Exhibit

Houston, Texas, February 27, 2019 - Whitestone REIT (NYSE: WSR) (“Whitestone” or the “Company”) today announced the operating and financial results for the quarter and year ended December 31, 2018. Whitestone is a pure-play community-centered retail REIT that acquires, owns, manages, develops and redevelops high quality “E-Commerce resistant” neighborhood, community and lifestyle retail centers principally located in the largest, fastest-growing and most affluent markets in the Sunbelt. Whitestone’s optimal mix of national, regional and local tenants provide daily necessities, needed services and entertainment to the respective communities which are not readily available online.

Jim Mastandrea, Chairman and Chief Executive Officer of Whitestone REIT commented, “2018 was a solid year for Whitestone, as we produced improvement in many key areas of the business. In addition to growing same store NOI by over 3% in 2018, we also increased occupancy and rental rates. While our 2018 FFO Core per share reflects a decrease year-over-year, we made progress upgrading the portfolio through selective dispositions, improved our leverage metrics, scaled G&A and enhanced our corporate governance which should result in long-term value creation for our shareholders.” Mr Mastandrea added, "Our, high-quality properties, differentiated and unique 'E-Commerce resistant' business model, together with a cycle-tested management team, contributed to our industry-leading Total Shareholder Returns for the last three years. We are energized by the opportunity ahead of us in 2019 as our communities are located within the fastest growing cities in the country, which supports our ongoing efforts to reach our long-term milestones. We continue to evolve our truly best-in-class company to extract additional value as we move ahead."

As of December 31, 2018, Whitestone wholly owned 57 Community Centered Properties^TM with 4.8 million square feet of gross leasable area ("GLA"). The portfolio is comprised of 29 properties in Texas, 27 in Arizona and one in Illinois. Whitestone’s Retail Community Centered Properties^TM are located in Austin (4), San Antonio (3), Chicago (1), Dallas-Fort Worth (7), Houston (15) and the greater Phoenix metropolitan area (27). In addition to being business friendly, these are five of the top markets in the country in terms of size, economic strength and population growth. 2017 estimates show the projected 5-year population growth rates for both Austin and Dallas-Fort Worth to be 9.7%, San Antonio to be 8.6%, Houston to be 8.0%, and Phoenix to be 6.6% ⁽¹⁾. The Company’s retail properties in these markets are located on the best retail corners embedded in affluent communities. The Company also owns an equity interest in and manages 11 properties containing 1.3 million square feet of GLA through its investment in Pillarstone OP.

On December 27, 2018, Pillarstone OP, through an indirect wholly owned subsidiary, Whitestone Industrial-Office, LLC, sold a portfolio of three properties in Houston, Texas to an unaffiliated third party for $15.8 million in cash. The Company owns 81.4% of Pillarstone OP and accounts for its ownership under the equity method. Pillarstone OP used the net proceeds, after customary closing deductions, to pay off mortgage debt on the three properties, and repay $8.0 million of its $14.5 million loan from Whitestone. Included in 2018 equity in earnings from real estate partnership is $6.6 million related to this sale.

At December 31, 2018, 49 of the Company’s wholly-owned 57 properties were unencumbered by mortgage debt, with an undepreciated cost basis of $749.5 million. At December 31, 2018, the Company had total real estate debt of $619.4 million, of which approximately 61%, was subject to fixed interest rates. Subsequent to year end, the Company fixed the rate on an additional $65 million of variable rate debt bringing the fixed rate percentage to 70%. The Company's weighted average interest rate on all fixed rate debt as of the end of the fourth quarter was 3.92% and the weighted average remaining term was 4.5 years.

Note: Guidance reflects management’s view of current and future market conditions, as well as the earnings impact of events referenced in our earnings release and supplemental data package. This guidance does not include the operational or capital impact of any future unannounced acquisition or disposition activity or the impact of the Company's restatement of prior periods or effects therefrom. Estimates involve numerous assumptions such as rental income, interest rates, tenant default, occupancy rates, expenses and numerous other factors, and excludes potential future acquisitions and dispositions, acquisition and disposition transaction income and expenses and professional service fees. Not all of the factors are determinable at this time and actual results may vary from the projected results, and may be above or below the range indicated. We will update our guidance, on a quarterly basis, or more often as needed, reflecting the impact of acquisition and disposition volume and other factors.



RECONCILIATION OF NON-GAAP MEASURES - 2019 FINANCIAL GUIDANCE (per diluted common share and OP unit)
	Projected Range
	Full Year 2019
	Low			High
Net income attributable to Whitestone REIT	$	0.21		$	0.25

Adjustments to reconcile net income to FFO⁽¹⁾:
Depreciation expense, amortization, gain on disposal of assets	0.69			0.69
(Gain) loss on sale or disposal of assets or properties	—			—
Net income attributable to redeemable operating partnership	—			—
FFO	$	0.90		$	0.94

Adjustments to reconcile FFO to FFO Core:
Share based compensation expense	0.16			0.16
FFO Core	$	1.06		$	1.10

Same Store NOI Growth	0.50		%	2.00		%
Occupancy	90.0		%	92.0		%
Average interest rate on all debt	4.3		%	4.3		%
Weighted average shares and OP units	42,357			42,357

On January 1, 2018, the Company adopted ASU 2014-09 ("Topic 606"), as subsequently amended, using the modified retrospective method and applied Topic 606 to those contracts that were not completed as of January 1, 2018. In August 2018, the Company received a comment letter from the Staff of the Division of Corporation Finance of the SEC (the “Staff”) relating to its Quarterly Report on Form 10-Q for the period ended June 30, 2018. The Staff requested that the Company provide them with an analysis of the Company’s determination that the contribution of all of the equity interests in 14 properties to Pillarstone OP in exchange for Pillarstone OP Units and the assumption of debt in December 2016 (the “Contribution”) did not meet the requirements for derecognition of the underlying assets under Topic 606, and an explanation of the Company’s consideration of the immaterial accounting errors related to Pillarstone OP in its conclusion that disclosure controls and procedures and internal controls over financial reporting were effective as of June 30, 2018 and December 31, 2017. In September 2018, the Company responded to the Staff’s letter with the requested analysis and explanation. In October 2018, the Company received a comment letter from the Staff with certain follow up questions. Subsequently, the Company engaged in verbal discussions with the Staff regarding its responses and, in February 2019, the Staff verbally informed the Company that it objected to the Company's conclusion regarding the assessment of the transfer of control criteria in Topic 606 with respect to the Contribution and objected to the Company’s continued recognition of the underlying assets and liabilities associated with the Contribution subsequent to January 1, 2018, the adoption date of Topic 606. Accordingly, the Company, has concluded that the Company’s unaudited consolidated financial statements as of and for the periods ended March 31, 2018, June 30, 2018 and September 30, 2018 (collectively, the “Prior Period Financial Statements”) included in the Company’s Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2018, June 30, 2018 and September 30, 2018, respectively, should be restated to correct the accounting error described below and should no longer be relied upon. Because this change from the profit sharing method is only applicable for periods ending after giving effect to the implementation of Topic 606, no periods prior to January 1, 2018 are affected by this error.

adjustments are expected to increase the Company's retained earnings as of January 1, 2018 by $19.1 million. For the three months ended March 31, 2018, the Company estimates this change will decrease revenue by $3.8 million, decrease total expenses by $3.3 million, increase equity in earnings of real estate partnership by $0.7 million and increase net income by $0.2 million. For the three months ended June 30, 2018, the Company estimates this change will decrease revenue by $3.6 million, decrease total expenses by $3.3 million, increase equity in earnings of real estate partnership by $0.6 million and increase net income by $0.2 million. For the six months ended June 30, 2018, the Company estimates this change will decrease revenue by $7.4 million, decrease total expenses by $6.6 million, increase equity in earnings of real estate partnership by $1.3 million and increase net income by $0.4 million. For the three months ended September 30, 2018, the Company estimates this change will decrease revenue by $3.9 million, decrease total expenses by $3.6 million, increase equity in earnings of real estate partnership by $0.5 million and increase net income by $0.2 million. For the nine months ended September 30, 2018, the Company estimates this change will decrease revenue by $11.3 million, decrease total expenses by $10.2 million, increase equity in earnings of real estate partnership by $1.8 million and increase net income by $0.6 million. These estimates are subject to finalization, including completion of the Company's technical accounting analysis for these matters and completion of interim review procedures.

In light of the facts and determinations described above, the Company’s management, under the supervision and with participation of the Company's Chief Executive Officer and Chief Financial Officer, is in the process of evaluating the effectiveness of the Company’s internal controls over financial reporting and disclosure controls and procedures. If one or more material weaknesses is determined to have existed, management of the Company expects to conclude that the Company's internal controls over financial reporting and disclosure controls and procedures were ineffective for the periods ending March 31, June 30 and September 30, 2018 and possibly for other periods.

Whitestone is a community-centered retail REIT that acquires, owns, manages, develops and redevelops high quality "E-Commerce resistant" neighborhood, community and lifestyle retail centers principally located in the largest, fastest-growing and most affluent markets in the Sunbelt. Whitestone’s optimal mix of national, regional and local tenants provides daily necessities, needed services and entertainment to the communities in which they are located. Whitestone's properties are primarily located in business-friendly Phoenix, Austin, Dallas-Fort Worth, Houston and San Antonio, which are among the fastest growing U.S. population centers with highly educated workforces, high household incomes and strong job growth. As of December 31, 2018, Whitestone's total shareholder return ranks #2 of 17, #1 of 17, and #2 of 16, of the U.S. public shopping center REITs for the one-year, three-year, and five-year periods, respectively^.(2). For additional information, visit www.whitestonereit.com.

Certain statements contained in this press release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company intends for all such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable. Such information is subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements include statements about our earnings guidance, future liquidity, performance growth and expectations and other matters and can generally be identified by the Company's use of forward-looking terminology, such as “may,” “will,” “plan,” “expect,” “intend,” “anticipate,” “believe,” “continue,” “goals” or similar words or phrases that are predictions of future events or trends and which do not relate solely to historical matters.

These statements include discussion and analysis of the Company’s financial condition; the impact of the restatement on the Company’s financial statements; and the impact of the restatement on the Company’s evaluation of the effectiveness of its internal controls over financial reporting and disclosure controls and procedures. The outcome of these issues and the impact of these forward looking statements are subject to a number of risks, including: the costs and expenses of the restatement; delays in the preparation of the restated financial statements and the Comprehensive Form 10-K; the risk that additional information will come to light during the course of the preparation of the restated financial statements that alters the scope or magnitude of the restatement; potential reviews, litigation or other proceedings by governmental authorities, shareholders or other parties; risks related to the impact on the restatement on the Company’s reputation, commercial contracts and ability to raise capital, and other factors as discussed in the Company’s filings with the SEC from time to time.

The following are additional factors that could cause the Company's actual results and its expectations to differ materially from those described in the Company's forward-looking statements: the Company's ability to meet its long-term goals, its assumptions regarding its earnings guidance, including its ability to execute effectively its acquisition and disposition strategy, to continue to execute its development pipeline on schedule and at the expected costs, and its ability to grow its NOI as expected, which could be impacted by a number of factors, including, among other things, its ability to continue to renew leases or re-let space on attractive terms and to otherwise address its leasing rollover; its ability to successfully identify, finance and consummate suitable acquisitions, and the impact of such acquisitions, including financing developments, capitalization rates and internal rates of return; the Company’s ability to reduce or otherwise effectively manage its general and administrative expenses; the Company’s ability to fund from cash flows or otherwise distributions to its shareholders at current rates or at all; current adverse market and economic conditions; lease terminations or lease defaults; the impact of competition on the Company's efforts to renew existing leases; changes in the economies and other conditions of the specific markets in which the Company operates; economic, legislative and regulatory changes, including the impact of the Tax Cuts and Jobs Act of 2017; the success of the Company's real estate strategies and investment objectives; the Company's ability to continue to qualify as a REIT under the Internal Revenue Code of 1986, as amended; and other factors detailed in the Company's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents the Company files with the Securities and Exchange Commission from time to time.

⁽²⁾Whitestone REIT Total Shareholder Return as compared to its peers according to the SNL Public REIT Market Data based on closing prices on December 31, 2018. Peers include: Regency Centers Corp., Cedar Realty Trust Inc., Retail Opportunity Investments, Weingarten Realty Investors, Saul Centers Inc., Urban Edge Properties, Federal Realty Investment, Urstadt Biddle Properties Inc., RPT Realty, Retail Properties of America, Kite Realty Group Trust, Acadia Realty Trust, Wheeler REIT Inc., Brixmor Property Group Inc., Kimco Realty Corp., and Site Centers Corp.

Earnings Before Interest, Tax, Depreciation and Amortization (“EBITDA”): Management believes that EBITDA is an appropriate supplemental measure of operating performance to net income attributable to the Company. The Company defines EBITDA as operating revenues (rental and other revenues) less property and related expenses (property operation and maintenance and real estate taxes), adjustments for unconsolidated real estate partnership and general and administrative expenses. Management believes that EBITDA provides useful information to the investment community about the Company's operating performance when compared to other REITs since EBITDA is generally recognized as a standard measure. However, EBITDA should not be viewed as a measure of the Company's overall financial performance since it does not reflect depreciation and amortization, involuntary conversion, interest expense, provision for income taxes, gain or loss on sale or disposition of assets and the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company's properties. Other REITs may use different methodologies for calculating EBITDA and, accordingly, the Company's EBITDA may not be comparable to other REITs.

FFO: Management believes that FFO is a useful measure of the Company's operating performance. The Company computes FFO as defined by NAREIT, which states that FFO should represent net income available to common shareholders (computed in accordance with GAAP) excluding gains or losses from sales of operating assets or assets of unconsolidated real estate partnership, impairment charges and extraordinary items, plus depreciation and amortization of operating properties, including the Company's share of unconsolidated real estate joint ventures and partnerships. FFO does not represent cash flows from operating activities determined in accordance with GAAP and should not be considered an alternative to net income as an indication of the Company's performance or to cash flow from operations as a measure of liquidity or ability to make distributions and service debt.

Management considers FFO a useful additional measure of performance for an equity REIT because it facilitates an understanding of the operating performance of its properties without giving effect to real estate depreciation and amortization, which assumes that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, management believes that FFO provides a more meaningful and accurate indication of the Company's performance and useful information for the investment community to compare Whitestone to other REITs since FFO is generally recognized as the industry standard for reporting the operations of REITs.

FFO Core: Management believes that the computation of FFO in accordance with NAREIT's definition includes certain non-cash and non-comparable items that affect the Company's period-over-period performance. These items include, but are not limited to, legal settlements, proxy contest fees, debt extension costs, non-cash share-based compensation expense, rent support agreement payments received from sellers on acquired assets and acquisition costs. In addition, the Company believes that FFO Core is a useful supplemental measure for the investing community to use in comparing the Company to other REITs as many REITs provide some form of adjusted or modified FFO. However, other REITs may use different adjustments, and the Company's FFO Core may not be comparable to the adjusted or modified FFO of other REITs.

NOI: Management believes that NOI is a useful measure of the Company's property operating performance. The Company defines NOI as operating revenues (rental and other revenues) less property and related expenses (property operation and maintenance and real estate taxes). Because NOI excludes general and administrative expenses, depreciation and amortization, involuntary conversion, interest expense, interest income, provision for income taxes, gain or loss on sale or disposition of assets, pro rata share of NOI of unconsolidated entities and capital expenditures and leasing costs, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact to operations from trends in occupancy rates, rental rates and operating costs, providing perspective not immediately apparent from net income. The Company uses NOI to evaluate its operating performance since NOI allows the Company to evaluate the impact of factors, such as occupancy levels, lease structure, lease rates and tenant base, have on the Company's results, margins and returns. In addition, management believes that NOI provides useful information to the investment community about the Company's property and operating performance when compared to other REITs since NOI is generally recognized as a standard measure of property performance in the real estate industry. However, NOI should not be viewed as a measure of the Company's overall financial performance since it does not reflect general and administrative expenses, depreciation and amortization, involuntary conversion, interest expense, interest income, provision for income taxes, gain or loss on sale or disposition of assets, and the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company's properties. Other REITs may use different methodologies for calculating NOI, and accordingly, the Company's NOI may not be comparable to that of other REITs.



Whitestone REIT and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)

	December 31,
	2018			2017
ASSETS
Real estate assets, at cost
Property	$	1,052,238		$	1,149,454
Accumulated depreciation	(113,300		)	(131,034		)
Total real estate assets	938,938			1,018,420
Investment in real estate partnership	26,236			4,095
Cash and cash equivalents	13,658			5,005
Restricted cash	128			205
Marketable securities	—			32
Escrows and acquisition deposits	8,211			7,916
Accrued rents and accounts receivable, net of allowance for doubtful accounts	21,642			21,140
Receivable due from related party	6,055			—
Unamortized lease commissions and loan costs	6,698			7,157
Prepaid expenses and other assets	7,306			6,198
Total assets	$	1,028,872		$	1,070,168
LIABILITIES AND EQUITY
Liabilities:
Notes payable	$	618,205		$	659,068
Accounts payable and accrued expenses	33,729			35,536
Payable due to related party	58			—
Tenants' security deposits	6,130			5,694
Dividends and distributions payable	11,600			11,466
Total liabilities	669,722			711,764
Commitments and contingencies:	—			—
Equity:
Preferred shares, $0.001 par value per share; 50,000,000 shares authorized; none issued and outstanding as of December 31, 2018 and December 31, 2017, respectively	—			—
Common shares, $0.001 par value per share; 400,000,000 shares authorized; 39,778,029 and 39,221,773 issued and outstanding as of December 31, 2018 and December 31, 2017, respectively	39			38
Additional paid-in capital	527,662			521,314
Accumulated deficit	(181,361		)	(176,684		)
Accumulated other comprehensive gain	4,116			2,936
Total Whitestone REIT shareholders' equity	350,456			347,604
Noncontrolling interest in subsidiary	8,694			10,800
Total equity	359,150			358,404
Total liabilities and equity	$	1,028,872		$	1,070,168



	Year Ended December 31,
	2018			2017			2016

Property revenues
Rental revenues	$	86,644		$	94,568		$	80,068
Other revenues	33,219			31,391			24,369
Total property revenues	119,863			125,959			104,437

Property expenses
Property operation and maintenance	21,069			24,213			19,709
Real estate taxes	16,362			17,897			14,383
Total property expenses	37,431			42,110			34,092

Other expenses (income)
General and administrative	23,281			23,949			23,922
Depreciation and amortization	25,679			27,240			22,457
Equity in earnings of real estate partnership	(8,431		)	—			—
Interest expense	25,177			23,651			19,239
Interest, dividend and other investment income	(1,055		)	(410		)	(429		)
Total other expense	64,651			74,430			65,189

Income before gain (loss) on sale or disposal of properties or assets, income taxes, and profit sharing expense	17,781			9,419			5,156

Provision for income taxes	(347		)	(386		)	(289		)
Gain on sale of properties	4,629			16			3,357
Profit sharing expense	—			(278		)	(15		)
Loss on sale or disposal of assets	(82		)	(183		)	(96		)

Net income	21,981			8,588			8,113

Less: Net income attributable to noncontrolling interests	550			254			182

Net income attributable to Whitestone REIT	$	21,431		$	8,334		$	7,931



	Year Ended December 31,
	2018		2017		2016

Basic Earnings Per Share:
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares	$	0.54	$	0.22	$	0.26
Diluted Earnings Per Share:
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares	$	0.52	$	0.22	$	0.26

Weighted average number of common shares outstanding:
Basic	39,274		35,428		27,618
Diluted	40,612		36,255		28,383

Distributions declared per common share / OP unit	$	1.1400	$	1.1400	$	1.1400

Consolidated Statements of Comprehensive Income

Net income	$	21,981	$	8,588	$	8,113

Other comprehensive gain

Unrealized gain on cash flow hedging activities	1,192		2,022		929
Unrealized gain on available-for-sale marketable securities	18		118		82

Comprehensive income	23,191		10,728		9,124

Less: Net income attributable to noncontrolling interests	550		254		182
Less: Comprehensive gain attributable to noncontrolling interests	30		63		23

Comprehensive income attributable to Whitestone REIT	$	22,611	$	10,411	$	8,919



	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2018			2017			2018			2017
	(unaudited)			(unaudited)
Property revenues
Rental revenues	$	21,626		$	25,371		$	86,644		$	94,568
Other revenues	8,275			8,460			33,219			31,391
Total property revenues	29,901			33,831			119,863			125,959

Property expenses
Property operation and maintenance	5,744			7,240			21,069			24,213
Real estate taxes	4,102			4,309			16,362			17,897
Total property expenses	9,846			11,549			37,431			42,110

Other expenses (income)
General and administrative	5,294			6,351			23,281			23,949
Depreciation and amortization	6,635			7,304			25,679			27,240
Equity in earnings of real estate partnership	(6,669		)	—			(8,431		)	—
Interest expense	6,472			6,493			25,177			23,651
Interest, dividend and other investment income	(263		)	(29		)	(1,055		)	(410		)
Total other expense	11,469			20,119			64,651			74,430

Income before gain (loss) on sale or disposal of properties or assets, income taxes, and profit sharing expense	8,586			2,163			17,781			9,419

Provision for income taxes	(87		)	(90		)	(347		)	(386		)
Gain on sale of properties	—			—			4,629			16
Profit sharing expense	—			(50		)	—			(278		)
Gain (loss) on sale or disposal of assets	175			(48		)	(82		)	(183		)

Net income	8,674			1,975			21,981			8,588

Less: Net income attributable to noncontrolling interests	217			54			550			254

Net income attributable to Whitestone REIT	$	8,457		$	1,921		$	21,431		$	8,334



	Three Months Ended					Twelve Months Ended
	December 31,					December 31,
	2018			2017		2018		2017
	(unaudited)			(unaudited)
Basic Earnings Per Share:
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	0.21		$	0.05	$	0.54	$	0.22
Diluted Earnings Per Share:
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	0.21		$	0.05	$	0.52	$	0.22

Weighted average number of common shares outstanding:
Basic	39,493			38,460		39,274		35,428
Diluted	40,822			39,353		40,612		36,255

Distributions declared per common share / OP unit	$	0.2850		$	0.2850	$	1.1400	$	1.1400

Consolidated Statements of Comprehensive Income

Net income	$	8,674		$	1,975	$	21,981	$	8,588

Other comprehensive gain (loss)

Unrealized gain (loss) on cash flow hedging activities	(2,971		)	1,898		1,192		2,022
Unrealized gain on available-for-sale marketable securities	—			92		18		118

Comprehensive income	5,703			3,965		23,191		10,728

Less: Net income attributable to noncontrolling interests	217			54		550		254
Less: Comprehensive gain (loss) attributable to noncontrolling interests	(74		)	55		30		63

Comprehensive income attributable to Whitestone REIT	$	5,560		$	3,856	$	22,611	$	10,411



	Three Months Ended						Year Ended
	December 31,						December 31,
FFO AND FFO CORE	2018			2017			2018			2017			2016
Net income attributable to Whitestone REIT	$	8,457		$	1,921		$	21,431		$	8,334		$	7,931
Adjustments to reconcile to FFO:
Depreciation and amortization of real estate	6,565			7,035			25,401			26,290			22,179
Depreciation and amortization of real estate assets of unconsolidated real estate partnership	776			—			2,903			—			—
(Gain) loss on sale or disposal of assets and properties	(175		)	47			(4,547		)	161			(3,261		)
Gain on sale or disposal of properties or assets of unconsolidated real estate partnership	(6,350		)	—			(6,340		)	—			—
Net income attributable to noncontrolling interests	217			54			550			254			182
FFO	9,490			9,057			39,398			35,039			27,031
Adjustments to reconcile to FFO Core:
Share-based compensation expense	1,864			2,881			6,758			10,426			10,247
Proxy contest professional fees	—			—			2,534			—			—
Early debt extinguishment costs of unconsolidated real estate partnership	88			—			88			—			—
Acquisition costs	—			227			—			1,625			2,101
FFO Core	$	11,442		$	12,165		$	48,778		$	47,090		$	39,379

FFO PER SHARE AND OP UNIT CALCULATION
Numerator:
FFO	$	9,490		$	9,057		$	39,398		$	35,039		$	27,031
Distributions paid on unvested restricted common shares	(76		)	(112		)	(301		)	(456		)	(620		)
FFO excluding amounts attributable to unvested restricted common shares	$	9,414		$	8,945		$	39,097		$	34,583		$	26,411
FFO Core excluding amounts attributable to unvested restricted common shares	$	11,366		$	12,053		$	48,477		$	46,634		$	38,759
Denominator:
Weighted average number of total common shares - basic	39,493			38,460			39,274			35,428			27,618
Weighted average number of total noncontrolling OP units - basic	929			1,084			1,011			1,088			642
Weighted average number of total common shares and noncontrolling OP units - basic	40,422			39,544			40,285			36,516			28,260

Effect of dilutive securities:
Unvested restricted shares	1,329			893			1,338			827			765
Weighted average number of total common shares and noncontrolling OP units - diluted	41,751			40,437			41,623			37,343			29,025

FFO per common share and OP unit - basic	$	0.23		$	0.23		$	0.97		$	0.95		$	0.93
FFO per common share and OP unit - diluted	$	0.23		$	0.22		$	0.94		$	0.93		$	0.91

FFO Core per common share and OP unit - basic	$	0.28		$	0.30		$	1.20		$	1.28		$	1.37
FFO Core per common share and OP unit - diluted	$	0.27		$	0.30		$	1.16		$	1.25		$	1.34



	Three Months Ended						Year Ended
	December 31,						December 31,
PROPERTY NET OPERATING INCOME	2018			2017			2018			2017			2016
Net income attributable to Whitestone REIT	$	8,457		$	1,921		$	21,431		$	8,334		$	7,931
General and administrative expenses	5,294			6,351			23,281			23,949			23,922
Depreciation and amortization	6,635			7,304			25,679			27,240			22,457
Equity in earnings of real estate partnership	(6,669		)	—			(8,431		)	—			—
Interest expense	6,472			6,493			25,177			23,651			19,239
Interest, dividend and other investment income	(263		)	(29		)	(1,055		)	(410		)	(429		)
Provision for income taxes	87			90			347			386			289
Gain on sale of properties	—			—			(4,629		)	(16		)	(3,357		)
Management fee, net of related expenses	(116		)	—			(208		)	—			—
Profit sharing expense	—			50			—			278			15
Loss on disposal of assets	(175		)	48			82			183			96
NOI, adjustments for unconsolidated real estate partnership	1,840			—			7,725			—			—
Net income attributable to noncontrolling interests	217			54			550			254			182
NOI	$	21,779		$	22,282		$	89,949		$	83,849		$	70,345



	Three Months Ended					Year Ended
	December 31,					December 31,
EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION	2018			2017		2018			2017			2016

Net income attributable to Whitestone REIT	$	8,457		$	1,921	$	21,431		$	8,334		$	7,931
Depreciation and amortization	6,635			7,304		25,679			27,240			22,457
Equity in earnings of real estate partnership	(6,669		)	—		(8,431		)	—			—
Interest expense	6,472			6,493		25,177			23,651			19,239
Provision for income taxes	87			90		347			386			289
Gain on sale of properties	—			—		(4,629		)	(16		)	(3,357		)
Profit sharing expense	—			50		—			278			15
Loss on disposal of assets	(175		)	48		82			183			96
EBITDA adjustments for unconsolidated real estate partnership	1,771			—		7,463			—			—
Net income attributable to noncontrolling interests	217			54		550			254			182
EBITDA	$	16,795		$	15,960	$	67,669		$	60,310		$	46,852



	Q4-2018	YTD 2018
Occupancy:
Wholly Owned Properties	90.5%
Same Store Property Net Operating Income Growth	(0.9)%	3.3%
Rental Rate Growth - Total (GAAP Basis):	4.5%	10.3%
New Leases	6.9%	7.0%
Renewal Leases	4.5%	11.1%

Leasing Transactions:
Number of New Leases	28	131
New Leases - Annualized Revenue (millions)	$5.4	$41.2
Number of Renewal Leases	47	177
Renewal Leases - Annualized Revenue (millions)	$12.3	$41.5



	2019 Guidance
Net income attributable to Whitestone REIT (per share)	$0.21 - $0.25
NAREIT FFO (per share)	$0.90 - $0.94
FFO Core	$1.06 - $1.10
Same Store NOI growth	0.5% - 2%



	FFO						FFO Core
	Low			High			Low			High
Actual - 2018	$	0.94		$	0.94		$	1.16		$	1.16

Increased share count	(0.02		)	(0.02		)	(0.02		)	(0.02		)
2018 dispositions	(0.04		)	(0.04		)	(0.04		)	(0.04		)
Decrease (increase) in general and administrative expenses	0.05			0.06			(0.01		)	—
Same store NOI growth	—			0.03			—			0.03
Interest rate increase	(0.03		)	(0.03		)	(0.03		)	(0.03		)

Guidance - 2019	$	0.90		$	0.94		$	1.06		$	1.10


•	Funds from Operations, as defined by the National Association of Real Estate Investment Trusts ("FFO") was $0.94 per share for the year compared to $0.93 in 2017;


•	FFO Core was $1.16 per share for the year compared to $1.25 per share in 2017;


•	Rental rates on new and renewal leases signed in 2018 increased 7.0% and 11.1%, respectively, on a GAAP basis;


•	Annualized Base Rent (“ABR”) per leased squared foot grew to $19.35 from $18.82 a year ago;


•	Dispositions of five properties (including three properties owned through investment in Pillarstone REIT Operating Partnership, L.P. ("Pillarstone OP")) in 2018 generating $29.3 million in gross proceeds; and


•	Net Debt to EBITDA, adjusted improved to 8.4 times from 8.5 times in 2017.