member]
|
Dec. 31, 2012
Fixed Rate Notes [Member]
Six Point Five Three Percent Notes Due 2013 [Member]
|
Jun. 30, 2013
Fixed Rate Notes [Member]
Six Point Five Six Percent Note Due 2013 [Member]
|
Dec. 31, 2012
Fixed Rate Notes [Member]
Six Point Five Six Percent Note Due 2013 [Member]
|
Jun. 30, 2013
Fixed Rate Notes [Member]
Six Point Six Three Percent Notes Due 2014 [Member]
|
Dec. 31, 2012
Fixed Rate Notes [Member]
Six Point Six Three Percent Notes Due 2014 [Member]
|
Jun. 30, 2013
Fixed Rate Notes [Member]
Prime Rate Less Two Point Zero Zero Percent Due 2017 [Member]
|
Dec. 31, 2012
Fixed Rate Notes [Member]
Prime Rate Less Two Point Zero Zero Percent Due 2017 [Member]
|
Jun. 30, 2013
Fixed Rate Notes [Member]
Five Point Eight Seven Percent Note Due 2016 [Member]
|
Dec. 31, 2012
Fixed Rate Notes [Member]
Five Point Eight Seven Percent Note Due 2016 [Member]
|
Jun. 30, 2013
Fixed Rate Notes [Member]
Two Point Nine Seven Percent Notes Due 2012 [Member]
|
Dec. 31, 2012
Fixed Rate Notes [Member]
Two Point Nine Seven Percent Notes Due 2012 [Member]
|
May 31, 2013
Fixed Rate Notes [Member]
Five Point Six Nine Five Percent Note Due 2013 [Member]
|
Jun. 30, 2013
Floating Rate Notes [Member]
LIBOR Plus Two Point Seven Five Percent to Three Point Seven Five Percent Unsecured Line of Credit Due 2017 [Member]
|
Dec. 31, 2012
Floating Rate Notes [Member]
LIBOR Plus Two Point Seven Five Percent to Three Point Seven Five Percent Unsecured Line of Credit Due 2017 [Member]
|
Jun. 30, 2013
Floating Rate Notes [Member]
LIBOR Plus Two Point Eight Six Percent Note Due 2013 [Member]
|
Dec. 31, 2012
Floating Rate Notes [Member]
LIBOR Plus Two Point Eight Six Percent Note Due 2013 [Member]
|
Jun. 30, 2013
Term Loan [Member]
|
Mar. 31, 2013
Term Loan [Member]
|
Jun. 30, 2013
Interest Rate Swap [Member]
Prime Rate Less Two Point Zero Zero Percent Due 2017 [Member]
|
Jun. 30, 2013
Minimum [Member]
Floating Rate Notes [Member]
LIBOR Plus Two Point Seven Five Percent to Three Point Seven Five Percent Unsecured Line of Credit Due 2017 [Member]
|
Dec. 31, 2012
Minimum [Member]
Floating Rate Notes [Member]
LIBOR Plus Two Point Seven Five Percent to Three Point Seven Five Percent Unsecured Line of Credit Due 2017 [Member]
|
Jun. 30, 2013
Maximum [Member]
Floating Rate Notes [Member]
LIBOR Plus Two Point Seven Five Percent to Three Point Seven Five Percent Unsecured Line of Credit Due 2017 [Member]
|
Dec. 31, 2012
Maximum [Member]
Floating Rate Notes [Member]
LIBOR Plus Two Point Seven Five Percent to Three Point Seven Five Percent Unsecured Line of Credit Due 2017 [Member]
|
|||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable | $ 266,401,000 | $ 190,608,000 | $ 1,087,000 | $ 1,087,000 | $ 20,200,000 | [1] | $ 13,850,000 | [1] | $ 2,924,000 | [2] | $ 2,943,000 | [2] | $ 9,047,000 | $ 9,142,000 | $ 1,430,000 | $ 1,444,000 | $ 10,528,000 | $ 10,609,000 | $ 18,530,000 | $ 18,865,000 | $ 22,892,000 | $ 23,135,000 | $ 8,758,000 | $ 8,925,000 | $ 7,868,000 | [3] | $ 7,854,000 | [3] | $ 12,031,000 | $ 0 | $ 387,000 | $ 15,000 | $ 127,400,000 | [4] | $ 69,000,000 | [4] | $ 23,319,000 | $ 23,739,000 | |||||||||||||||||||||
Stated interest rate | 4.71% | 4.71% | 4.2805% | [1] | 4.2805% | [1] | 6.00% | [2] | 6.00% | 6.00% | [2] | 6.04% | 6.04% | 6.50% | 6.50% | 6.52% | 6.52% | 6.53% | 6.53% | 6.56% | 6.56% | 6.63% | 6.63% | 5.87% | 5.87% | 2.97% | 2.97% | 5.695% | 0.84% | 5.72% | |||||||||||||||||||||||||||||
Face amount of debt | $ 1,100,000 | $ 1,100,000 | $ 20,200,000 | [1] | $ 20,200,000 | [1] | $ 3,000,000 | [2] | $ 3,000,000 | [2] | $ 10,000,000 | $ 10,000,000 | $ 1,500,000 | $ 1,500,000 | $ 11,200,000 | $ 11,200,000 | $ 21,400,000 | $ 21,400,000 | $ 24,500,000 | $ 24,500,000 | $ 9,900,000 | $ 9,900,000 | $ 9,200,000 | [3] | $ 9,200,000 | [3] | $ 0 | $ 0 | $ 0 | $ 0 | $ 14,100,000 | $ 0 | $ 26,900,000 | $ 50,000,000 | $ 50,000,000 | ||||||||||||||||||||||||
Description of variable rate basis | Prime | [3] | Prime | [3] | LIBOR | [4] | LIBOR | [4] | LIBOR | LIBOR | |||||||||||||||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 2.00% | [3] | 2.00% | [3] | 2.86% | 2.86% | 1.75% | [4] | 1.75% | [4] | 2.50% | [4] | 2.50% | [4] | |||||||||||||||||||||||||||||||||||||||||||||
Term of balloon note after interest rate reset | 5 years | 5 years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Term of amortization on balloon note after interest rate reset | 30 years | 30 years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Equity (Details) (USD $)
|
0 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 1 Months Ended | 1 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 28, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 19, 2013
|
Dec. 31, 2012
|
Jun. 27, 2012
|
Jun. 27, 2012
Preferred Stock [Member]
|
Jun. 30, 2013
OP Units [Member]
|
Jun. 30, 2012
OP Units [Member]
|
Jun. 30, 2013
Third Exchange Offer [Member]
Common Stock [Member]
|
Jun. 30, 2013
Third Exchange Offer [Member]
Common Stock [Member]
|
Jun. 08, 2012
Third Exchange Offer [Member]
Common Class A [Member]
|
May 10, 2012
Third Exchange Offer [Member]
Common Class A [Member]
|
May 10, 2012
Third Exchange Offer [Member]
Common Class B [Member]
|
Jun. 08, 2012
Third Exchange Offer [Member]
OP Units [Member]
|
Jun. 30, 2013
Third Exchange Offer [Member]
OP Units [Member]
|
Jun. 30, 2012
Third Exchange Offer [Member]
OP Units [Member]
|
Jun. 30, 2013
Third Exchange Offer [Member]
OP Units [Member]
|
Jun. 30, 2012
Third Exchange Offer [Member]
OP Units [Member]
|
May 10, 2012
Third Exchange Offer [Member]
OP Units [Member]
|
Jun. 30, 2013
Cash Distribution [Member]
|
Mar. 31, 2013
Cash Distribution [Member]
|
Dec. 31, 2012
Cash Distribution [Member]
|
Sep. 30, 2012
Cash Distribution [Member]
|
Jun. 30, 2012
Cash Distribution [Member]
|
Mar. 31, 2012
Cash Distribution [Member]
|
Jun. 30, 2013
Cash Distribution [Member]
|
Dec. 31, 2012
Cash Distribution [Member]
|
Jun. 30, 2013
Cash Distribution [Member]
Common Stock [Member]
|
Mar. 31, 2013
Cash Distribution [Member]
Common Stock [Member]
|
Dec. 31, 2012
Cash Distribution [Member]
Common Stock [Member]
|
Sep. 30, 2012
Cash Distribution [Member]
Common Stock [Member]
|
Jun. 30, 2012
Cash Distribution [Member]
Common Stock [Member]
|
Mar. 31, 2012
Cash Distribution [Member]
Common Stock [Member]
|
Jun. 30, 2013
Cash Distribution [Member]
Common Class A [Member]
|
Dec. 31, 2012
Cash Distribution [Member]
Common Class A [Member]
|
Jun. 30, 2013
Cash Distribution [Member]
OP Units [Member]
|
Mar. 31, 2013
Cash Distribution [Member]
OP Units [Member]
|
Dec. 31, 2012
Cash Distribution [Member]
OP Units [Member]
|
Sep. 30, 2012
Cash Distribution [Member]
OP Units [Member]
|
Jun. 30, 2012
Cash Distribution [Member]
OP Units [Member]
|
Mar. 31, 2012
Cash Distribution [Member]
OP Units [Member]
|
Jun. 30, 2013
Cash Distribution [Member]
OP Units [Member]
|
Dec. 31, 2012
Cash Distribution [Member]
OP Units [Member]
|
Aug. 28, 2012
Portion Attributable to Over-Allotment Option [Member]
|
Jun. 27, 2012
Common Class B [Member]
|
Jun. 27, 2012
Common Class A [Member]
|
|||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common shares, authorized (in shares) | 400,000,000 | 400,000,000 | 400,000,000 | 400,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common shares, par value per share (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred shares, shares authorized (in shares) | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred shares, par value per share (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity distribution agreements, authorized amount | $ 50,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common shares, issued (in shares) | 4,830,000 | 17,052,980 | 17,052,980 | 16,943,098 | 630,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share price of equity offering | $ 12.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from issuance of common shares | 58,700,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ownership interest in operating partnership | 96.70% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion basis for common shares to OP units | 1 | 1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OP units outstanding (in shares) | 17,512,003 | 17,507,771 | 453,642 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OP units owned (in shares) | 16,932,121 | 16,822,285 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted-average share ownership in operating partnership | 96.70% | 93.00% | 96.50% | 92.60% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash distribution paid (in dollars per share) | $ 0.285 | [1] | $ 0.285 | [1] | $ 0.2850 | [1] | $ 0.2850 | [1] | $ 0.2850 | [1] | $ 0.2850 | [1] | $ 0.57 | [1] | $ 1.14 | [1] | $ 0.285 | $ 0.285 | $ 0.2850 | $ 0.2850 | $ 0.2850 | $ 0.2850 | $ 0.57 | $ 1.14 | |||||||||||||||||||||||||||||||||||
Cash distribution paid | $ 5,001,000 | $ 5,001,000 | $ 5,002,000 | $ 4,083,000 | $ 3,620,000 | $ 3,623,000 | $ 10,002,000 | $ 16,328,000 | $ 4,832,000 | [1] | $ 4,807,000 | [1] | $ 4,781,000 | [1] | $ 3,859,000 | [1] | $ 3,362,000 | [1] | $ 3,322,000 | [1] | $ 9,639,000 | [1] | $ 15,324,000 | [1] | $ 169,000 | $ 194,000 | $ 221,000 | $ 224,000 | $ 258,000 | $ 301,000 | $ 363,000 | $ 1,004,000 | |||||||||||||||||||||||||||
Common stock exchange offer, conversion basis for one share or unit (in shares) | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common shares, outstanding (in shares) | 17,052,980 | 17,052,980 | 16,943,098 | 867,789 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of stock, shares converted (in shares) | 27,175 | 105,604 | 426,986 | 121,156 | 27,175 | 0 | 105,604 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||
|
Marketable Securities (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Mar. 31, 2013
|
Dec. 31, 2012
|
|
Schedule of Available-for-sale Securities [Line Items] | ||||||
Amortized Cost | $ 1,106 | $ 1,811 | ||||
Gains in Accumulated Other Comprehensive Income | 0 | 0 | ||||
Losses in Accumulated Other Comprehensive Income | (194) | (408) | ||||
Estimated Fair Value | 912 | 1,403 | ||||
Proceeds from sales of marketable securities | 747 | 1,312 | 747 | 3,926 | ||
Gross realized gains on sale of marketable securities | 44 | 34 | 74 | |||
Gross realized losses on sale of marketable securities | (3) | (3) | (42) | |||
Real Estate Common Stock [Member]
|
||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Amortized Cost | 1,106 | 1,106 | 1,811 | |||
Gains in Accumulated Other Comprehensive Income | 0 | 0 | 0 | |||
Losses in Accumulated Other Comprehensive Income | (194) | (194) | (408) | |||
Estimated Fair Value | $ 912 | $ 912 | $ 1,403 |
Incentive Share Plan (Schedule of Nonvested and Vested Shares Activity) (Details) (2008 Long-Term Equity Incentive Ownership Plan [Member], USD $)
In Thousands, except Share data, unless otherwise specified |
6 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
||||
2008 Long-Term Equity Incentive Ownership Plan [Member]
|
|||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares, Granted, Non-Vested Shares Isused (in shares) | 0 | 99,700 | 0 | 31,858 | |||
Shares Granted, Weighted-Average Grant Date Fair Value, Granted (in dollars per share) | $ 0.00 | [1] | $ 13.03 | $ 0.00 | $ 14.09 | ||
Shares, Vested (in shares) | (4,465) | (16,208) | (5,169) | (55,699) | |||
Shares Vested, Total Vest-Date Fair Value | $ 69 | $ 223 | $ 80 | $ 695 | |||
|
Debt (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Debt consisted of the following as of the dates indicated (in thousands):
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Schedule of Maturities of Debt | Scheduled maturities of our outstanding debt as of June 30, 2013 were as follows (in thousands):
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Summary of Significant Accounting Policies
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6 Months Ended |
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Jun. 30, 2013
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Accounting Policies [Abstract] | |
Significant Accounting Policies | 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 June 30, 2013 and December 31, 2012, 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. All significant inter-company balances have been eliminated. Noncontrolling interests 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 ownership interests of both the noncontrolling interests and Whitestone. Basis of Accounting. Our financial records are maintained on the accrual basis of accounting whereby revenues are recognized when earned and expenses are recorded when incurred. Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates that we use include the estimated fair values of properties acquired, the estimated useful lives for depreciable and amortizable assets and costs, the estimated allowance for doubtful accounts, the estimated fair value of interest rate swaps and the estimates supporting our impairment analysis for the carrying values of our real estate assets. Actual results could differ from those estimates. Reclassifications. We have reclassified certain prior period amounts in the accompanying consolidated financial statements in order to be consistent with the current period presentation. These reclassifications had no effect on net income, total assets, total liabilities or equity. During 2012, we reclassified the amortization of our loan fees, previously classified as depreciation and amortization expenses, to interest expense for all periods presented. As of June 27, 2012, prior period Class A and Class B common shares have been consolidated into a single class of common shares. See Note 10 for additional discussion related to the reclassification of our Class A and Class B common shares. Marketable Securities. We classify our existing marketable equity securities as available-for-sale in accordance with the Financial Accounting Standards Board's ("FASB") Investments-Debt and Equity Securities guidance. These securities are carried at fair value with unrealized gains and losses reported in equity as a component of accumulated other comprehensive income or loss. The fair value of the marketable securities is determined using Level 1 inputs under FASB Accounting Standards Codification ("ASC") 820, "Fair Value Measurements and Disclosures." Level 1 inputs represent quoted prices available in an active market for identical investments as of the reporting date. Gains and losses on securities sold are based on the specific identification method, and are reported as a component of interest, dividend and other investment income. We recognized gains on the sale of marketable securities of approximately $41,000 and $31,000 for the three months ended June 30, 2013 and 2012, respectively, and $41,000 and $32,000 for the six months ended June 30, 2013 and 2012, respectively. As of June 30, 2013, our investment in available-for-sale marketable securities was approximately $912,000, which includes an aggregate unrealized loss of approximately $194,000. Derivative Instruments and Hedging Activities. On March 8, 2013, we, through our Operating Partnership, entered into an interest rate swap with U.S. Bank National Association that fixed the LIBOR portion of our $50 million term loan under our unsecured credit facility at 0.84%. See Note 6 for additional information regarding our credit facility. The swap will begin on January 7, 2014 and will mature on February 3, 2017. We have designated the interest rate swap as a cash flow hedge with the effective portion of the changes in fair value to be recorded in comprehensive income (loss) and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. The ineffective portion of the change in fair value, if any, will be recognized directly in earnings. As of June 30, 2013, the fair value of our cash flow hedge was $0.3 million. For the three and six months ended June 30, 2013, we recognized $582,000 and $325,000 as other comprehensive gains, respectively. For the three and six months ended June 30, 2013, we did not recognize any portion of the cash flow hedge into earnings because we are not required to make cash settlements until 2014. On August 8, 2012, as part of our acquisition of Paradise Plaza (see Note 14), we assumed a $9.2 million variable rate note (see Note 6). The note included an interest rate swap that had a fixed interest rate of 5.72%. We have designated the interest rate swap as a cash flow hedge 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. The ineffective portion of the change in fair value, if any, is recognized directly in earnings. As of June 30, 2013, the fair value of our cash flow hedge was $1.4 million. For the three and six months ended June 30, 2013, we recognized $179,000 and $168,000 as other comprehensive gains, respectively. For the three and six months ended June 30, 2013, we recognized $88,000 and $176,000 as interest expense, respectively. As of June 30, 2013, we consider our cash flow hedges to be highly effective. Our cash flow hedges are determined using Level 2 inputs under ASC 820. 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 whose inputs are observable. Development Properties. Land, buildings and improvements are recorded at cost. Expenditures related to the development of real estate are carried at cost which includes capitalized carrying charges and development costs. Carrying charges, primarily interest, real estate taxes, loan fees, and direct and indirect development costs related to buildings under construction, are capitalized as part of construction in progress. The capitalization of such costs ceases when the property, or any completed portion, becomes available for occupancy. For the three months ended June 30, 2013, approximately $33,000 and $25,000 in interest expense and real estate taxes, respectively, were capitalized, and for the six months ended June 30, 2013, approximately $69,000 and $49,000 in interest expense and real estate taxes, respectively, were capitalized. For the three months ended June 30, 2012, approximately $44,000 and $31,000 in interest expense and real estate taxes, respectively, were capitalized, and for the six months ended June 30, 2012, approximately $88,000 and $63,000 in interest and real estate taxes, respectively, were capitalized. Share-Based Compensation. From time to time, we award nonvested restricted common share awards or restricted common share unit awards, which may be converted into common shares, to executive officers and employees under our 2008 Long-Term Equity Incentive Ownership Plan (the “2008 Plan”). The vast majority of the awarded shares and units vest when certain performance conditions are met. We recognize compensation expense when achievement of the performance conditions is probable based on management's most recent estimates using the fair value of the shares as of the grant date. We recognized $311,000 and $188,000 in share-based compensation for the three months ended June 30, 2013 and 2012, respectively, and we recognized $667,000 and $266,000 in share-based compensation for the six months ended June 30, 2013 and 2012, respectively. Noncontrolling Interests. Noncontrolling interests is the portion of equity in a subsidiary not attributable to a parent. The ownership interests not held by the parent are considered noncontrolling interests. Accordingly, we have reported noncontrolling interests in equity on the consolidated balance sheets but separate from Whitestone's equity. On the consolidated statements of operations, subsidiaries are reported at the consolidated amount, including both the amount attributable to Whitestone and noncontrolling interests. The consolidated statement of changes in equity is included for quarterly financial statements, including beginning balances, activity for the period and ending balances for shareholders' equity, noncontrolling interests and total equity. See our Annual Report on Form 10-K for the year ended December 31, 2012 for further discussion on significant accounting policies. Recent Accounting Pronouncements. In February 2013, the FASB issued guidance requiring entities to disclose certain information relating to amounts reclassified out of accumulated other comprehensive income. We do not expect the pronouncement to have a significant impact on our consolidated financial statements. |
Unamortized Leasing Commissions and Loan Costs
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Jun. 30, 2013
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unamortized Leasing Comissions and Loan Costs | UNAMORTIZED LEASING COMMISSIONS AND LOAN COSTS Costs which have been deferred consist of the following (in thousands):
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Marketable Securities
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Jun. 30, 2013
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities | MARKETABLE SECURITIES All of our marketable securities were classified as available-for-sale securities as of June 30, 2013 and December 31, 2012. Available-for-sale securities consisted of the following (in thousands):
During the three months ended June 30, 2013, available-for-sale securities were sold for total proceeds of $747,000. The gross realized gains and losses on these sales during the three months ended June 30, 2013 were $44,000 and $3,000, respectively. During the three and six months ended June 30, 2012, available-for-sale securities were sold for total proceeds of $1,312,000 and $3,926,000, respectively. The gross realized gains and losses on these sales during the three months ended June 30, 2012 were $34,000 and $3,000, respectively, and the gross realized gains and losses on the sales during the six months ended June 30, 2012 totaled $74,000 and $42,000, respectively. |
Incentive Share Plan (Tables)
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Jun. 30, 2013
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-Based Incentive Plan Activity | A summary of the share-based incentive plan activity as of and for the six months ended June 30, 2013 is as follows:
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Schedule of Nonvested and Vested Shares Activity | A summary of our non-vested and vested shares activity for the six months ended June 30, 2013 and years ended December 31, 2012, 2011 and 2010 is presented below:
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Accrued Rents and Accounts Receivable, Net (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
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Dec. 31, 2012
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Receivables [Abstract] | ||
Tenant receivables | $ 6,163 | $ 3,536 |
Accrued rents and other recoveries | 5,657 | 6,696 |
Allowance for doubtful accounts | (2,970) | (2,285) |
Total | $ 8,850 | $ 7,947 |