(Mark One) | |||||
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____________ to ____________ |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
N/A |
Large accelerated filer | ☐ | ☒ | ||||||||||||
Non-accelerated filer | ☐ | Small reporting company | ||||||||||||
Emerging growth company |
Item 1. | ||||||||||||||
Item 2. | ||||||||||||||
Item 3. | ||||||||||||||
Item 4. |
Item 1. | ||||||||||||||
Item 1A. | ||||||||||||||
Item 2. | ||||||||||||||
Item 3. | ||||||||||||||
Item 4. | ||||||||||||||
Item 5. | ||||||||||||||
Item 6. | ||||||||||||||
March 31, 2022 | December 31, 2021 | |||||||||||||
(unaudited) | ||||||||||||||
ASSETS | ||||||||||||||
Real estate assets, at cost | ||||||||||||||
Property | $ | $ | ||||||||||||
Accumulated depreciation | ( | ( | ||||||||||||
Total real estate assets | ||||||||||||||
Investment in real estate partnership | ||||||||||||||
Cash and cash equivalents | ||||||||||||||
Restricted cash | ||||||||||||||
Escrows and acquisition deposits | ||||||||||||||
Accrued rents and accounts receivable, net of allowance for doubtful accounts | ||||||||||||||
Receivable due from related party | ||||||||||||||
Unamortized lease commissions, legal fees and loan costs | ||||||||||||||
Prepaid expenses and other assets(1) | ||||||||||||||
Total assets | $ | $ | ||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||
Liabilities: | ||||||||||||||
Notes payable | $ | $ | ||||||||||||
Accounts payable and accrued expenses(2) | ||||||||||||||
Payable due to related party | ||||||||||||||
Tenants' security deposits | ||||||||||||||
Dividends and distributions payable | ||||||||||||||
Total liabilities | ||||||||||||||
Commitments and contingencies: | ||||||||||||||
Equity: | ||||||||||||||
Preferred shares, $ | ||||||||||||||
Common shares, $ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Accumulated deficit | ( | ( | ||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Total Whitestone REIT shareholders' equity | ||||||||||||||
Noncontrolling interest in subsidiary | ||||||||||||||
Total equity | ||||||||||||||
Total liabilities and equity | $ | $ |
March 31, 2022 | December 31, 2021 | |||||||||||||
(unaudited) | ||||||||||||||
(1) Operating lease right of use assets (net) | $ | $ | ||||||||||||
(2) Operating lease liabilities | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Revenues | ||||||||||||||
Rental(1) | $ | $ | ||||||||||||
Management, transaction, and other fees | ||||||||||||||
Total revenues | ||||||||||||||
Operating expenses | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Operating and maintenance | ||||||||||||||
Real estate taxes | ||||||||||||||
General and administrative | ||||||||||||||
Total operating expenses | ||||||||||||||
Other expenses (income) | ||||||||||||||
Interest expense | ||||||||||||||
(Gain) loss on sale or disposal of assets, net | ( | |||||||||||||
Interest, dividend and other investment income | ( | ( | ||||||||||||
Total other expenses | ||||||||||||||
Income before equity investment in real estate partnership and income tax | ||||||||||||||
Equity in earnings of real estate partnership | ||||||||||||||
Provision for income tax | ( | ( | ||||||||||||
Net income | ||||||||||||||
Less: Net income attributable to noncontrolling interests | ||||||||||||||
Net income attributable to Whitestone REIT | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Basic Earnings Per Share: | ||||||||||||||
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares | $ | $ | ||||||||||||
Diluted Earnings Per Share: | ||||||||||||||
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares | $ | $ | ||||||||||||
Weighted average number of common shares outstanding: | ||||||||||||||
Basic | ||||||||||||||
Diluted | ||||||||||||||
Consolidated Statements of Comprehensive Income | ||||||||||||||
Net income | $ | $ | ||||||||||||
Other comprehensive income | ||||||||||||||
Unrealized gain on cash flow hedging activities | ||||||||||||||
Comprehensive income | ||||||||||||||
Less: Net income attributable to noncontrolling interests | ||||||||||||||
Less: Comprehensive income attributable to noncontrolling interests | ||||||||||||||
Comprehensive income attributable to Whitestone REIT | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
(1) Rental | ||||||||||||||
Rental revenues | $ | $ | ||||||||||||
Recoveries | ||||||||||||||
Bad debt | ( | ( | ||||||||||||
Total rental | $ | $ |
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, 2021 | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Exchange of noncontrolling interest OP units for common shares | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares - ATM Program, net of offering costs | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Exchange offer costs | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares under dividend reinvestment plan | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common shares (1) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | ( | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Distributions - $ | — | — | — | ( | — | ( | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gain on change in value of cash flow hedge | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2022 | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
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, 2020 | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Exchange of noncontrolling interest OP units for common shares | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares - ATM Program, net of offering costs | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Exchange offer costs | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares under dividend reinvestment plan | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common shares (1) | ( | — | ( | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions - $ | — | — | — | ( | — | ( | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gain on change in value of cash flow hedge | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2021 | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income | $ | $ | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Amortization of deferred loan costs | ||||||||||||||
(Gain) loss on sale or disposal of assets, net | ( | |||||||||||||
Bad debt | ||||||||||||||
Share-based compensation | ( | |||||||||||||
Equity in earnings of real estate partnership | ( | ( | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Escrows and acquisition deposits | ||||||||||||||
Accrued rents and accounts receivable | ( | ( | ||||||||||||
Receivable due from related party | ( | ( | ||||||||||||
Unamortized lease commissions, legal fees and loan costs | ( | ( | ||||||||||||
Prepaid expenses and other assets | ||||||||||||||
Accounts payable and accrued expenses | ( | ( | ||||||||||||
Payable due to related party | ||||||||||||||
Tenants' security deposits | ||||||||||||||
Net cash provided by operating activities | ||||||||||||||
Cash flows from investing activities: | ||||||||||||||
Additions to real estate | ( | ( | ||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
Cash flows from financing activities: | ||||||||||||||
Distributions paid to common shareholders | ( | ( | ||||||||||||
Distributions paid to OP unit holders | ( | ( | ||||||||||||
Repayments of notes payable | ( | ( | ||||||||||||
Repurchase of common shares | ( | |||||||||||||
Net cash used in financing activities | ( | ( | ||||||||||||
Net decrease in cash, cash equivalents and restricted cash | ( | ( | ||||||||||||
Cash, cash equivalents and restricted cash at beginning of period | ||||||||||||||
Cash, cash equivalents and restricted cash at end of period (1) | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Supplemental disclosure of cash flow information: | ||||||||||||||
Cash paid for interest | $ | $ | ||||||||||||
Non cash investing and financing activities: | ||||||||||||||
Disposal of fully depreciated real estate | $ | $ | ||||||||||||
Financed insurance premiums | $ | $ | ||||||||||||
Value of shares issued under dividend reinvestment plan | $ | $ | ||||||||||||
Change in fair value of cash flow hedge | $ | $ |
March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Cash, cash equivalents and restricted cash | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Restricted cash | ||||||||||||||
Total cash, cash equivalents and restricted cash | $ | $ |
Years Ended December 31, | Minimum Future Rents(1) | |||||||
2022 (remaining) | $ | |||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
Thereafter | ||||||||
Total | $ |
Years Ended December 31, | March 31, 2022 | |||||||
2022 (remaining) | $ | |||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
Thereafter | ||||||||
Total undiscounted rental payments | ||||||||
Less imputed interest | ||||||||
Total lease liabilities | $ |
March 31, 2022 | December 31, 2021 | |||||||||||||
Tenant receivables | $ | $ | ||||||||||||
Accrued rents and other recoveries | ||||||||||||||
Allowance for doubtful accounts | ( | ( | ||||||||||||
Other receivables | ||||||||||||||
Total | $ | $ |
March 31, 2022 | December 31, 2021 | |||||||||||||
Leasing commissions | $ | $ | ||||||||||||
Deferred legal cost | ||||||||||||||
Deferred financing cost | ||||||||||||||
Total cost | ||||||||||||||
Less: leasing commissions accumulated amortization | ( | ( | ||||||||||||
Less: deferred legal cost accumulated amortization | ( | ( | ||||||||||||
Less: deferred financing cost accumulated amortization | ( | ( | ||||||||||||
Total cost, net of accumulated amortization | $ | $ |
Company’s Investment as of | |||||||||||||||||
March 31, 2022 | December 31, 2021 | ||||||||||||||||
Real estate partnership | Ownership Interest | ||||||||||||||||
Pillarstone OP(1) | $ | $ | |||||||||||||||
Total real estate partnership(2)(3) | $ | $ |
Three Months Ended March 31, | |||||||||||||||||
2022 | 2021 | ||||||||||||||||
Pillarstone OP | $ | $ |
March 31, 2022 | December 31, 2021 | |||||||||||||
Assets: | ||||||||||||||
Real estate, net | $ | $ | ||||||||||||
Other assets | ||||||||||||||
Total assets | ||||||||||||||
Liabilities and equity: | ||||||||||||||
Notes payable | ||||||||||||||
Other liabilities | ||||||||||||||
Equity | ||||||||||||||
Total liabilities and equity | ||||||||||||||
Company’s share of equity | ||||||||||||||
Cost of investment in excess of the Company’s share of underlying net book value | ||||||||||||||
Carrying value of investment in real estate partnership | $ | $ |
Three Months Ended March 31, | |||||||||||||||||
2022 | 2021 | ||||||||||||||||
Revenues | $ | $ | |||||||||||||||
Operating expenses | ( | ( | |||||||||||||||
Other expenses | ( | ( | |||||||||||||||
Net income | $ | $ |
Description | March 31, 2022 | December 31, 2021 | ||||||||||||
Fixed rate notes | ||||||||||||||
$100.0 million, 1.73% plus 1.35% to 1.90% Note, due October 30, 2022 (1) | $ | $ | ||||||||||||
$165.0 million, 2.24% plus 1.35% to 1.90% Note, due January 31, 2024 (2) | ||||||||||||||
$80.0 million, 3.72% Note, due June 1, 2027 | ||||||||||||||
$19.0 million 4.15% Note, due December 1, 2024 | ||||||||||||||
$20.2 million 4.28% Note, due June 6, 2023 | ||||||||||||||
$14.0 million 4.34% Note, due September 11, 2024 | ||||||||||||||
$14.3 million 4.34% Note, due September 11, 2024 | ||||||||||||||
$15.1 million 4.99% Note, due January 6, 2024 | ||||||||||||||
$2.6 million 5.46% Note, due October 1, 2023 | ||||||||||||||
$50.0 million, 5.09% Note, due March 22, 2029 | ||||||||||||||
$50.0 million, 5.17% Note, due March 22, 2029 | ||||||||||||||
$1.8 million 3.15% Note, due November 28, 2022 | ||||||||||||||
Floating rate notes | ||||||||||||||
Unsecured line of credit, LIBOR plus 1.40% to 1.90%, due January 31, 2023 | ||||||||||||||
Total notes payable principal | ||||||||||||||
Less deferred financing costs, net of accumulated amortization | ( | ( | ||||||||||||
Total notes payable | $ | $ |
Year | Amount Due | |||||||
2022 (remaining) | $ | |||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
Thereafter | ||||||||
Total | $ |
March 31, 2022 | |||||||||||
Balance Sheet Location | Estimated Fair Value | ||||||||||
Accounts payable and accrued expenses | $ | ( |
December 31, 2021 | |||||||||||
Balance Sheet Location | Estimated Fair Value | ||||||||||
Accounts payable and accrued expenses | $ | ( |
Amount Recognized as Comprehensive income | Location of Income (Loss) Recognized in Earnings | Amount of Income (Loss) Recognized in Earnings (1) | ||||||||||||||||||
Three Months Ended March 31, 2022 | $ | Interest expense | $ | ( | ||||||||||||||||
Three Months Ended March 31, 2021 | $ | Interest expense | $ | ( | ||||||||||||||||
Three Months Ended March 31, | ||||||||||||||
(in thousands, except per share data) | 2022 | 2021 | ||||||||||||
Numerator: | ||||||||||||||
Income from continuing operations | $ | $ | ||||||||||||
Less: Net income attributable to noncontrolling interests | ( | ( | ||||||||||||
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares | $ | $ | ||||||||||||
Denominator: | ||||||||||||||
Weighted average number of common shares - basic | ||||||||||||||
Effect of dilutive securities: | ||||||||||||||
Unvested restricted shares | ||||||||||||||
Weighted average number of common shares - dilutive | ||||||||||||||
Earnings Per Share: | ||||||||||||||
Basic: | ||||||||||||||
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares | $ | $ | ||||||||||||
Diluted: | ||||||||||||||
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares | $ | $ |
Common Shares | Noncontrolling OP Unit Holders | Total | ||||||||||||||||||||||||||||||
Quarter Paid | Distributions Per Common Share | Amount Paid | Distributions Per OP Unit | Amount Paid | Amount Paid | |||||||||||||||||||||||||||
2022 | ||||||||||||||||||||||||||||||||
First Quarter | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
2021 | ||||||||||||||||||||||||||||||||
Fourth Quarter | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Third Quarter | ||||||||||||||||||||||||||||||||
Second Quarter | ||||||||||||||||||||||||||||||||
First Quarter | ||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
Shares | Weighted Average Grant Date Fair Value | |||||||||||||
Non-vested at January 1, 2022 | $ | |||||||||||||
Forfeited | ( | |||||||||||||
Non-vested at March 31, 2022 | ||||||||||||||
Available for grant at March 31, 2022 |
Shares Granted | Shares Vested | |||||||||||||||||||||||||
Non-Vested Shares Issued | Weighted Average Grant-Date Fair Value | Vested Shares | Total Vest-Date Fair Value | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Three Months Ended March 31, | $ | $ | ||||||||||||||||||||||||
Year Ended December 31, 2021 | $ | ( | $ | |||||||||||||||||||||||
Year Ended December 31, 2020 | $ | ( | $ |
Three Months Ended March 31, | |||||||||||||||||||||||
Location of Revenue (Expense) | 2022 | 2021 | |||||||||||||||||||||
Rent | Operating and maintenance | $ | ( | $ | ( | ||||||||||||||||||
Property management fee income | Management, transaction, and other fees | $ | $ | ||||||||||||||||||||
Number of Leases Signed | GLA Signed | Weighted Average Lease Term (2) | TI and Incentives per Sq. Ft. (3) | Contractual Rent Per Sq. Ft. (4) | Prior Contractual Rent Per Sq. Ft. (5) | Straight-lined Basis Increase (Decrease) Over Prior Rent | ||||||||||||||||||||||||||||||||||||||
Comparable (1) | ||||||||||||||||||||||||||||||||||||||||||||
Renewal Leases | 52 | 163,415 | 4.2 | $ | 1.06 | $ | 18.16 | $ | 17.84 | 9.6 | % | |||||||||||||||||||||||||||||||||
New Leases | 14 | 26,663 | 7.5 | 18.00 | 24.72 | 23.10 | 12.7 | % | ||||||||||||||||||||||||||||||||||||
Total | 66 | 190,078 | 4.6 | $ | 3.44 | $ | 19.08 | $ | 18.57 | 10.1 | % | |||||||||||||||||||||||||||||||||
Number of Leases Signed | GLA Signed | Weighted Average Lease Term (2) | TI and Incentives per Sq. Ft. (3) | Contractual Rent Per Sq. Ft. (4) | ||||||||||||||||||||||||||||||||||||||||
Non-Comparable | ||||||||||||||||||||||||||||||||||||||||||||
Renewal Leases | 4 | 8,965 | 3.4 | $ | 1.15 | $ | 23.74 | |||||||||||||||||||||||||||||||||||||
New Leases | 15 | 17,040 | 4.5 | 15.90 | 32.50 | |||||||||||||||||||||||||||||||||||||||
Total | 19 | 26,005 | 4.1 | $ | 10.82 | $ | 29.48 |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Number of properties owned and operated | 60 | 58 | ||||||||||||
Aggregate GLA (sq. ft.)(1) | 4,953,571 | 4,848,652 | ||||||||||||
Ending occupancy rate - operating portfolio (1) | 91 | % | 89 | % | ||||||||||
Ending occupancy rate | 91 | % | 89 | % | ||||||||||
Total revenues | $ | 34,123 | $ | 29,045 | ||||||||||
Total operating expenses | 21,051 | 21,524 | ||||||||||||
Total other expense | 6,062 | 6,082 | ||||||||||||
Income before equity investment in real estate partnership and income tax | 7,010 | 1,439 | ||||||||||||
Equity in earnings of real estate partnership | 280 | 89 | ||||||||||||
Provision for income tax | (101) | (87) | ||||||||||||
Net income | 7,189 | 1,441 | ||||||||||||
Less: Net income attributable to noncontrolling interests | 111 | 26 | ||||||||||||
Net income attributable to Whitestone REIT | $ | 7,078 | $ | 1,415 | ||||||||||
Funds from operations(2) | $ | 15,466 | $ | 8,825 | ||||||||||
Property net operating income(3) | 25,080 | 21,139 | ||||||||||||
Distributions paid on common shares and OP units | 5,351 | 4,562 | ||||||||||||
Distributions per common share and OP unit | $ | 0.1075 | $ | 0.1058 | ||||||||||
Distributions paid as a percentage of funds from operations | 35 | % | 52 | % |
Three Months Ended March 31, | ||||||||||||||||||||||||||
Revenue | 2022 | 2021 | Change | % Change | ||||||||||||||||||||||
Same Store | ||||||||||||||||||||||||||
Rental revenues (1) | $ | 23,510 | $ | 21,626 | $ | 1,884 | 9 | % | ||||||||||||||||||
Recoveries (2) | 8,869 | 7,598 | 1,271 | 17 | % | |||||||||||||||||||||
Bad debt (3) | (372) | (529) | 157 | (30) | % | |||||||||||||||||||||
Total rental | 32,007 | 28,695 | 3,312 | 12 | % | |||||||||||||||||||||
Other revenues | 176 | 210 | (34) | (16) | % | |||||||||||||||||||||
Same Store Total | 32,183 | 28,905 | 3,278 | 11 | % | |||||||||||||||||||||
Non-Same Store and Management Fees | ||||||||||||||||||||||||||
Rental revenues (4) | 1,334 | — | 1,334 | Not meaningful | ||||||||||||||||||||||
Recoveries (4) | 468 | — | 468 | Not meaningful | ||||||||||||||||||||||
Bad debt (4) | (1) | — | (1) | Not meaningful | ||||||||||||||||||||||
Total rental | 1,801 | — | 1,801 | Not meaningful | ||||||||||||||||||||||
Other revenues (4) | (1) | — | (1) | Not meaningful | ||||||||||||||||||||||
Management fees | 140 | 140 | — | — | % | |||||||||||||||||||||
Non-Same Store and Management Fees Total | 1,940 | 140 | 1,800 | 1,286 | % | |||||||||||||||||||||
Total revenue | $ | 34,123 | $ | 29,045 | $ | 5,078 | 17 | % |
Three Months Ended March 31, | ||||||||||||||||||||||||||
Operating Expenses | 2022 | 2021 | Change | % Change | ||||||||||||||||||||||
Same Store | ||||||||||||||||||||||||||
Operating and maintenance (1) | $ | 5,336 | $ | 4,619 | $ | 717 | 16 | % | ||||||||||||||||||
Real estate taxes | 4,053 | 4,038 | 15 | — | % | |||||||||||||||||||||
Same Store total | 9,389 | 8,657 | 732 | 8 | % | |||||||||||||||||||||
Non-Same Store and affiliated company rents | ||||||||||||||||||||||||||
Operating and maintenance (2) | 197 | — | 197 | Not meaningful | ||||||||||||||||||||||
Real estate taxes (2) | 314 | — | 314 | Not meaningful | ||||||||||||||||||||||
Affiliated company rents (3) | 192 | 220 | (28) | (13) | % | |||||||||||||||||||||
Non-Same Store and affiliated company rents total | 703 | 220 | 483 | 220 | % | |||||||||||||||||||||
Depreciation and amortization | 7,910 | 7,013 | 897 | 13 | % | |||||||||||||||||||||
General and administrative (4) | 3,049 | 5,634 | (2,585) | (46) | % | |||||||||||||||||||||
Total operating expenses | $ | 21,051 | $ | 21,524 | $ | (473) | (2) | % |
Three Months Ended March 31, | ||||||||||||||||||||||||||
Other Expenses (Income) | 2022 | 2021 | Change | % Change | ||||||||||||||||||||||
Interest expense | $ | 6,061 | $ | 6,132 | $ | (71) | (1) | % | ||||||||||||||||||
(Gain) loss on sale or disposal of assets, net | 15 | (1) | 16 | (1,600) | % | |||||||||||||||||||||
Interest, dividend and other investment income | (14) | (49) | 35 | (71) | % | |||||||||||||||||||||
Total other expense | $ | 6,062 | $ | 6,082 | $ | (20) | — | % |
Three Months Ended March 31, | Increase | % Increase | ||||||||||||||||||||||||
2022 | 2021 | (Decrease) | (Decrease) | |||||||||||||||||||||||
Same Store (53 properties, excluding development land) | ||||||||||||||||||||||||||
Property revenues | ||||||||||||||||||||||||||
Rental | $ | 32,007 | $ | 28,695 | $ | 3,312 | 12 | % | ||||||||||||||||||
Management, transaction and other fees | 176 | 210 | (34) | (16) | % | |||||||||||||||||||||
Total property revenues | 32,183 | 28,905 | 3,278 | 11 | % | |||||||||||||||||||||
Property expenses | ||||||||||||||||||||||||||
Property operation and maintenance | 5,336 | 4,619 | 717 | 16 | % | |||||||||||||||||||||
Real estate taxes | 4,053 | 4,038 | 15 | — | % | |||||||||||||||||||||
Total property expenses | 9,389 | 8,657 | 732 | 8 | % | |||||||||||||||||||||
Total property revenues less total property expenses | 22,794 | 20,248 | 2,546 | 13 | % | |||||||||||||||||||||
Same Store straight-line rent adjustments | (238) | (210) | (28) | 13 | % | |||||||||||||||||||||
Same Store amortization of above/below market rents | (229) | (201) | (28) | 14 | % | |||||||||||||||||||||
Same Store lease termination fees | (9) | (76) | 67 | (88) | % | |||||||||||||||||||||
Same Store NOI(1) | $ | 22,318 | $ | 19,761 | $ | 2,557 | 13 | % | ||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||
PROPERTY NET OPERATING INCOME (“NOI”) | 2022 | 2021 | ||||||||||||
Net income attributable to Whitestone REIT | $ | 7,078 | $ | 1,415 | ||||||||||
General and administrative expenses | 3,049 | 5,634 | ||||||||||||
Depreciation and amortization | 7,910 | 7,013 | ||||||||||||
Equity in earnings of real estate partnership | (280) | (89) | ||||||||||||
Interest expense | 6,061 | 6,132 | ||||||||||||
Interest, dividend and other investment income | (14) | (49) | ||||||||||||
Provision for income taxes | 101 | 87 | ||||||||||||
Management fee, net of related expenses | 52 | 80 | ||||||||||||
Loss on sale or disposal of assets, net | 15 | (1) | ||||||||||||
NOI of real estate partnership (pro rata) | 997 | 891 | ||||||||||||
Net income attributable to noncontrolling interests | 111 | 26 | ||||||||||||
NOI | $ | 25,080 | $ | 21,139 | ||||||||||
Non-Same Store NOI (1) | (1,289) | — | ||||||||||||
NOI of real estate partnership (pro rata) | (997) | (891) | ||||||||||||
NOI less Non-Same Store NOI and NOI of real estate partnership (pro rata) | 22,794 | 20,248 | ||||||||||||
Same Store straight-line rent adjustments | (238) | (210) | ||||||||||||
Same Store amortization of above/below market rents | (229) | (201) | ||||||||||||
Same Store lease termination fees | (9) | (76) | ||||||||||||
Same Store NOI (2) | $ | 22,318 | $ | 19,761 |
Three Months Ended March 31, | ||||||||||||||
FFO (NAREIT) | 2022 | 2021 | ||||||||||||
Net income attributable to Whitestone REIT | $ | 7,078 | $ | 1,415 | ||||||||||
Adjustments to reconcile to FFO:(1) | ||||||||||||||
Depreciation and amortization of real estate | 7,868 | 6,980 | ||||||||||||
Depreciation and amortization of real estate assets of real estate partnership (pro rata) | 394 | 405 | ||||||||||||
(Gain) loss on sale or disposal of assets, net | 15 | (1) | ||||||||||||
Net income attributable to noncontrolling interests | 111 | 26 | ||||||||||||
FFO (NAREIT) | $ | 15,466 | $ | 8,825 |
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
PROPERTY NET OPERATING INCOME | 2022 | 2021 | ||||||||||||
Net income attributable to Whitestone REIT | $ | 7,078 | $ | 1,415 | ||||||||||
General and administrative expenses | 3,049 | 5,634 | ||||||||||||
Depreciation and amortization | 7,910 | 7,013 | ||||||||||||
Equity in earnings of real estate partnership | (280) | (89) | ||||||||||||
Interest expense | 6,061 | 6,132 | ||||||||||||
Interest, dividend and other investment income | (14) | (49) | ||||||||||||
Provision for income taxes | 101 | 87 | ||||||||||||
Management fee, net of related expenses | 52 | 80 | ||||||||||||
(Gain) loss on sale or disposal of assets, net | 15 | (1) | ||||||||||||
NOI of real estate partnership (pro rata) | 997 | 891 | ||||||||||||
Net income attributable to noncontrolling interests | 111 | 26 | ||||||||||||
NOI | $ | 25,080 | $ | 21,139 |
Description | March 31, 2022 | December 31, 2021 | ||||||||||||
Fixed rate notes | ||||||||||||||
$100.0 million, 1.73% plus 1.35% to 1.90% Note, due October 30, 2022 (1) | $ | 100,000 | $ | 100,000 | ||||||||||
$165.0 million, 2.24% plus 1.35% to 1.90% Note, due January 31, 2024 (2) | 165,000 | 165,000 | ||||||||||||
$80.0 million, 3.72% Note, due June 1, 2027 | 80,000 | 80,000 | ||||||||||||
$19.0 million 4.15% Note, due December 1, 2024 | 18,272 | 18,358 | ||||||||||||
$20.2 million 4.28% Note, due June 6, 2023 | 17,699 | 17,808 | ||||||||||||
$14.0 million 4.34% Note, due September 11, 2024 | 12,910 | 12,978 | ||||||||||||
$14.3 million 4.34% Note, due September 11, 2024 | 13,708 | 13,773 | ||||||||||||
$15.1 million 4.99% Note, due January 6, 2024 | 13,838 | 13,907 | ||||||||||||
$2.6 million 5.46% Note, due October 1, 2023 | 2,275 | 2,289 | ||||||||||||
$50.0 million, 5.09% Note, due March 22, 2029 | 50,000 | 50,000 | ||||||||||||
$50.0 million, 5.17% Note, due March 22, 2029 | 50,000 | 50,000 | ||||||||||||
$1.8 million 3.15% Note, due November 28, 2022 | 1,394 | — | ||||||||||||
Floating rate notes | ||||||||||||||
Unsecured line of credit, LIBOR plus 1.40% to 1.90%, due January 31, 2023 | 119,500 | 119,500 | ||||||||||||
Total notes payable principal | 644,596 | 643,613 | ||||||||||||
Less deferred financing costs, net of accumulated amortization | (720) | (771) | ||||||||||||
Total notes payable | $ | 643,876 | $ | 642,842 |
Year | Amount Due | |||||||
2022 (remaining) | $ | 102,945 | ||||||
2023 | 147,363 | |||||||
2024 | 228,574 | |||||||
2025 | 17,143 | |||||||
2026 | 17,143 | |||||||
Thereafter | 131,428 | |||||||
Total | $ | 644,596 |
Three Months Ended March 31, | |||||||||||||||||
2022 | 2021 | ||||||||||||||||
Capital expenditures: | |||||||||||||||||
Tenant improvements and allowances | $ | 2,592 | $ | 475 | |||||||||||||
Developments / redevelopments | 385 | 452 | |||||||||||||||
Leasing commissions and costs | 633 | 799 | |||||||||||||||
Maintenance capital expenditures | 382 | 601 | |||||||||||||||
Total capital expenditures | $ | 3,992 | $ | 2,327 |
Common Shares | Noncontrolling OP Unit Holders | Total | ||||||||||||||||||||||||||||||
Quarter Paid | Distributions Per Common Share | Amount Paid | Distributions Per OP Unit | Amount Paid | Amount Paid | |||||||||||||||||||||||||||
2022 | ||||||||||||||||||||||||||||||||
First Quarter | $ | 0.1075 | $ | 5,268 | $ | 0.1075 | $ | 83 | $ | 5,351 | ||||||||||||||||||||||
Total | $ | 0.1075 | $ | 5,268 | $ | 0.1075 | $ | 83 | $ | 5,351 | ||||||||||||||||||||||
2021 | ||||||||||||||||||||||||||||||||
Fourth Quarter | $ | 0.1075 | $ | 5,257 | $ | 0.1075 | $ | 83 | $ | 5,340 | ||||||||||||||||||||||
Third Quarter | 0.1075 | 4,981 | 0.1075 | 83 | 5,064 | |||||||||||||||||||||||||||
Second Quarter | 0.1075 | 4,602 | 0.1075 | 83 | 4,685 | |||||||||||||||||||||||||||
First Quarter | 0.1058 | 4,480 | 0.1058 | 82 | 4,562 | |||||||||||||||||||||||||||
Total | $ | 0.4283 | $ | 19,320 | $ | 0.4283 | $ | 331 | $ | 19,651 |
Period | Total Number of Shares Purchased (1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs | ||||||||||||||||||||||
January 1, 2022 through January 31, 2022 | — | $ | — | N/A | N/A | |||||||||||||||||||||
February 1, 2022 through February 28, 2022 | — | — | N/A | N/A | ||||||||||||||||||||||
March 1, 2022 through March 31, 2022 | — | — | N/A | N/A | ||||||||||||||||||||||
Total | — | $ | — |
EXHIBIT INDEX |
Exhibit No. | Description |
101 | The following financial information of the Registrant for the quarter ended March 31, 2022, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets as of March 31, 2022 (unaudited) and December 31, 2021, (ii) the Consolidated Statements of Operations and Comprehensive Income for the three months ended March 31, 2022 and 2021 (unaudited), (iii) the Consolidated Statements of Changes in Equity for the three months ended March 31 and March 31, 2022 and 2021 (unaudited), (iv) the Consolidated Statement of Cash Flows for the three months ended March 31, 2022 and 2021 (unaudited) and (v) the Notes to the Consolidated Financial Statements (unaudited). |
104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. |
WHITESTONE REIT | ||||||||||||||
Date: | May 6, 2022 | /s/ David K. Holeman | ||||||||||||
David K. Holeman | ||||||||||||||
Chief Executive Officer | ||||||||||||||
(Principal Executive Officer) |
Date: | May 6, 2022 | /s/ John S. Hogan | ||||||||||||
John S. Hogan | ||||||||||||||
Chief Financial Officer | ||||||||||||||
(Principal Financial and Principal Accounting Officer) |
/s/ David K. Holeman | ||
David K. Holeman | ||
Chief Executive Officer |
/s/ John S. Hogan | ||
John S. Hogan | ||
Chief Financial Officer |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred shares, par value per share (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred shares, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred shares, shares issued (in shares) | 0 | 0 |
Preferred shares, shares outstanding (in shares) | 0 | 0 |
Common shares, par value per share (in dollars per share) | $ 0.001 | |
Common shares, authorized (in shares) | 400,000,000 | 400,000,000 |
Common shares, issued (in shares) | 49,146,223 | 49,144,153 |
Common shares, outstanding (in shares) | 49,146,223 | 49,144,153 |
Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Revenues | ||
Rental | $ 33,808 | $ 28,695 |
Management, transaction, and other fees | 315 | 350 |
Total revenues | 34,123 | 29,045 |
Operating expenses | ||
Depreciation and amortization | 7,910 | 7,013 |
Operating and maintenance | 5,725 | 4,839 |
Real estate taxes | 4,367 | 4,038 |
General and administrative | 3,049 | 5,634 |
Total operating expenses | 21,051 | 21,524 |
Other expenses (income) | ||
Interest expense | 6,061 | 6,132 |
(Gain) loss on sale or disposal of assets, net | 15 | (1) |
Interest, dividend and other investment income | (14) | (49) |
Total other expenses | 6,062 | 6,082 |
Income before equity investment in real estate partnership and income tax | 7,010 | 1,439 |
Equity in earnings of real estate partnership | 280 | 89 |
Provision for income tax | (101) | (87) |
Net income | 7,189 | 1,441 |
Less: Net income attributable to noncontrolling interests | 111 | 26 |
Net income attributable to Whitestone REIT | $ 7,078 | $ 1,415 |
Basic Earnings Per Share: | ||
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares (in dollars per share) | $ 0.14 | $ 0.03 |
Diluted Earnings Per Share: | ||
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares (in dollars per share) | $ 0.14 | $ 0.03 |
Weighted average number of common shares outstanding: | ||
Basic (in shares) | 49,145 | 42,495 |
Diluted (in shares) | 50,306 | 43,331 |
Consolidated Statements of Comprehensive Income | ||
Net income | $ 7,189 | $ 1,441 |
Other comprehensive income | ||
Unrealized gain on cash flow hedging activities | 5,986 | 2,221 |
Comprehensive income | 13,175 | 3,662 |
Less: Net income attributable to noncontrolling interests | 111 | 26 |
Less: Comprehensive income attributable to noncontrolling interests | 92 | 41 |
Comprehensive income attributable to Whitestone REIT | 12,972 | 3,595 |
Rental Revenues | ||
Rental revenues | 24,844 | 21,626 |
Recoveries | 9,337 | 7,598 |
Bad debt | (373) | (529) |
Total rental | $ 33,808 | $ 28,695 |
Consolidated Statement of Changes in Equity - USD ($) $ in Thousands |
Total |
OP Units |
Common Stock |
Additional Paid-In Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Gain (Loss) |
Total Shareholders' Equity |
Noncontrolling Interests |
||
---|---|---|---|---|---|---|---|---|---|---|
Beginning Balance (in shares) at Dec. 31, 2020 | 42,391,000 | |||||||||
Beginning Balance (in units) at Dec. 31, 2020 | 773,000 | |||||||||
Beginning Balance at Dec. 31, 2020 | $ 338,326 | $ 42 | $ 562,250 | $ (215,809) | $ (14,400) | $ 332,083 | $ 6,243 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Exchange of noncontrolling interest OP units for common shares (in shares) | 0 | 0 | ||||||||
Exchange of noncontrolling interest OP units for common shares | 0 | 0 | 0 | $ 0 | ||||||
Issuance of common shares - ATM Program, net of offering costs (in shares) | 0 | |||||||||
Issuance of common shares - ATM Program, net of offering costs | 0 | 0 | 0 | |||||||
Exchange offer costs | 0 | 0 | 0 | |||||||
Issuance of shares under dividend reinvestment plan (in shares) | 2,000 | |||||||||
Issuance of shares under dividend reinvestment plan | 15 | 15 | 15 | |||||||
Repurchase of common shares (in shares) | [1] | (37,000) | ||||||||
Repurchase of common shares | [1] | (324) | (324) | (324) | ||||||
Share-based compensation (in shares) | 223,000 | |||||||||
Share-based compensation | 1,398 | $ 1 | 1,397 | 1,398 | ||||||
Distributions | (4,705) | (4,622) | (4,622) | (83) | ||||||
Unrealized loss on change in value of cash flow hedge | 2,221 | 2,180 | 2,180 | 41 | ||||||
Net income | 1,441 | 1,415 | 1,415 | $ 26 | ||||||
Ending Balance (in shares) at Mar. 31, 2021 | 42,579,000 | |||||||||
Ending Balance (in units) at Mar. 31, 2021 | 773,000 | |||||||||
Ending Balance at Mar. 31, 2021 | $ 338,372 | $ 43 | 563,338 | (219,016) | (12,220) | 332,145 | $ 6,227 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Distributions (in usd per share) | $ 0.1075 | |||||||||
Beginning Balance (in shares) at Dec. 31, 2021 | 49,144,153 | 49,144,000 | ||||||||
Beginning Balance (in units) at Dec. 31, 2021 | 49,793,803 | 771,000 | ||||||||
Beginning Balance at Dec. 31, 2021 | $ 399,038 | $ 48 | 623,462 | (223,973) | (6,754) | 392,783 | $ 6,255 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Exchange of noncontrolling interest OP units for common shares (in shares) | (1,000) | (1,000) | ||||||||
Exchange of noncontrolling interest OP units for common shares | 0 | 0 | 0 | $ 0 | ||||||
Issuance of common shares - ATM Program, net of offering costs (in shares) | 0 | |||||||||
Issuance of common shares - ATM Program, net of offering costs | 0 | 0 | 0 | |||||||
Exchange offer costs | 0 | 0 | 0 | |||||||
Issuance of shares under dividend reinvestment plan (in shares) | 1,000 | |||||||||
Issuance of shares under dividend reinvestment plan | 15 | 15 | 15 | |||||||
Repurchase of common shares (in shares) | [1] | 0 | ||||||||
Repurchase of common shares | [1] | 0 | 0 | 0 | ||||||
Share-based compensation (in shares) | 0 | |||||||||
Share-based compensation | (1,413) | $ 0 | (1,413) | (1,413) | ||||||
Distributions | (5,989) | (5,897) | (5,897) | (92) | ||||||
Unrealized loss on change in value of cash flow hedge | 5,986 | 5,894 | 5,894 | 92 | ||||||
Net income | $ 7,189 | 7,078 | 7,078 | $ 111 | ||||||
Ending Balance (in shares) at Mar. 31, 2022 | 49,146,223 | 49,146,000 | ||||||||
Ending Balance (in units) at Mar. 31, 2022 | 49,795,151 | 770,000 | ||||||||
Ending Balance at Mar. 31, 2022 | $ 404,826 | $ 48 | $ 622,064 | $ (222,792) | $ (860) | $ 398,460 | $ 6,366 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Distributions (in usd per share) | $ 0.1075 | $ 0.1075 | ||||||||
|
Consolidated Statement of Changes in Equity Consolidated Statement of Changes in Equity (Parenthetical) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Distributions (in usd per share) | $ 0.1075 | |
OP Units | ||
Distributions (in usd per share) | $ 0.1075 | $ 0.1075 |
Consolidated Statements of Cash Flows - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|||
Cash flows from operating activities: | ||||
Net income | $ 7,189 | $ 1,441 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 7,911 | 7,013 | ||
Amortization of deferred loan costs | 274 | 274 | ||
(Gain) loss on sale or disposal of assets, net | 15 | (1) | ||
Bad debt | 372 | 529 | ||
Share-based compensation | (1,413) | 1,398 | ||
Equity in earnings of real estate partnership | (280) | (89) | ||
Changes in operating assets and liabilities: | ||||
Escrows and acquisition deposits | 1,874 | 2,352 | ||
Accrued rents and accounts receivable | (1,913) | (829) | ||
Receivable due from related party | (164) | (396) | ||
Unamortized lease commissions, legal fees and loan costs | (697) | (844) | ||
Prepaid expenses and other assets | 295 | 611 | ||
Accounts payable and accrued expenses | (8,781) | (7,534) | ||
Payable due to related party | 210 | 35 | ||
Tenants' security deposits | 23 | 143 | ||
Net cash provided by operating activities | 4,915 | 4,103 | ||
Cash flows from investing activities: | ||||
Additions to real estate | (3,359) | (1,528) | ||
Net cash used in investing activities | (3,359) | (1,528) | ||
Cash flows from financing activities: | ||||
Distributions paid to common shareholders | (5,268) | (4,480) | ||
Distributions paid to OP unit holders | (83) | (82) | ||
Repayments of notes payable | (863) | (719) | ||
Repurchase of common shares | 0 | (324) | ||
Net cash used in financing activities | (6,214) | (5,605) | ||
Net decrease in cash, cash equivalents and restricted cash | (4,658) | (3,030) | ||
Cash, cash equivalents and restricted cash at beginning of period | 15,914 | 25,956 | ||
Cash, cash equivalents and restricted cash at end of period | [1] | 11,256 | 22,926 | |
Supplemental disclosure of cash flow information: | ||||
Cash paid for interest | 5,772 | 5,936 | ||
Non cash investing and financing activities: | ||||
Disposal of fully depreciated real estate | 20 | 3 | ||
Financed insurance premiums | 1,846 | 1,712 | ||
Value of shares issued under dividend reinvestment plan | 15 | 15 | ||
Change in fair value of cash flow hedge | 5,986 | 2,221 | ||
Cash, cash equivalents and restricted cash | ||||
Cash and cash equivalents | 11,136 | 22,820 | ||
Restricted cash | 120 | 106 | ||
Total cash, cash equivalents and restricted cash | [1] | $ 11,256 | $ 22,926 | |
|
Interim Financial Statements |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Interim Financial Statements | INTERIM FINANCIAL STATEMENTS The consolidated financial statements included in this report are unaudited; however, amounts presented in the consolidated balance sheet as of December 31, 2021 are derived from our audited consolidated financial statements as of that date. The unaudited consolidated financial statements as of and for the period ended March 31, 2022 have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information on a basis consistent with the annual audited consolidated financial statements and with the instructions to Form 10-Q. The consolidated financial statements presented herein reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of the financial position of Whitestone and our subsidiaries as of March 31, 2022 and December 31, 2021, and the results of operations for the three month periods ended March 31, 2022 and 2021, the consolidated statements of changes in equity for the three month periods ended March 31, 2022 and 2021 and cash flows for the three month periods ended March 31, 2022 and 2021. All of these adjustments are of a normal recurring nature. The results of operations for the interim periods are not necessarily indicative of the results expected for a full year. The statements should be read in conjunction with the audited consolidated financial statements and the notes thereto which are included in our Annual Report on Form 10-K for the year ended December 31, 2021. Business. Whitestone was formed as a real estate investment trust (“REIT”) pursuant to the Texas Real Estate Investment Trust Act on August 20, 1998. In July 2004, we changed our state of organization from Texas to Maryland pursuant to a merger where we merged directly with and into a Maryland REIT formed for the sole purpose of the reorganization and the conversion of each of the outstanding common shares of beneficial interest of the Texas entity into 1.42857 common shares of beneficial interest of the Maryland entity. We serve as the general partner of Whitestone REIT Operating Partnership, L.P. (the “Operating Partnership”), which was formed on December 31, 1998 as a Delaware limited partnership. We currently conduct substantially all of our operations and activities through the Operating Partnership. As the general partner of the Operating Partnership, we have the exclusive power to manage and conduct the business of the Operating Partnership, subject to certain customary exceptions. As of March 31, 2022 and December 31, 2021, Whitestone wholly owned 60 commercial properties in and around Austin, Chicago, Dallas-Fort Worth, Houston, Phoenix and San Antonio. As of March 31, 2022, these properties consist of: Consolidated Operating Portfolio •53 wholly owned properties that meet our Community Centered Properties® strategy; and Redevelopment, New Acquisitions Portfolio •two wholly owned properties, Lakeside Market and Anderson Arbor, that meet our Community Centered Properties® strategy containing approximately 0.2 and 0.1 million square feet of GLA and having a total carrying amount (net of accumulated depreciation) of $52.8 and $28.0 million, respectively. •five parcels of land held for future development. As of March 31, 2022, we, through our investment in Pillarstone Capital REIT Operating Partnership LP (“Pillarstone” or “Pillarstone OP”), owned a majority interest in eight properties that do not meet our Community Centered Property® strategy containing approximately 0.9 million square feet of GLA (the “Pillarstone Properties”). We own 81.4% of the total outstanding units of Pillarstone OP, which we account for using the equity method. We also manage the day-to-day operations of Pillarstone OP. The global health crisis caused by COVID-19 and the related responses intended to control its spread may continue to adversely affect business activity, particularly relating to our retail tenants, across the markets in which we operate. In light of the changing nature of the COVID-19 pandemic, we are unable to predict the extent that its impact will have on our financial condition, results of operations and cash flows.
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Summary of Significant Accounting Policies |
3 Months Ended |
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Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of 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 March 31, 2022 and December 31, 2021, we owned a majority of the partnership interests in the Operating Partnership. Consequently, the accompanying consolidated financial statements include the accounts of the Operating Partnership. Noncontrolling interest in the accompanying consolidated financial statements represents the share of equity and earnings of the Operating Partnership allocable to holders of partnership interests other than us. Net income or loss is allocated to noncontrolling interests based on the weighted-average percentage ownership of the Operating Partnership during the period. Issuance of additional common shares of beneficial interest in Whitestone (the “common shares”) and units of limited partnership interest in the Operating Partnership that are convertible into cash or, at our option, common shares on a one-for-one basis (the “OP units”) changes the percentage of ownership interests of both the noncontrolling interests and Whitestone. Equity Method. In accordance with ASU 2014-09 (“Topic 606”) and ASC 610, “Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets,” the Company recognizes its investment in Pillarstone OP under the equity method. 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 grant date fair value of common share units included in share-based compensation expense, 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. In particular, the COVID-19 pandemic has adversely impacted and is likely to further adversely impact the Company’s business and markets, including the Company’s operations and the operations of its tenants. The full extent to which the pandemic will directly or indirectly impact the Company’s business, results of operations and financial condition, including revenues, expenses, reserves and allowances, fair value measurements, and asset impairment charges, will depend on future developments that are highly uncertain and difficult to predict. These developments include, but are not limited to, the duration and spread of the pandemic, its severity in our markets and elsewhere, the impact on our tenants’ businesses and financial condition, governmental actions to contain the spread of the pandemic and respond to the reduction in global economic activity, and how quickly and to what extent normal economic and operating conditions can resume. 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. Restricted Cash. We classify all cash pledged as collateral to secure certain obligations and all cash whose use is limited as restricted cash. During 2015, pursuant to the terms of our $15.1 million 4.99% Note, due January 6, 2024 (see Note 7 (Debt)), which is collateralized by our Anthem Marketplace property, we were required by the lenders thereunder to establish a cash management account controlled by the lenders to collect all amounts generated by our Anthem Marketplace property in order to collateralize such promissory note. Derivative Instruments and Hedging Activities. We utilize derivative financial instruments, principally interest rate swaps, to manage our exposure to fluctuations in interest rates. We have established policies and procedures for risk assessment, and the approval, reporting and monitoring of derivative financial instruments. We recognize our interest rate swaps as cash flow hedges with the effective portion of the changes in fair value recorded in comprehensive income and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. Any ineffective portion of a cash flow hedges’ change in fair value is recorded immediately into earnings. Our cash flow hedges are determined using Level 2 inputs under ASC 820, “Fair Value Measurements and Disclosures.” Level 2 inputs represent quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable. As of March 31, 2022, we consider our cash flow hedges to be highly effective. 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 (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 March 31, 2022, approximately $99,000 and $75,000 in interest expense and real estate taxes, respectively, were capitalized. For the three months ended March 31, 2021, approximately $102,000 and $79,000 in interest expense and real estate taxes, respectively, were capitalized. Share-Based Compensation. From time to time, we grant 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 2018 Long-Term Equity Incentive Ownership Plan (the “2018 Plan”). 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 $(1,329,000) and $1,468,000 in share-based compensation net of forfeitures for the three months ended March 31, 2022 and 2021, respectively. On January 18, 2022, the Board of Trustees terminated James Mastandrea, with cause, from his position as Chief Executive Officer. Mr. Mastandrea was also replaced as Chairman of the Board. Following his termination, the Board of Trustees appointed Dave Holeman, previously our Chief Financial Officer, as Chief Executive Officer. The Company also recently replaced its Chief Operating Officer and Executive Vice President of Acquisitions and Asset Management. As a result of these changes, we recognized a reduction of share-based compensation of $2.2 million during the three months ended March 31, 2022 due to forfeitures. We recognize forfeitures as they occur. Noncontrolling Interests. Noncontrolling interests are the portion of equity in a subsidiary not attributable to a parent. 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 and comprehensive income, subsidiaries are reported at the consolidated amount, including both the amount attributable to Whitestone and noncontrolling interests. The consolidated statements 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. Accrued Rents and Accounts Receivable. Included in accrued rents and accounts receivable are base rents, tenant reimbursements and receivables attributable to recording rents on a straight-line basis. We review the collectability of charges under our tenant operating leases on a regular basis, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area where the property is located, including the impact of the COVID-19 pandemic on tenants’ businesses and financial condition. We recognize an adjustment to rental revenue if we deem it probable that the receivable will not be collected. Our review of collectability under our operating leases includes any accrued rental revenues related to the straight-line method of reporting rental revenue. As of March 31, 2022 and December 31, 2021, we had an allowance for uncollectible accounts of $15.3 million and $14.9 million, respectively. During the three months ending March 31, 2022 and 2021, we recorded an adjustment to rental revenue for bad debt, exclusive of straight-line rent reserve adjustments, in the amount of a $0.4 million decrease to revenue and a $0.5 million decrease to revenue, respectively. The three months ended March 31, 2022 included 77 cash basis tenants, resulting in decreases to rental revenue for bad debt and straight-line rent adjustments of $0.23 million and $0.4 million, respectively, and the three months ended March 31, 2021 included 67 cash basis tenants, resulting in decreases to rental revenue for bad debt and straight-line rent adjustments of $0.5 million and $0.1 million, respectively. Revenue Recognition. All leases on our properties are classified as operating leases, and the related rental income is recognized on a straight-line basis over the terms of the related leases. Differences between rental income earned and amounts due per the respective lease agreements are capitalized or charged, as applicable, to accrued rents and accounts receivable. Percentage rents are recognized as rental income when the thresholds upon which they are based have been met. Recoveries from tenants for taxes, insurance, and other operating expenses are recognized as revenues in the period the corresponding costs are incurred. We combine lease and nonlease components in lease contracts, which includes combining base rent, recoveries, and percentage rents into a single line item, Rental, within the consolidated statements of operations and comprehensive income. Additionally, we have tenants who pay real estate taxes directly to the taxing authority. We exclude these costs paid directly by the tenant to third parties on our behalf from revenue recognized and the associated property operating expense. Other property income primarily includes amounts recorded in connection with management fees and lease termination fees. Pillarstone OP pays us management fees for property management, leasing and day-to-day advisory and administrative services. Their obligations are satisfied over time. Pillarstone OP is billed monthly and typically pays quarterly. Revenues are governed by the Management Agreements (as defined in Note 6 (Investment in Real Estate Partnership)). Refer to Note 6 (Investment in Real Estate Partnership) for additional information regarding the Management Agreements with Pillarstone OP. Additionally, we recognize lease termination fees in the year that the lease is terminated and collection of the fee is probable. Amounts recorded within other property income are accounted for at the point in time when control of the goods or services transfers to the customer and our performance obligation is satisfied. See our Annual Report on Form 10-K for the year ended December 31, 2021 for further discussion on significant accounting policies. Recent Accounting Pronouncements. In April 2020, the FASB issued guidance on the application of Topic 842, relating to concessions being made by lessors in response to the COVID-19 pandemic. The guidance notes that it would be acceptable for entities to make an election to account for lease concessions relating to the effects of the COVID-19 pandemic consistent with how those concessions would be accounted for under Topic 842 as though enforceable rights and obligations for those concessions existed, even if such enforceable rights and obligations are not explicitly contained in the lease contract. Thus, for concessions relating to the COVID-19 pandemic, an entity would not have to analyze each contract to determine whether enforceable rights and obligations for concessions exist in the contract, and would have the option to apply, or not to apply, the general lease modification guidance in Topic 842 as it stands. We have elected this option to account for lease concessions relating to the effects of the COVID-19 pandemic consistent with how those concessions would be accounted for under Topic 842 as though enforceable rights and obligations for those concessions existed. Therefore, such concessions are not accounted for as a lease modification under Topic 842.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | LEASES As a Lessor. All leases on our properties are classified as noncancelable operating leases, and the related rental income is recognized on a straight-line basis over the terms of the related leases. Differences between rental income earned and amounts due per the respective lease agreements are capitalized or charged, as applicable, to accrued rents and accounts receivable. Percentage rents are recognized as rental income when the thresholds upon which they are based have been met. Recoveries from tenants for taxes, insurance, and other operating expenses are recognized as revenues in the period the corresponding costs are incurred. We combine lease and nonlease components in lease contracts, which includes combining base rent, recoveries, and percentage rents into a single line item, Rental, within the consolidated statements of operations and comprehensive income. A summary of minimum future rents to be received (exclusive of renewals, tenant reimbursements, contingent rents, and collectability adjustments under Topic 842) under noncancelable operating leases in existence as of March 31, 2022 is as follows (in thousands):
(1) These amounts do not reflect future rental revenues from the renewal or replacement of existing leases and exclude reimbursements of operating expenses and rental increases that are not fixed. As a Lessee. We have office space, automobile, and office machine leases, which qualify as operating leases, with remaining lease terms of to three years. The following table summarizes the fixed, future minimum rental payments, excluding variable costs, which are discounted by our weighted average incremental borrowing rates to calculate the lease liabilities for our operating leases in which we are the lessee (in thousands):
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Accrued Rents and Accounts Receivable, Net |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Rents 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 Lease Commissions, Legal Fees and Loan Costs |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unamortized Lease Commissions, Legal Fees and Loan Costs | UNAMORTIZED LEASE COMMISSIONS, LEGAL FEES AND LOAN COSTS Costs which have been deferred consist of the following (in thousands):
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Investment in Real Estate Partnership |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment in Real Estate Partnership | INVESTMENT IN REAL ESTATE PARTNERSHIP On December 8, 2016, we, through our Operating Partnership, entered into a Contribution Agreement (the “Contribution Agreement”) with Pillarstone OP and Pillarstone Capital REIT (“Pillarstone REIT”) pursuant to which we contributed all of the equity interests in four of our wholly-owned subsidiaries that, at the time, owned 14 non-core properties that did not fit our Community Centered Property® strategy (the “Pillarstone Properties”), to Pillarstone OP for aggregate consideration of approximately $84 million, consisting of (1) approximately $18.1 million of Class A units representing limited partnership interests in Pillarstone OP (“Pillarstone OP Units”) and (2) the assumption of approximately $65.9 million of liabilities (collectively, the “Contribution”). In connection with the Contribution, Whitestone TRS, Inc., a subsidiary of the Company (“Whitestone TRS”), entered into a management agreement with the entities that own the contributed Pillarstone Properties (collectively, the “Management Agreements”). Pursuant to the Management Agreements, Whitestone TRS agreed to provide certain property management, leasing and day-to-day advisory and administrative services in exchange for (x) a monthly property management fee equal to 5.0% of the monthly revenues of such Pillarstone Property and (y) a monthly asset management fee equal to 0.125% of GAV of such Pillarstone Property, with the exception of Uptown Tower, in which case services to Pillarstone OP are provided in exchange for (x) a monthly property management fee equal to 3.0% of the monthly revenues of Uptown Tower and (y) a monthly asset management fee equal to 0.125% of GAV of Uptown Tower. The Management Agreements are automatically renewable on a month to month basis; provided that each Management Agreement can be terminated by either party thereto upon not less than thirty days’ prior written notice to the other party. None of the Management Agreements had been terminated as of March 31, 2022. In connection with the Contribution, on December 8, 2016, the Operating Partnership entered into a Tax Protection Agreement with Pillarstone REIT and Pillarstone OP pursuant to which Pillarstone OP agreed to indemnify the Operating Partnership for certain tax liabilities resulting from its recognition of income or gain prior to December 8, 2021 if such liabilities result from a transaction involving a direct or indirect taxable disposition of all or a portion of the Pillarstone Properties or if Pillarstone OP fails to maintain and allocate to the Operating Partnership for taxation purposes minimum levels of liabilities as specified in the Tax Protection Agreement, the result of which causes such recognition of income or gain and the Company incurs taxes that must be paid to maintain its REIT status for federal income tax purposes. The table below presents the real estate partnership investment in which the Company holds an ownership interest (in thousands):
(1) The Company manages these real estate partnership investments and, where applicable, earns acquisition fees, leasing commissions, property management fees, and asset management fees. (2) Representing eight property interests and 926,798 square feet of GLA, as of March 31, 2022 and December 31, 2021. (3) On December 26, 2021, the Board of Trustees of Pillarstone REIT adopted a new rights agreement (the “Pillarstone Rights Agreement”), pursuant to which each holder of Pillarstone REIT common stock received one preferred share purchase right (a “Right”) per common share held as of the applicable record date. Each Right entitles the registered holder to purchase from Pillarstone REIT one one-thousandth (a “Unit”) of a series D preferred share of Pillarstone at a purchase price (“Purchase Price”) of $7.00 per Unit, subject to adjustment. The Rights are exercisable upon the occurrence of certain events as described in the Pillarstone Rights Agreement, including the acquisition by certain holders of 5% or more of the common shares of Pillarstone REIT (an “Acquiring Person”). Upon the acquisition of Pillarstone REIT common shares by an Acquiring Person, each holder of a Right (other than an Acquiring Person), will have the right to receive upon exercise a number of Pillarstone REIT common shares having a market value of two times the Purchase Price. As set forth in the Amended and Restated Limited Partnership Agreement of Pillarstone OP, dated as of December 8, 2016 (the “Pillarstone Partnership Agreement”), we have the contractual right to have our limited partnership interests in Pillarstone redeemed at our discretion. However, upon receipt of a redemption notice, Pillarstone OP has the option of the applicable redemption price in cash, based on the market value of Pillarstone REIT common shares, or in Pillarstone REIT common shares. To the extent we seek to have our partnership units in Pillarstone OP redeemed and Pillarstone OP elects to pay the applicable redemption price in Pillarstone REIT common shares (and such shares represent 5% or more of the outstanding common shares of Pillarstone REIT), the Rights could become exercisable. To the extent the Rights are exercised as a result of our Pillarstone OP units being redeemed for Pillarstone REIT common shares, our ownership interest in Pillarstone REIT would be significantly diluted, which could adversely impact the value of our investment in Pillarstone OP. While we do not believe the overall impact of the Pillarstone Rights Agreement on the value of our investment in Pillarstone OP is material, we cannot reasonably estimate a range of possible loss at this time. The table below presents the Company’s share of net income from its investment in the real estate partnership which is included in equity in earnings of real estate partnership, net on the Company’s consolidated statements of operations and comprehensive income (in thousands):
Summarized financial information for the Company’s investment in real estate partnership is as follows (in thousands):
The amortization of the basis difference between the cost of investment and the Company's share of underlying net book value for both of the three months periods ended March 31, 2022 and 2021 is $27,000. The Company amortized the difference into equity in earnings of real estate partnership on the consolidated statements of operations and comprehensive income. The Company has evaluated its guarantee to Pillarstone OP pursuant to ASC 460, “Guarantees,” and has determined the guarantee to be a performance guarantee, for which ASC 460 contains initial recognition and measurement requirements, and related disclosure requirements. The Company is obligated in two respects: (i) a noncontingent liability, which represents the Company’s obligation to stand ready to perform under the terms of the guarantee in the event that the specified triggering event(s) occur; and (ii) the contingent liability, which represents the Company’s obligation to make future payments if those triggering events occur. The fair value of our loan guarantee to Pillarstone OP is estimated on a Level 3 basis (as provided by ASC 820), using a probability-weighted discounted cash flow analysis based on a discount rate, discounting the loan balance. The Company recognized a noncontingent liability of $462,000 at the inception of the guarantee at fair value which is recorded on the Company’s consolidated balance sheets, net of accumulated amortization. The Company will amortize the guarantee liability into income over seven years. For the three months ended March 31, 2022 and 2021, the amortization of the guarantee liability was approximately $9,000 and $10,000, respectively.
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Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | DEBT Certain subsidiaries of Whitestone are the borrowers under various financing arrangements. These subsidiaries are separate legal entities, and their respective assets and credit are not available to satisfy the debt of Whitestone or any of its other subsidiaries. Debt consisted of the following as of the dates indicated (in thousands):
(1) Promissory note includes an interest rate swap that fixed the LIBOR portion of Term Loan 3 (as defined below) at 1.73%. (2) Promissory note includes an interest rate swap that fixed the LIBOR portion of the interest rate at an average rate of 2.24% for the duration of the term through January 31, 2024. A number of our current debt agreements have an interest rate tied to LIBOR. Some of these agreements provide procedures for determining an alternative base rate in the event that LIBOR is discontinued, but not all do so. Regardless, there can be no assurances as to what alternative base rates may be and whether such base rate will be more or less favorable than LIBOR and any other unforeseen impacts of the discontinuation of LIBOR. The Company is monitoring the developments with respect to the phasing out of LIBOR after 2021 and working with its lenders to ensure any transition away from LIBOR will have minimal impact on its financial condition, but can provide no assurances regarding the impact of the discontinuation of LIBOR. On March 22, 2019, we, through our Operating Partnership, entered into a Note Purchase and Guarantee Agreement (the “Note Agreement”) together with certain subsidiary guarantors as initial guarantor parties thereto (the “Subsidiary Guarantors”) and The Prudential Insurance Company of America and the various other purchasers named therein (collectively, the “Purchasers”) providing for the issuance and sale of $100 million of senior unsecured notes of the Operating Partnership, of which (i) $50 million are designated as 5.09% Series A Senior Notes due March 22, 2029 (the “Series A Notes”) and (ii) $50 million are designated as 5.17% Series B Senior Notes due March 22, 2029 (the “Series B Notes” and, together with the Series A Notes, the “Notes”) pursuant to a private placement that closed on March 22, 2019 (the “Private Placement”). Obligations under the Notes are unconditionally guaranteed by the Company and by the Subsidiary Guarantors. The principal of the Series A Notes will begin to amortize on March 22, 2023 with annual principal payments of approximately $7.1 million. The principal of the Series B Notes will begin to amortize on March 22, 2025 with annual principal payments of $10.0 million. The Notes will pay interest quarterly on the 22nd day of March, June, September and December in each year until maturity. The Operating Partnership may prepay at any time all, or from time to time part of, the Notes, in an amount not less than $1,000,000 in the case of a partial prepayment, at 100% of the principal amount so prepaid, plus a make-whole amount. The make-whole amount is equal to the excess, if any, of the discounted value of the remaining scheduled payments with respect to the Notes being prepaid over the aggregate principal amount of such Notes (as described in the Note Agreement). In addition, in connection with a Change of Control (as defined in the Note Purchase Agreement), the Operating Partnership is required to offer to prepay the Notes at 100% of the principal amount plus accrued and unpaid interest thereon. The Note Agreement contains representations, warranties, covenants, terms and conditions customary for transactions of this type and substantially similar to the Operating Partnership’s existing senior revolving credit facility, including limitations on liens, incurrence of investments, acquisitions, loans and advances and restrictions on dividends and certain other restricted payments. In addition, the Note Agreement contains certain financial covenants substantially similar to the Operating Partnership’s existing senior revolving credit facility, including the following: •maximum total indebtedness to total asset value ratio of 0.60 to 1.00; •maximum secured debt to total asset value ratio of 0.40 to 1.00; •minimum EBITDA (earnings before interest, taxes, depreciation, amortization or extraordinary items) to fixed charges ratio of 1.50 to 1.00; •maximum other recourse debt to total asset value ratio of 0.15 to 1.00; and •maintenance of a minimum tangible net worth (adjusted for accumulated depreciation and amortization) of $372 million plus 75% of the net proceeds from additional equity offerings (as defined therein). In addition, the Note Agreement contains a financial covenant requiring that maximum unsecured debt not exceed the lesser of (i) an amount equal to 60% of the aggregate unencumbered asset value and (ii) the debt service coverage amount (as described in the Note Agreement). That covenant is substantially similar to the borrowing base concept contained in the Operating Partnership’s existing senior revolving credit facility. The Note Agreement also contains default provisions, including defaults for non-payment, breach of representations and warranties, insolvency, non-performance of covenants, cross-defaults with other indebtedness and guarantor defaults. The occurrence of an event of default under the Note Agreement could result in the Purchasers accelerating the payment of all obligations under the Notes. The financial and restrictive covenants and default provisions in the Note Agreement are substantially similar to those contained in the Operating Partnership’s existing credit facility. Net proceeds from the Private Placement were used to refinance existing indebtedness. The Notes have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act. The Notes were sold in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act. On January 31, 2019, we, through our Operating Partnership, entered into an unsecured credit facility (the “2019 Facility”) with the lenders party thereto, Bank of Montreal, as administrative agent (the “Agent”), SunTrust Robinson Humphrey, as syndication agent, and BMO Capital Markets Corp., U.S. Bank National Association, SunTrust Robinson Humphrey and Regions Capital Markets, as co-lead arrangers and joint book runners. The 2019 Facility amended and restated the 2018 Facility (as defined below). The 2019 Facility is comprised of the following three tranches: •$250.0 million unsecured revolving credit facility with a maturity date of January 1, 2023 (the “2019 Revolver”); •$165.0 million unsecured term loan with a maturity date of January 31, 2024 (“Term Loan A”); and •$100.0 million unsecured term loan with a maturity date of October 30, 2022 (“Term Loan B” and together with Term Loan A, the “2019 Term Loans”). Borrowings under the 2019 Facility accrue interest (at the Operating Partnership's option) at a Base Rate or an Adjusted LIBOR plus an applicable margin based upon our then existing leverage. As of March 31, 2022, the interest rate on the 2019 Revolver was 1.65%. The applicable margin for Adjusted LIBOR borrowings ranges from 1.40% to 1.90% for the 2019 Revolver and 1.35% to 1.90% for the 2019 Term Loans. Base Rate means the higher of: (a) the Agent’s prime commercial rate, (b) the sum of (i) the average rate quoted by the Agent by two or more federal funds brokers selected by the Agent for sale to the Agent at face value of federal funds in the secondary market in an amount equal or comparable to the principal amount for which such rate is being determined, plus (ii) 1/2 of 1.00%, and (c) the LIBOR rate for such day plus 1.00%. Adjusted LIBOR means LIBOR divided by one minus the Eurodollar Reserve Percentage. The Eurodollar Reserve Percentage means the maximum reserve percentage at which reserves are imposed by the Board of Governors of the Federal Reserve System on eurocurrency liabilities. Pursuant to the 2019 Facility, in the event of certain circumstances that result in the unavailability of LIBOR, including but not limited to LIBOR no longer being a widely recognized benchmark rate for newly originated dollar loans in the U.S. market, the Operating Partnership and the Agent will establish an alternate interest rate to LIBOR giving due consideration to prevailing market conventions and will amend the 2019 Facility to give effect to such alternate interest rate. The 2019 Facility includes an accordion feature that will allow the Operating Partnership to increase the borrowing capacity by $200.0 million, upon the satisfaction of certain conditions. As of March 31, 2022, subject to any potential future paydowns or increases in the borrowing base, we have $96.2 million remaining availability under the 2019 Revolver. As of March 31, 2022, $384.5 million was drawn on the 2019 Facility and our unused borrowing capacity was $130.0 million, assuming that we use the proceeds of the 2019 Facility to acquire properties, or to repay debt on properties, that are eligible to be included in the unsecured borrowing base. The Company used $446.2 million of proceeds from the 2019 Facility to repay amounts outstanding under the 2018 Facility and intends to use the remaining proceeds from the 2019 Facility for general corporate purposes, including property acquisitions, debt repayment, capital expenditures, the expansion, redevelopment and re-tenanting of properties in its portfolio and working capital. The Company, each direct and indirect material subsidiary of the Operating Partnership and any other subsidiary of the Operating Partnership that is a guarantor under any unsecured ratable debt will serve as a guarantor for funds borrowed by the Operating Partnership under the 2019 Facility. The 2019 Facility contains customary terms and conditions, including, without limitation, customary representations and warranties and affirmative and negative covenants including, without limitation, information reporting requirements, limitations on investments, acquisitions, loans and advances, mergers, consolidations and sales, incurrence of liens, dividends and restricted payments. In addition, the 2019 Facility contains certain financial covenants including the following: •maximum total indebtedness to total asset value ratio of 0.60 to 1.00; •maximum secured debt to total asset value ratio of 0.40 to 1.00; •minimum EBITDA (earnings before interest, taxes, depreciation, amortization or extraordinary items) to fixed charges ratio of 1.50 to 1.00; •maximum other recourse debt to total asset value ratio of 0.15 to 1.00; and •maintenance of a minimum tangible net worth (adjusted for accumulated depreciation and amortization) of $372 million plus 75% of the net proceeds from additional equity offerings (as defined therein). We serve as the guarantor for funds borrowed by the Operating Partnership under the 2019 Facility. The 2019 Facility contains customary terms and conditions, including, without limitation, affirmative and negative covenants such as information reporting requirements, maximum secured indebtedness to total asset value, minimum EBITDA (earnings before interest, taxes, depreciation, amortization or extraordinary items) to fixed charges, and maintenance of a minimum net worth. The 2019 Facility also contains customary events of default with customary notice and cure, including, without limitation, nonpayment, breach of covenant, misrepresentation of representations and warranties in a material respect, cross-default to other major indebtedness, change of control, bankruptcy and loss of REIT tax status. As of March 31, 2022, our $158.7 million in secured debt was collateralized by seven properties with a carrying value of $245.9 million. Our loans contain restrictions that would require the payment of prepayment penalties for the acceleration of outstanding debt and are secured by deeds of trust on certain of our properties and by assignment of the rents and leases associated with those properties. As of March 31, 2022, we were in compliance with all loan covenants. Scheduled maturities of our outstanding debt as of March 31, 2022 were as follows (in thousands):
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Derivatives and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives and Hedging Activities | DERIVATIVES AND HEDGING ACTIVITIES The fair value of our interest rate swaps is as follows (in thousands):
On January 31, 2019, we, through our Operating Partnership, entered into an interest rate swap of $115 million with Bank of Montreal that fixed the LIBOR portion of Term Loan A under the 2019 Facility at 2.43%. Pursuant to the terms of the agreement governing the interest rate swap, Bank of Montreal assigned $22.7 million of the swap to U.S. Bank, National Association, $20.5 million of the swap to Regions Bank, $27.9 million of the swap to SunTrust Bank, and $10.5 million of the swap to Associated Bank. See Note 7 (Debt) for additional information regarding the 2019 Facility. The swap began on November 9, 2020 and matured on February 8, 2021. We designated the interest rate swap as a cash flow hedge with the effective portion of the changes in fair value recorded in comprehensive income. On January 31, 2019, we, through our Operating Partnership, entered into an interest rate swap of $165 million with Bank of Montreal that fixed the LIBOR portion of Term Loan A under the 2019 Facility at 2.43%. Pursuant to the terms of the agreement governing the interest rate swap, Bank of Montreal assigned $32.6 million of the swap to U.S. Bank, National Association, $29.4 million of the swap to Regions Bank, $40.0 million of the swap to SunTrust Bank, and $15.0 million of the swap to Associated Bank. See Note 7 (Debt) for additional information regarding the 2019 Facility. The swap began on February 8, 2021 and will mature on January 31, 2024. 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 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. The Company does not expect any amount of the existing gains or losses to be reclassified into earnings within the next 12 months. On November 19, 2015, we, through our Operating Partnership, entered into an interest rate swap with Bank of Montreal that fixed the LIBOR portion of Term Loan 3 under the 2018 Facility at 1.73%. In the fourth quarter of 2015, pursuant to the terms of the agreement governing the interest rate swap, Bank of Montreal assigned $35.0 million of the swap to U.S. Bank, National Association, and $15.0 million of the swap to SunTrust Bank. See Note 7 (Debt) for additional information regarding the 2018 Facility. The swap began on November 30, 2015 and will mature on October 28, 2022. 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 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. The Company does not expect any amount of the existing gains or losses to be reclassified into earnings within the next 12 months. On November 19, 2015, we, through our Operating Partnership, entered into an interest rate swap with Bank of Montreal that fixed the LIBOR portion of Term Loan 2 under the 2018 Facility at 1.50%. In the fourth quarter of 2015, pursuant to the terms of the agreement governing the interest rate swap, Bank of Montreal assigned $3.8 million of the swap to Regions Bank, $6.5 million of the swap to U.S. Bank, National Association, $14.0 million of the swap to Wells Fargo Bank, National Association, $14.0 million of the swap to Bank of America, N.A., and $5.0 million of the swap to SunTrust Bank. See Note 7 (Debt) for additional information regarding the 2018 Facility. The swap began on December 7, 2015 and matured on January 29, 2021. We designated the interest rate swap as a cash flow hedge with the effective portion of the changes in fair value recorded in comprehensive income. A summary of our interest rate swap activity is as follows (in thousands):
(1) There was no ineffective portion of our interest rate swaps to recognize in earnings for the three months ended March 31, 2022 and 2021.
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Earnings Per Share | EARNINGS PER SHARE Basic earnings per share for our common shareholders is calculated by dividing net income excluding the net income attributable to unvested restricted common shares and the net income attributable to noncontrolling interests, by our weighted average common shares outstanding during the period. Diluted earnings per share is computed by dividing the net income attributable to common shareholders, excluding the net income attributable to unvested restricted common shares and the net income attributable to noncontrolling interests, by the weighted average number of common shares including any dilutive unvested restricted common shares. Certain of our performance-based restricted common shares are considered participating securities that require the use of the two-class method for the computation of basic and diluted earnings per share. During the three months ended March 31, 2022 and 2021, 770,184 and 772,775 OP units, respectively, were excluded from the calculation of diluted earnings per share because their effect would be anti-dilutive.
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Income Taxes |
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Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES With the exception of our taxable REIT subsidiaries, federal income taxes are generally not provided because we intend to and believe we continue to qualify as a REIT under the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and because we have distributed and intend to continue to distribute all of our taxable income to our shareholders. As a REIT, we must distribute at least 90% of our REIT taxable income to our shareholders and meet certain income sources and investment restriction requirements. In addition, REITs are subject to a number of organizational and operational requirements. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax (including any applicable alternative minimum tax) on our taxable income at regular corporate tax rates. |
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | EQUITY Common Shares Under our declaration of trust, as amended, we have authority to issue up to 400,000,000 common shares of beneficial interest, $0.001 par value per share, and up to 50,000,000 preferred shares of beneficial interest, $0.001 par value per share. Equity Offerings On May 31, 2019, we entered into nine equity distribution agreements for an at-the-market equity distribution program (the “2019 equity distribution agreements”) providing for the issuance and sale of up to an aggregate of $100 million of the Company’s common shares pursuant to our Registration Statement on Form S-3 (File No. 333-225007). Actual sales will depend on a variety of factors determined by us from time to time, including (among others) market conditions, the trading price of our common shares, capital needs and our determinations of the appropriate sources of funding for us, and were made in transactions that will be deemed to be “at-the-market” offerings as defined in Rule 415 under the Securities Act. We have no obligation to sell any of our common shares and can at any time suspend offers under the 2019 equity distribution agreements or terminate the 2019 equity distribution agreements. For the three months ended March 31, 2022 and March 31, 2021 we did not sell shares under the 2019 equity distribution agreements. Operating Partnership Units Substantially all of our business is conducted through our Operating Partnership. We are the sole general partner of the Operating Partnership. As of March 31, 2022, we owned a 98.5% interest in the Operating Partnership. Limited partners in the Operating Partnership holding OP units have the right to redeem their OP units for cash or, at our option, common shares at a ratio of one OP unit for one common share. Distributions to OP unit holders are paid at the same rate per unit as distributions per share to holders of Whitestone common shares. As of March 31, 2022 and December 31, 2021, there were 49,795,151 and 49,793,803 OP units outstanding, respectively. We owned 49,025,273 and 49,023,313 OP units as of March 31, 2022 and December 31, 2021, respectively. The balance of the OP units is owned by third parties, including certain members of our board of trustees. Our weighted average share ownership in the Operating Partnership was approximately 98.5% and 98.2% for the three months ended March 31, 2022 and 2021, respectively. During the three months ended March 31, 2022 and 2021, 612 and 0 OP units, respectively, were redeemed for an equal number of common shares. 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 of 2021 and the three months ended March 31, 2022 (in thousands, except per share/per OP unit data):
The Board will regularly reassess the dividend, particularly as there is more clarity on the duration and severity of the COVID-19 pandemic and as business conditions improve. Shareholders' Rights Plan On May 14, 2020, the Board authorized a dividend of one preferred share purchase right (a “Right”) for each outstanding common share of beneficial interest, par value $0.001 per share, of the Company (the “Common Shares”). The dividend is payable on May 26, 2020 (the “Record Date”), to the holders of record of Common Shares as of 5:00 P.M., New York City time, on the Record Date. The description and terms of the Rights are set forth in a rights agreement, dated as of May 14, 2020 (as the same may be amended from time to time, the “Rights Agreement”), between the Company and American Stock Transfer & Trust Company, LLC, as rights agent (the “Rights Agent”). Each Right entitles the registered holder to purchase from the Company one one-thousandth (a “Unit”) of a Series A Preferred Share, par value $0.001 per share (each a “Preferred Share”), of the Company at a purchase price (“Purchase Price”) of $30.00 per Unit, subject to adjustment. The Board adopted the Rights Agreement to ensure that the Board remains in the best position to fulfill its duties and is intended to promote the fair and equal treatment of all shareholders by guarding against opportunistic efforts to capitalize on recent macroeconomic conditions, including open market accumulations or other tactics, aimed at gaining control of the Company without paying an appropriate control premium to deliver sufficient value for all Company shareholders. The Rights will expire on the earliest of (i) the close of business on May 13, 2021, (ii) the time at which the Rights are redeemed pursuant to the Rights Agreement, (iii) the closing of any merger or other acquisition transaction involving the Company that has been approved by the Board, at which time the Rights are terminated, and (iv) the time at which the Rights are exchanged pursuant to the Rights Agreement (such earliest date, the “Expiration Date”). On April 21, 2021, the Company entered into the First Amendment to Rights Agreement (the “First Amendment”) with the Rights Agent. The First Amendment amends the Rights Agreement by and between the Company and the Rights Agent, solely to extend the expiration date of the rights under the Rights Agreement from the close of business on May 13, 2021 to the close of business on May 13, 2022, unless earlier exercised, exchanged, amended, redeemed, or terminated. On February 7, 2022, the Company entered into the Second Amendment to Rights Agreement (the “Second Amendment”) with the Rights Agent. The Second Amendment amends the First Amendment to the Rights Agreement by and between the Company and the Rights Agent, solely to accelerate the expiration date of the rights under the Rights Agreement from the close of business on May 13, 2022 to the close of business on February 7, 2022. As a result of the Second Amendment, effective as of the close of business on February 7, 2022, the Rights as defined in the Rights Agreement have expired and cease to be outstanding.
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Incentive Share Plan |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Incentive Share Plan | INCENTIVE SHARE PLAN The Company’s 2008 Long-Term Equity Incentive Ownership Plan (as amended, the “2008 Plan”) expired in July 2018. At the Company’s annual meeting of shareholders on May 11, 2017, our shareholders voted to approve the 2018 Long-Term Equity Incentive Ownership Plan (the “2018 Plan”). The 2018 Plan provides for the issuance of up to 3,433,831 common shares and OP units pursuant to awards under the 2018 Plan. The 2018 Plan became effective on July 30, 2018, which is the day after the 2008 Plan expired. The Compensation Committee administered the 2008 Plan and administers the 2018 Plan except, in each case, with respect to awards to non-employee trustees, for which the 2008 Plan was and the 2018 Plan is administered by the 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. On September 6, 2017, the Compensation Committee approved the grant of an aggregate of 965,000 performance-based restricted common share units under the 2008 Plan which only vest immediately prior to the consummation of a Change in Control (as defined in the 2008 Plan) that occurs on or before September 30, 2024 (the “CIC Units”) to certain of our employees. Continued employment is required through the vesting date. If a Change in Control does not occur on or before September 30, 2024, the CIC Units shall be immediately forfeited. The Company considers a Change in Control on or before September 30, 2024 to be improbable, and no expense has been recognized for the CIC Units. If a Change in Control occurs, any outstanding CIC Units would be expensed immediately on the date of the Change in Control using the grant date fair value. The grant date fair value for each CIC Unit of $13.05 was determined based on the Company’s closing share price on the grant date. On March 16, 2018, the Compensation Committee approved the grant of an aggregate of 387,499 time-based restricted common share units under the 2008 Plan, which vest annually in three equal installments, and 4,300 performance-based restricted common share units to certain of our employees. On December 1, 2018, the Compensation Committee approved the grant of an aggregate of 229,684 performance-based restricted common share units with market-based vesting conditions (“TSR Units”) under the 2018 Plan to certain of our employees. Vesting is contingent upon achieving Total Shareholder Return relative to the peer group defined in the TSR Unit award agreements over a -year performance period. At the end of the performance period, the number of common shares awarded for each vested TSR Unit will vary from 0% to 200% depending on the Company’s TSR Peer Group Ranking. Continued employment is required through the vesting date. The grant date fair value for each TSR Unit of $14.89 was determined using the Monte Carlo simulation method and was recognized as share-based compensation expense ratably from the December 1, 2018 grant date to the end of the performance period, December 31, 2020. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award grant and calculates the fair value of the award. Expected volatilities utilized in the model were estimated using a historical period consistent with the performance period of approximately three years. The risk-free interest rate was based on the United States Treasury rate for a term commensurate with the expected life of the grant. On January 1, 2021, the remaining unvested 208,210 TSR Units that were granted on December 1, 2018 vested at a 50% achievement into 104,105 common shares. On June 30, 2019, the Compensation Committee approved the grant of an aggregate of 405,417 TSR Units and 317,184 time-based restricted common share units under the 2018 Plan to certain of our employees. On September 30, 2019, the Compensation Committee approved the grant of 17,069 time-based restricted common share units under the 2018 Plan to certain of our employees. Vesting of the TSR Units is contingent upon achieving Total Shareholder Return relative to the peer group defined in the TSR Unit award agreements over a -year performance period. At the end of the performance period, the number of common shares awarded for each vested TSR Unit will vary from 0% to 200% depending on the Company’s TSR Peer Group Ranking. Continued employment is required through the vesting date. The grant date fair value for each TSR Unit of $8.22 was determined using the Monte Carlo simulation method and is being recognized as share-based compensation expense ratably from the June 30, 2019 grant date to the end of the performance period, December 31, 2021. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award grant and calculates the fair value of the award. Expected volatilities utilized in the model were estimated using a historical period consistent with the performance period of approximately three years. The risk-free interest rate was based on the United States Treasury rate for a term commensurate with the expected life of the grant. On December 31, 2021, the remaining unvested 385,648 TSR Units that were granted on June 30, 2019 and September 30, 2019 vested at 0% attainment into 0 common shares. The time-based restricted common share units have a grant date fair value of $10.63 and $11.69 and vest annually in equal installments for the June 30, 2019 and September 30, 2019 grants, respectively. On July 31, 2020, the Compensation Committee approved the grant of an aggregate of 545,000 TSR Units and 530,000 time-based restricted common share units under the 2018 Plan to certain of our employees. Vesting of the TSR Units is contingent upon achieving Total Shareholder Return relative to the peer group defined in the TSR Unit award agreements over a -year performance period. At the end of the performance period, the number of common shares awarded for each vested TSR Unit will vary from 0% to 200% depending on the Company’s TSR Peer Group Ranking. Continued employment is required through the vesting date. The grant date fair value for each TSR Unit of $5.55 was determined using the Monte Carlo simulation method and is being recognized as share-based compensation expense ratably from the July 31, 2020 grant date to the end of the performance period, December 31, 2022. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award grant and calculates the fair value of the award. Expected volatilities utilized in the model were estimated using a historical period consistent with the performance period of approximately three years. The risk-free interest rate was based on the United States Treasury rate for a term commensurate with the expected life of the grant. The time-based restricted common share units have a grant date fair value of $5.83 and vest annually in equal installments. On March 17, 2021, the Compensation Committee approved the grant of an aggregate of 2,490 common share units under the 2018 Plan to certain of our employees. The common share units had a grant date fair value of $10.04 each and vested immediately. On June 30, 2021, the Compensation Committee approved the grant of an aggregate of 433,200 TSR Units and 433,200 time-based restricted common share units under the 2018 Plan to certain of our employees. Vesting of the TSR Units is contingent upon achieving Total Shareholder Return relative to the peer group defined in the TSR Unit award agreements over a -year performance period. At the end of the performance period, the number of common shares awarded for each vested TSR Unit will vary from 0% to 200% depending on the Company’s TSR Peer Group Ranking. Continued employment is required through the vesting date. The grant date fair value for each TSR Unit of $4.17 was determined using the Monte Carlo simulation method and is being recognized as share-based compensation expense ratably from the June 30, 2021 grant date to the end of the performance period, December 31, 2023. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award grant and calculates the fair value of the award. Expected volatilities utilized in the model were estimated using a historical period consistent with the performance period of approximately three years. The risk-free interest rate was based on the United States Treasury rate for a term commensurate with the expected life of the grant. The time-based restricted common share units have a grant date fair value of $7.51 and vest annually in equal installments. The 433,200 TSR Units granted on June 30, 2021 include 111,465 TSR Units that will be converted into the right to receive cash in the amount of the fair market value of the common shares to the extent that common shares are not available for issuance under the 2018 Plan. On September 30, 2021, the Compensation Committee approved the grant of an aggregate of 5,500 time-based restricted common share units under the 2018 Plan to certain of our employees. The time-based common share units had a grant date fair value of $9.06 each and vest annually in three equal installments. A summary of the share-based incentive plan activity as of and for the three months ended March 31, 2022 is as follows:
A summary of our non-vested and vested shares activity for the three months ended March 31, 2022 and years ended December 31, 2021 and 2020 is presented below:
Total compensation recognized in earnings for share-based payments was $(1,329,000) and $1,468,000 for the three months ended March 31, 2022 and 2021, respectively. Based on our current financial projections, we expect approximately 100% of the unvested awards, exclusive of 455,000 CIC Units, to vest over the next 27 months. As of March 31, 2022, there was approximately $1.1 million in unrecognized compensation cost related to outstanding non-vested TSR Units, which are expected to vest over a period of 21 months, and approximately $2.3 million in unrecognized compensation cost related to outstanding non-vested time-based shares, which are expected to be recognized over a period of approximately 27 months beginning on April 1, 2022. We expect to record approximately $0.8 million in non-cash share-based compensation expense in 2022 and $1.6 million subsequent to 2022. The unrecognized share-based compensation cost is expected to vest over a weighted average period of 19 months. The dilutive impact of the performance-based shares will be included in the denominator of the earnings per share calculation beginning in the period that the performance conditions are expected to be met. The dilutive impact of the TSR Units is based on the Company’s TSR Peer Group Ranking as of the reporting date and weighted according to the number of days outstanding in the period. As of March 31, 2022, the TSR Peer Group Ranking called for attainment of 50% and 150% for the shares issued in 2020 and 2021, respectively. The dilutive impact of the CIC Units is based on the probability of a Change in Control. Because the Company considers a Change in Control on or before September 30, 2024 to be improbable, no CIC Units are included in the Company’s dilutive shares.
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Grants to Trustees |
3 Months Ended |
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Mar. 31, 2022 | |
Grants to Trustees [Abstract] | |
Grants To Trustees | GRANTS TO TRUSTEESOn December 13, 2021, five independent trustees and one trustee emeritus were granted a total of 29,825 common shares, which vest immediately and are prorated based on date appointed. The 29,825 common shares granted to our trustees had a grant fair value of $9.32 per share. The fair value of the shares granted during the year ended December 31, 2021 was determined using quoted prices available on the date of grant. |
Segment Information |
3 Months Ended |
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Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATIONHistorically, our management has not differentiated results of operations by property type or location and, therefore, does not present segment information. |
Real Estate |
3 Months Ended |
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Mar. 31, 2022 | |
Real Estate [Abstract] | |
Real Estate | REAL ESTATE Property Acquisitions. On December 1, 2021 we acquired Anderson Arbor, a property that meets our Community Centered Property® strategy, for $28.1 million in cash and net prorations. Anderson Arbor, a 89,746 square foot property, was 89% leased at the time of purchase and is located in Austin, Texas. On July 8, 2021, we acquired Lakeside Market, a property that meets our Community Centered Property® strategy, for $53.2 million in cash and net prorations. Lakeside Market, a 162,649 square foot property, was 80.5% leased at the time of purchase and is located in Plano, Texas.
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Related Party Transactions |
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Related Party Transactions | RELATED PARTY TRANSACTIONS The Contribution. Prior to his employment termination, January 18, 2022, Mr. James C. Mastandrea, the former Chairman and Chief Executive Officer of Whitestone REIT, also served as the Chairman and Chief Executive Officer of Pillarstone REIT and beneficially owns approximately 66.7% of the outstanding equity in Pillarstone REIT (when calculated in accordance with Rule 13d-3(d)(1) under the Exchange Act of 1934, as amended (the “Exchange Act”)). He resigned as a member of the Board of Whitestone REIT on April 18, 2022. Prior to his employment termination, February 9, 2022, Mr. John J. Dee, the Company’s former Chief Operating Officer and Corporate Secretary, also served as the Senior Vice President and Chief Financial Officer of Pillarstone REIT and beneficially owns approximately 20.0% of the outstanding equity in Pillarstone REIT (when calculated in accordance with Rule 13d-3(d)(1) under the Exchange Act). In addition, Mr. Paul T. Lambert, a Trustee of the Company, also serves as a Trustee of Pillarstone REIT. Pillarstone OP. The Company accounts for its investment in Pillarstone OP under the equity method. During the ordinary course of business, we have transactions with Pillarstone OP that include, but are not limited to, rental income, interest expense, general and administrative costs, commissions, management and asset management fees, and property expenses. The following table presents the revenue and expenses with Pillarstone OP included in our consolidated statements of operations and comprehensive income for the three months ended March 31, 2022 and 2021 (in thousands):
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Commitments and Contingencies |
3 Months Ended |
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Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES On February 23, 2022, Whitestone’s former CEO, James Mastandrea, filed suit against Whitestone REIT and certain of the Company’s trustees (Nandita Berry, Jeff Jones, Jack Mahaffey, and David Taylor) and officers (David Holeman, Christine Mastandrea, Peter Tropoli) in the District Court of Harris County, Texas, alleging claims relating to the termination of claimant’s employment. Claimant purports to assert claims for breach of contract, breach of fiduciary duties, tortious interference with contract, civil conspiracy, and declaratory judgment. The claimant seeks $25 million in damages and equitable relief. However, the Company denies the claims, has substantial legal and factual defenses against the claims, and intends to vigorously defend against the claims. The Company does not believe a probable loss will be incurred, nor does it anticipate a material adverse effect on its financial position, results of operations, cash flows or liquidity. Therefore, the Company has not recorded a charge as a result of this action. On December 26, 2021, the Board of Trustees of Pillarstone REIT adopted the Pillarstone Rights Agreement. See Note 6 (Investment in Real Estate Partnership) for additional information regarding the Pillarstone Rights Agreement. We are subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are generally covered by insurance. While the resolution of these matters cannot be predicted with certainty, management believes the final outcome of such matters will not have a material adverse effect on our financial position, results of operations, cash flows or liquidity.
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Subsequent Events |
3 Months Ended |
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Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTSNone. |
Summary of Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Consolidation | 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 March 31, 2022 and December 31, 2021, we owned a majority of the partnership interests in the Operating Partnership. Consequently, the accompanying consolidated financial statements include the accounts of the Operating Partnership. Noncontrolling interest in the accompanying consolidated financial statements represents the share of equity and earnings of the Operating Partnership allocable to holders of partnership interests other than us. Net income or loss is allocated to noncontrolling interests based on the weighted-average percentage ownership of the Operating Partnership during the period. Issuance of additional common shares of beneficial interest in Whitestone (the “common shares”) and units of limited partnership interest in the Operating Partnership that are convertible into cash or, at our option, common shares on a one-for-one basis (the “OP units”) changes the percentage of ownership interests of both the noncontrolling interests and Whitestone.
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Equity Method | Noncontrolling Interests. Noncontrolling interests are the portion of equity in a subsidiary not attributable to a parent. 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 and comprehensive income, subsidiaries are reported at the consolidated amount, including both the amount attributable to Whitestone and noncontrolling interests. The consolidated statements 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. |
Basis of Accounting | 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 | 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 grant date fair value of common share units included in share-based compensation expense, 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. In particular, the COVID-19 pandemic has adversely impacted and is likely to further adversely impact the Company’s business and markets, including the Company’s operations and the operations of its tenants. The full extent to which the pandemic will directly or indirectly impact the Company’s business, results of operations and financial condition, including revenues, expenses, reserves and allowances, fair value measurements, and asset impairment charges, will depend on future developments that are highly uncertain and difficult to predict. These developments include, but are not limited to, the duration and spread of the pandemic, its severity in our markets and elsewhere, the impact on our tenants’ businesses and financial condition, governmental actions to contain the spread of the pandemic and respond to the reduction in global economic activity, and how quickly and to what extent normal economic and operating conditions can resume. |
Reclassifications | 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. |
Restricted Cash | Restricted Cash. We classify all cash pledged as collateral to secure certain obligations and all cash whose use is limited as restricted cash. During 2015, pursuant to the terms of our $15.1 million 4.99% Note, due January 6, 2024 (see Note 7 (Debt)), which is collateralized by our Anthem Marketplace property, we were required by the lenders thereunder to establish a cash management account controlled by the lenders to collect all amounts generated by our Anthem Marketplace property in order to collateralize such promissory note. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities. We utilize derivative financial instruments, principally interest rate swaps, to manage our exposure to fluctuations in interest rates. We have established policies and procedures for risk assessment, and the approval, reporting and monitoring of derivative financial instruments. We recognize our interest rate swaps as cash flow hedges with the effective portion of the changes in fair value recorded in comprehensive income and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. Any ineffective portion of a cash flow hedges’ change in fair value is recorded immediately into earnings. Our cash flow hedges are determined using Level 2 inputs under ASC 820, “Fair Value Measurements and Disclosures.” Level 2 inputs represent quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable. As of March 31, 2022, we consider our cash flow hedges to be highly effective. |
Development Properties | 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 (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. |
Share-Based Compensation | Share-Based Compensation. From time to time, we grant 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 2018 Long-Term Equity Incentive Ownership Plan (the “2018 Plan”). 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. |
Accrued Rents and Accounts Receivable | Accrued Rents and Accounts Receivable. Included in accrued rents and accounts receivable are base rents, tenant reimbursements and receivables attributable to recording rents on a straight-line basis. We review the collectability of charges under our tenant operating leases on a regular basis, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area where the property is located, including the impact of the COVID-19 pandemic on tenants’ businesses and financial condition. We recognize an adjustment to rental revenue if we deem it probable that the receivable will not be collected. Our review of collectability under our operating leases includes any accrued rental revenues related to the straight-line method of reporting rental revenue. |
Revenue Recognition | Revenue Recognition. All leases on our properties are classified as operating leases, and the related rental income is recognized on a straight-line basis over the terms of the related leases. Differences between rental income earned and amounts due per the respective lease agreements are capitalized or charged, as applicable, to accrued rents and accounts receivable. Percentage rents are recognized as rental income when the thresholds upon which they are based have been met. Recoveries from tenants for taxes, insurance, and other operating expenses are recognized as revenues in the period the corresponding costs are incurred. We combine lease and nonlease components in lease contracts, which includes combining base rent, recoveries, and percentage rents into a single line item, Rental, within the consolidated statements of operations and comprehensive income. Additionally, we have tenants who pay real estate taxes directly to the taxing authority. We exclude these costs paid directly by the tenant to third parties on our behalf from revenue recognized and the associated property operating expense. Other property income primarily includes amounts recorded in connection with management fees and lease termination fees. Pillarstone OP pays us management fees for property management, leasing and day-to-day advisory and administrative services. Their obligations are satisfied over time. Pillarstone OP is billed monthly and typically pays quarterly. Revenues are governed by the Management Agreements (as defined in Note 6 (Investment in Real Estate Partnership)). Refer to Note 6 (Investment in Real Estate Partnership) for additional information regarding the Management Agreements with Pillarstone OP. Additionally, we recognize lease termination fees in the year that the lease is terminated and collection of the fee is probable. Amounts recorded within other property income are accounted for at the point in time when control of the goods or services transfers to the customer and our performance obligation is satisfied. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements. In April 2020, the FASB issued guidance on the application of Topic 842, relating to concessions being made by lessors in response to the COVID-19 pandemic. The guidance notes that it would be acceptable for entities to make an election to account for lease concessions relating to the effects of the COVID-19 pandemic consistent with how those concessions would be accounted for under Topic 842 as though enforceable rights and obligations for those concessions existed, even if such enforceable rights and obligations are not explicitly contained in the lease contract. Thus, for concessions relating to the COVID-19 pandemic, an entity would not have to analyze each contract to determine whether enforceable rights and obligations for concessions exist in the contract, and would have the option to apply, or not to apply, the general lease modification guidance in Topic 842 as it stands. We have elected this option to account for lease concessions relating to the effects of the COVID-19 pandemic consistent with how those concessions would be accounted for under Topic 842 as though enforceable rights and obligations for those concessions existed. Therefore, such concessions are not accounted for as a lease modification under Topic 842. |
Leases (Tables) |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Minimum Future Rent Payments | A summary of minimum future rents to be received (exclusive of renewals, tenant reimbursements, contingent rents, and collectability adjustments under Topic 842) under noncancelable operating leases in existence as of March 31, 2022 is as follows (in thousands):
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Maturities of Operating Lease Liabilities | The following table summarizes the fixed, future minimum rental payments, excluding variable costs, which are discounted by our weighted average incremental borrowing rates to calculate the lease liabilities for our operating leases in which we are the lessee (in thousands):
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Accrued Rents and Accounts Receivable, Net (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Rent 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 Lease Commissions, Legal Fees and Loan Costs (Tables) |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Unamortized Lease Commissions and Loan Costs | Costs which have been deferred consist of the following (in thousands):
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Investment in Real Estate Partnership (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments | The table below presents the real estate partnership investment in which the Company holds an ownership interest (in thousands):
(1) The Company manages these real estate partnership investments and, where applicable, earns acquisition fees, leasing commissions, property management fees, and asset management fees. (2) Representing eight property interests and 926,798 square feet of GLA, as of March 31, 2022 and December 31, 2021.Summarized financial information for the Company’s investment in real estate partnership is as follows (in thousands):
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Real Estate Investment Financial Statements, Disclosure | The table below presents the Company’s share of net income from its investment in the real estate partnership which is included in equity in earnings of real estate partnership, net on the Company’s consolidated statements of operations and comprehensive income (in thousands):
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Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Debt consisted of the following as of the dates indicated (in thousands):
(1) Promissory note includes an interest rate swap that fixed the LIBOR portion of Term Loan 3 (as defined below) at 1.73%. (2) Promissory note includes an interest rate swap that fixed the LIBOR portion of the interest rate at an average rate of 2.24% for the duration of the term through January 31, 2024.
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Schedule of Maturities of Debt | Scheduled maturities of our outstanding debt as of March 31, 2022 were as follows (in thousands):
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Derivatives and Hedging Activities (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of activity and fair value of interest rate swaps | The fair value of our interest rate swaps is as follows (in thousands):
A summary of our interest rate swap activity is as follows (in thousands):
(1) There was no ineffective portion of our interest rate swaps to recognize in earnings for the three months ended March 31, 2022 and 2021.
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share |
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Equity (Tables) |
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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 of 2021 and the three months ended March 31, 2022 (in thousands, except per share/per OP unit data):
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Incentive Share Plan (Tables) |
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-Based Incentive Plan Activity | A summary of the share-based incentive plan activity as of and for the three months ended March 31, 2022 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 three months ended March 31, 2022 and years ended December 31, 2021 and 2020 is presented below:
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Related Party Transactions (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | The following table presents the revenue and expenses with Pillarstone OP included in our consolidated statements of operations and comprehensive income for the three months ended March 31, 2022 and 2021 (in thousands):
|
Interim Financial Statements (Details) $ in Thousands |
1 Months Ended | 3 Months Ended | |||
---|---|---|---|---|---|
Jul. 31, 2004
shares
|
Mar. 31, 2022
USD ($)
ft²
property
|
Dec. 31, 2021
USD ($)
ft²
property
|
Dec. 01, 2021
ft²
|
Jul. 08, 2021
ft²
|
|
Real Estate Properties [Line Items] | |||||
Reorganization and conversion, number of common shares (in shares) | shares | 1.42857 | ||||
Carrying amount, net | $ | $ 1,002,478 | $ 1,006,586 | |||
Lakeside Market | |||||
Real Estate Properties [Line Items] | |||||
Number of properties acquired | 2 | ||||
Area of real estate property | ft² | 200,000 | 162,649 | |||
Carrying amount, net | $ | $ 52,800 | ||||
Anderson Arbor | |||||
Real Estate Properties [Line Items] | |||||
Area of real estate property | ft² | 100,000 | 89,746 | |||
Carrying amount, net | $ | $ 28,000 | ||||
Wholly Owned Properties | |||||
Real Estate Properties [Line Items] | |||||
Number of properties | 60 | 60 | |||
Retail Site | Wholly Owned Properties | Community Centered Properties™ | |||||
Real Estate Properties [Line Items] | |||||
Number of properties | 53 | ||||
Land | Wholly Owned Properties | Parcels Held for Future Development | Redevelopment, New Acquisitions Portfolio | |||||
Real Estate Properties [Line Items] | |||||
Number of properties | 5 | ||||
Pillarstone Capital REIT Operating Partnership LP | |||||
Real Estate Properties [Line Items] | |||||
Ownership interest | 81.40% | ||||
Pillarstone Capital REIT Operating Partnership LP | Unconsolidated Properties | |||||
Real Estate Properties [Line Items] | |||||
Number of properties | 8 | 8 | |||
Gross leasable area (in square feet) | ft² | 926,798 | 926,798 |
Summary of Significant Accounting Policies - Narrative (Details) |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2022
USD ($)
tenant
shares
|
Mar. 31, 2021
USD ($)
tenant
|
Dec. 31, 2021
USD ($)
|
Dec. 31, 2015
USD ($)
|
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Conversion basis for common shares to OP units (in shares) | shares | 1 | |||
Interest expense capitalized | $ 99,000 | $ 102,000 | ||
Real estate tax capitalized | 75,000 | 79,000 | ||
Share-based compensation | (1,329,000) | 1,468,000 | ||
Allowance for doubtful accounts | 15,346,000 | $ 14,896,000 | ||
Bad debt | $ (373,000) | $ (529,000) | ||
Number of tenants | tenant | 77,000 | 67,000 | ||
Rental revenue adjustment | $ (230,000) | $ (500,000) | ||
Straight-line rent reserve adjustment | $ (400,000) | $ (100,000) | ||
Anthem Marketplace Note | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Face amount of debt | $ 15,100,000 | |||
Stated interest rate | 4.99% |
Leases - Minimum Future Rent Payments (Details) $ in Thousands |
Mar. 31, 2022
USD ($)
|
---|---|
Leases [Abstract] | |
2022 (remaining) | $ 70,547 |
2023 | 85,238 |
2024 | 71,462 |
2025 | 55,060 |
2026 | 40,249 |
Thereafter | 117,717 |
Total | $ 440,273 |
Leases - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Lessee, Lease, Description [Line Items] | ||
Operating lease, cost | $ 229 | $ 257 |
Operating lease, weighted average remaining lease term | 2 years 10 months 24 days | |
Operating lease, weighted average discount rate, percent | 4.50% | |
Minimum | Office Space, Automobile, and Office Machine | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, operating lease, remaining lease term | 1 year | |
Maximum | Office Space, Automobile, and Office Machine | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, operating lease, remaining lease term | 3 years |
Leases - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Operating Lease Liabilities, Payments Due [Abstract] | ||
2022 (remaining) | $ 86 | |
2023 | 65 | |
2024 | 43 | |
2025 | 28 | |
2026 | 1 | |
Thereafter | 0 | |
Total undiscounted rental payments | 223 | |
Less imputed interest | 13 | |
Total lease liabilities | $ 210 | $ 231 |
Accrued Rents and Accounts Receivable, Net (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Receivables [Abstract] | ||
Tenant receivables | $ 18,678 | $ 18,410 |
Accrued rents and other recoveries | 20,119 | 18,681 |
Allowance for doubtful accounts | (15,346) | (14,896) |
Other receivables | 485 | 200 |
Total | $ 23,936 | $ 22,395 |
Unamortized Lease Commissions, Legal Fees and Loan Costs (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Leasing commissions | $ 13,948 | $ 13,341 |
Deferred legal cost | 391 | 365 |
Deferred financing cost | 3,898 | 3,898 |
Total cost | 18,237 | 17,604 |
Less: leasing commissions accumulated amortization | (6,691) | (6,305) |
Less: deferred legal cost accumulated amortization | (257) | (248) |
Less: deferred financing cost accumulated amortization | (2,831) | (2,609) |
Total cost, net of accumulated amortization | $ 8,458 | $ 8,442 |
Investment in Real Estate Partnership - Narrative (Details) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Dec. 08, 2016
USD ($)
property
subsidiary
|
Mar. 31, 2022
USD ($)
|
Mar. 31, 2021
USD ($)
|
|
Pillarstone Capital REIT Operating Partnership LP | |||
Variable Interest Entity [Line Items] | |||
Amortization of the basis difference between the cost of investment and the Company's share of underlying net book value | $ 27 | $ 27 | |
Performance Guarantee | |||
Variable Interest Entity [Line Items] | |||
Noncontingent liability | $ 462 | ||
Guarantee liability, amortization period | 7 years | ||
Amortization of guarantee liability | $ 9 | $ 10 | |
Pillarstone Variable Interest Entity | |||
Variable Interest Entity [Line Items] | |||
Number of wholly-owned subsidiaries | subsidiary | 4 | ||
Number of non-core properties | property | 14 | ||
Consideration amount | $ 84,000 | ||
Consideration, limited partnership interest | 18,100 | ||
Liabilities assumed | $ 65,900 | ||
Property management fee, percent fee | 5.00% | ||
Asset management fee, percent fee | 0.125% | ||
Pillarstone Variable Interest Entity | Uptown Tower | |||
Variable Interest Entity [Line Items] | |||
Property management fee, percent fee | 3.00% | ||
Asset management fee, percent fee | 0.125% |
Investment in Real Estate Partnership - Unconsolidated Real Estate Partnership Investments (Details) $ / shares in Units, $ in Thousands |
Mar. 31, 2022
USD ($)
ft²
property
|
Dec. 31, 2021
USD ($)
ft²
property
|
Dec. 06, 2021
$ / shares
|
---|---|---|---|
Schedule of Equity Method Investments [Line Items] | |||
Investment in real estate partnership | $ 34,868 | $ 34,588 | |
Pillarstone Capital REIT Operating Partnership LP | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership interest | 81.40% | ||
Investment in real estate partnership | $ 34,588 | ||
Pillarstone Capital REIT Operating Partnership LP | Series D Preferred Stock | |||
Schedule of Equity Method Investments [Line Items] | |||
Purchase price per unit (in dollars per share) | $ / shares | $ 7.00 | ||
Purchase price multiplier | 200.00% | ||
Pillarstone Capital REIT Operating Partnership LP | Unconsolidated Properties | |||
Schedule of Equity Method Investments [Line Items] | |||
Number of properties | property | 8 | 8 | |
Gross leasable area (in square feet) | ft² | 926,798 | 926,798 |
Investment in Real Estate Partnership - Net Income from Investments in Real Estate Partnerships (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Schedule of Equity Method Investments [Line Items] | ||
Equity in earnings of real estate partnership | $ 280 | $ 89 |
Pillarstone Capital REIT Operating Partnership LP | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity in earnings of real estate partnership | $ 280 | $ 89 |
Investment in Real Estate Partnership - Summarized Financial Information for Investment in Real Estate Partnership - Balance Sheet (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|---|---|
ASSETS | ||||
Total assets | $ 1,095,001 | $ 1,102,090 | ||
LIABILITIES AND EQUITY | ||||
Equity | 404,826 | 399,038 | $ 338,372 | $ 338,326 |
Total liabilities and equity | 1,095,001 | 1,102,090 | ||
Carrying value of investment in real estate partnership | 34,868 | 34,588 | ||
Pillarstone Capital REIT Operating Partnership LP | ||||
LIABILITIES AND EQUITY | ||||
Carrying value of investment in real estate partnership | 34,588 | |||
Equity Method Investment, Nonconsolidated Investee or Group of Investees | Pillarstone Capital REIT Operating Partnership LP | ||||
ASSETS | ||||
Real estate, net | 48,226 | 48,273 | ||
Other assets | 8,882 | 8,790 | ||
Total assets | 57,108 | 57,063 | ||
LIABILITIES AND EQUITY | ||||
Notes payable | 15,129 | 14,920 | ||
Other liabilities | 2,659 | 3,200 | ||
Equity | 39,320 | 38,943 | ||
Total liabilities and equity | 57,108 | 57,063 | ||
Company’s share of equity | 32,025 | 31,718 | ||
Cost of investment in excess of the Company’s share of underlying net book value | 2,843 | 2,870 | ||
Carrying value of investment in real estate partnership | $ 34,868 | $ 34,588 |
Investment in Real Estate Partnership - Summarized Financial Information for Investment in Real Estate Partnership - Income Statement (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Schedule of Equity Method Investments [Line Items] | ||
Revenues | $ 34,123 | $ 29,045 |
Net income | 7,189 | 1,441 |
Equity Method Investment, Nonconsolidated Investee or Group of Investees | Pillarstone Capital REIT Operating Partnership LP | ||
Schedule of Equity Method Investments [Line Items] | ||
Revenues | 2,326 | 2,190 |
Operating expenses | (1,605) | (1,707) |
Other expenses | (344) | (348) |
Net income | $ 377 | $ 135 |
Debt (Schedule of Debt) (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Dec. 31, 2021 |
|
Debt Instrument [Line Items] | ||
Total notes payable principal | $ 644,596,000 | $ 643,613,000 |
Less deferred financing costs, net of accumulated amortization | (720,000) | (771,000) |
Total notes payable | 643,876,000 | 642,842,000 |
Fixed rate notes | $100.0 million, 1.73% plus 1.35% to 1.90% Note, due October 2022 | ||
Debt Instrument [Line Items] | ||
Total notes payable principal | 100,000,000 | 100,000,000 |
Face amount of debt | $ 100,000,000.0 | |
Imputed interest rate | 1.73% | |
Fixed rate notes | $100.0 million, 1.73% plus 1.35% to 1.90% Note, due October 2022 | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.35% | |
Fixed rate notes | $100.0 million, 1.73% plus 1.35% to 1.90% Note, due October 2022 | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.90% | |
Fixed rate notes | $165.0 million, 2.24% plus 1.35% to 1.90% Note, due January 31, 2024 | ||
Debt Instrument [Line Items] | ||
Total notes payable principal | $ 165,000,000 | 165,000,000 |
Face amount of debt | $ 165,000,000.0 | |
Imputed interest rate | 2.24% | |
Fixed rate notes | $165.0 million, 2.24% plus 1.35% to 1.90% Note, due January 31, 2024 | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.35% | |
Fixed rate notes | $165.0 million, 2.24% plus 1.35% to 1.90% Note, due January 31, 2024 | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.90% | |
Fixed rate notes | $80.0 million, 3.72% Note, due June 1, 2027 | ||
Debt Instrument [Line Items] | ||
Total notes payable principal | $ 80,000,000 | 80,000,000 |
Face amount of debt | $ 80,000,000.0 | |
Stated interest rate | 3.72% | |
Fixed rate notes | $19.0 million 4.15% Note, due December 1, 2024 | ||
Debt Instrument [Line Items] | ||
Total notes payable principal | $ 18,272,000 | 18,358,000 |
Face amount of debt | $ 19,000,000.0 | |
Stated interest rate | 4.15% | |
Fixed rate notes | $20.2 million 4.28% Note, due June 6, 2023 | ||
Debt Instrument [Line Items] | ||
Total notes payable principal | $ 17,699,000 | 17,808,000 |
Face amount of debt | $ 20,200,000 | |
Stated interest rate | 4.28% | |
Fixed rate notes | $14.0 million 4.34% Note, due September 11, 2024 | ||
Debt Instrument [Line Items] | ||
Total notes payable principal | $ 12,910,000 | 12,978,000 |
Face amount of debt | $ 14,000,000.0 | |
Stated interest rate | 4.34% | |
Fixed rate notes | $14.3 million 4.34% Note, due September 11, 2024 | ||
Debt Instrument [Line Items] | ||
Total notes payable principal | $ 13,708,000 | 13,773,000 |
Face amount of debt | $ 14,300,000 | |
Stated interest rate | 4.34% | |
Fixed rate notes | $15.1 million 4.99% Note, due January 6, 2024 | ||
Debt Instrument [Line Items] | ||
Total notes payable principal | $ 13,838,000 | 13,907,000 |
Face amount of debt | $ 15,100,000 | |
Stated interest rate | 4.99% | |
Fixed rate notes | $2.6 million 5.46% Note, due October 1, 2023 | ||
Debt Instrument [Line Items] | ||
Total notes payable principal | $ 2,275,000 | 2,289,000 |
Face amount of debt | $ 2,600,000 | |
Stated interest rate | 5.46% | |
Fixed rate notes | $50.0 million, 5.09% Note, due March 22, 2029 | ||
Debt Instrument [Line Items] | ||
Total notes payable principal | $ 50,000,000 | 50,000,000 |
Face amount of debt | $ 50,000,000.0 | |
Stated interest rate | 5.09% | |
Fixed rate notes | $50.0 million, 5.17% Note, due March 22, 2029 | ||
Debt Instrument [Line Items] | ||
Total notes payable principal | $ 50,000,000 | 50,000,000 |
Face amount of debt | $ 50,000,000.0 | |
Stated interest rate | 5.17% | |
Fixed rate notes | $1.7 million 3.25% Note, due December 28, 2021 | ||
Debt Instrument [Line Items] | ||
Total notes payable principal | $ 1,394,000 | 0 |
Face amount of debt | $ 1,700,000 | |
Stated interest rate | 3.25% | |
Floating rate notes | Unsecured line of credit, LIBOR plus 1.40% to 1.90%, due January 31, 2023 | LIBOR Rate | ||
Debt Instrument [Line Items] | ||
Total notes payable principal | $ 119,500,000 | $ 119,500,000 |
Floating rate notes | Unsecured line of credit, LIBOR plus 1.40% to 1.90%, due January 31, 2023 | Minimum | LIBOR Rate | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.40% | |
Floating rate notes | Unsecured line of credit, LIBOR plus 1.40% to 1.90%, due January 31, 2023 | Maximum | LIBOR Rate | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.90% | |
Interest rate swap | $100.0 million, 1.73% plus 1.35% to 1.90% Note, due October 2022 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 1.73% | |
Interest rate swap | $165.0 million, 2.24% plus 1.35% to 1.90% Note, due January 31, 2024 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 2.24% |
Debt (Narrative) (Details) |
Mar. 22, 2019
USD ($)
|
Jan. 31, 2019
USD ($)
|
Mar. 31, 2022
USD ($)
property
|
---|---|---|---|
Debt Instrument [Line Items] | |||
Secured debt | $ 158,700,000 | ||
Number of collateralized properties (in collateralized properties) | property | 7 | ||
Carrying value of collateralized properties | $ 245,900,000 | ||
2019 Facility | |||
Debt Instrument [Line Items] | |||
Credit facility, covenant, total debt to total assets ratio, maximum | 0.60 | ||
Credit facility, covenant, secured debt to total asset ratio, maximum | 0.40 | ||
Credit facility, covenant, EBITDA to fixed charges ratio, minimum | 1.50 | ||
Credit facility, covenant, other recourse debt to total assets ratio, maximum | 0.15 | ||
Credit facility, interest rate at period end | 1.65% | ||
Repayments of long-term debt | $ 446,200,000 | ||
Covenant, tangible net worth threshold before percentage of aggregate net proceeds, amount | $ 372,000,000 | ||
Covenant, tangible net worth, percentage of aggregate net proceeds, minimum | 75.00% | ||
Series A Senior Notes | |||
Debt Instrument [Line Items] | |||
Annual principal payment | $ 7,100,000 | ||
Series B Senior Notes | |||
Debt Instrument [Line Items] | |||
Annual principal payment | 10,000,000 | ||
Senior Notes | |||
Debt Instrument [Line Items] | |||
Face amount of debt | 100,000,000 | ||
Periodic payment, principal | $ 1,000,000 | ||
Credit facility, covenant, total debt to total assets ratio, maximum | 0.60 | ||
Credit facility, covenant, secured debt to total asset ratio, maximum | 0.40 | ||
Credit facility, covenant, EBITDA to fixed charges ratio, minimum | 1.50 | ||
Credit facility, covenant, other recourse debt to total assets ratio, maximum | 0.15 | ||
Covenant, tangible net worth threshold before percentage of aggregate net proceeds, amount | $ 372,000,000 | ||
Covenant, tangible net worth, percentage of aggregate net proceeds, minimum | 75.00% | ||
Senior Notes | Series A Senior Notes | |||
Debt Instrument [Line Items] | |||
Face amount of debt | $ 50,000,000 | ||
Stated interest rate | 5.09% | ||
Senior Notes | Series B Senior Notes | |||
Debt Instrument [Line Items] | |||
Face amount of debt | $ 50,000,000 | ||
Stated interest rate | 5.17% | ||
Revolving Credit Facility | 2019 Facility | |||
Debt Instrument [Line Items] | |||
Line of credit outstanding | $ 384,500,000 | ||
Credit facility, remaining borrowing capacity | $ 96,200,000 | ||
Revolving Credit Facility | 2019 Facility | LIBOR Rate | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.00% | ||
Revolving Credit Facility | 2019 Facility | LIBOR Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.40% | ||
Revolving Credit Facility | 2019 Facility | LIBOR Rate | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.90% | ||
Term Loan | 2019 Facility | LIBOR Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.35% | ||
Term Loan | 2019 Facility | LIBOR Rate | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.90% | ||
Term Loan | Unsecured Line Of Credit | Term Loan A | |||
Debt Instrument [Line Items] | |||
Credit facility, maximum borrowing capacity | $ 165,000,000 | ||
Term Loan | Unsecured Line Of Credit | Term Loan B | |||
Debt Instrument [Line Items] | |||
Credit facility, maximum borrowing capacity | 100,000,000 | ||
Revolving Credit Facility | 2019 Facility | |||
Debt Instrument [Line Items] | |||
Credit facility, accordion feature, increase limit | 200,000,000 | ||
Revolving Credit Facility | Unsecured Line Of Credit | 2019 Revolver | |||
Debt Instrument [Line Items] | |||
Credit facility, maximum borrowing capacity | $ 250,000,000 |
Debt (Schedule of Maturities of Debt) (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Debt Disclosure [Abstract] | ||
2022 (remaining) | $ 102,945 | |
2023 | 147,363 | |
2024 | 228,574 | |
2025 | 17,143 | |
2026 | 17,143 | |
Thereafter | 131,428 | |
Total | $ 644,596 | $ 643,613 |
Derivatives and Hedging Activities (Details) - USD ($) $ in Thousands |
3 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Jan. 31, 2019 |
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2016 |
Jun. 30, 2016 |
Dec. 31, 2021 |
Nov. 19, 2015 |
|
Derivative [Line Items] | |||||||
Unrealized gain on cash flow hedging activities | $ 5,986 | $ 2,221 | |||||
U.S. Bank National Association | Term Loan 2 | |||||||
Derivative [Line Items] | |||||||
Interest rate swap | $ 6,500 | ||||||
U.S. Bank National Association | Term Loan 3 | |||||||
Derivative [Line Items] | |||||||
Interest rate swap | $ 35,000 | ||||||
Regions Bank | Term Loan 2 | |||||||
Derivative [Line Items] | |||||||
Interest rate swap | 3,800 | ||||||
Wells Fargo Bank, National Association | Term Loan 2 | |||||||
Derivative [Line Items] | |||||||
Interest rate swap | 14,000 | ||||||
Bank of American, N.A. | Term Loan 2 | |||||||
Derivative [Line Items] | |||||||
Interest rate swap | 14,000 | ||||||
SunTrust Bank | Term Loan 2 | |||||||
Derivative [Line Items] | |||||||
Interest rate swap | $ 5,000 | ||||||
SunTrust Bank | Term Loan 3 | |||||||
Derivative [Line Items] | |||||||
Interest rate swap | $ 15,000 | ||||||
Interest rate swap | Interest Expense | |||||||
Derivative [Line Items] | |||||||
Unrealized gain on cash flow hedging activities | 5,986 | 2,221 | |||||
Amount of Income (Loss) Recognized in Earnings | (1,331) | $ (1,276) | |||||
Interest rate swap | Cash Flow Hedging | Term Loan 2 | |||||||
Derivative [Line Items] | |||||||
Fixed interest rate | 1.50% | ||||||
Interest rate swap | Cash Flow Hedging | Term Loan 3 | |||||||
Derivative [Line Items] | |||||||
Fixed interest rate | 1.73% | ||||||
Accounts payable and accrued expenses | Interest rate swap | |||||||
Derivative [Line Items] | |||||||
Estimated Fair Value | $ (873) | $ (6,860) | |||||
November 9, 2020 | Bank of Montreal | Term Loan A | |||||||
Derivative [Line Items] | |||||||
Interest rate swap | $ 115,000 | ||||||
November 9, 2020 | U.S. Bank National Association | Term Loan A | |||||||
Derivative [Line Items] | |||||||
Interest rate swap | 22,700 | ||||||
November 9, 2020 | Regions Bank | Term Loan A | |||||||
Derivative [Line Items] | |||||||
Interest rate swap | 20,500 | ||||||
November 9, 2020 | Wells Fargo Bank, National Association | Term Loan A | |||||||
Derivative [Line Items] | |||||||
Interest rate swap | 10,500 | ||||||
November 9, 2020 | SunTrust Bank | Term Loan A | |||||||
Derivative [Line Items] | |||||||
Interest rate swap | $ 27,900 | ||||||
November 9, 2020 | Interest rate swap | Cash Flow Hedging | Term Loan A | |||||||
Derivative [Line Items] | |||||||
Fixed interest rate | 2.43% | ||||||
February 8, 2021 | Bank of Montreal | Term Loan A | |||||||
Derivative [Line Items] | |||||||
Interest rate swap | $ 165,000 | ||||||
February 8, 2021 | U.S. Bank National Association | Term Loan A | |||||||
Derivative [Line Items] | |||||||
Interest rate swap | 32,600 | ||||||
February 8, 2021 | Regions Bank | Term Loan A | |||||||
Derivative [Line Items] | |||||||
Interest rate swap | 29,400 | ||||||
February 8, 2021 | Wells Fargo Bank, National Association | Term Loan A | |||||||
Derivative [Line Items] | |||||||
Interest rate swap | 15,000 | ||||||
February 8, 2021 | SunTrust Bank | Term Loan A | |||||||
Derivative [Line Items] | |||||||
Interest rate swap | $ 40,000 | ||||||
February 8, 2021 | Interest rate swap | Cash Flow Hedging | Term Loan A | |||||||
Derivative [Line Items] | |||||||
Fixed interest rate | 2.43% |
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Numerator: | ||
Net income from continuing operations | $ 7,189 | $ 1,441 |
Less: Net income attributable to noncontrolling interests | (111) | (26) |
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares | $ 7,078 | $ 1,415 |
Denominator: | ||
Weighted average number of common shares - basic (in shares) | 49,145,000 | 42,495,000 |
Effect of dilutive securities: | ||
Unvested restricted shares (in shares) | 1,161,000 | 836,000 |
Weighted average number of common shares - dilutive (in shares) | 50,306,000 | 43,331,000 |
Basic: | ||
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares (in dollars per share) | $ 0.14 | $ 0.03 |
Diluted: | ||
Net income attributable to common shareholders, excluding amounts attributable to unvested restricted shares (in dollars per share) | $ 0.14 | $ 0.03 |
OP Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
OP units excluded from diluted earnings per share because their effect would be anti-dilutive (in shares) | 772,775 |
Income Taxes (Details) - Texas - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Income Tax Contingency [Line Items] | ||
Applicable tax rate used to determine state margin tax | 0.75% | |
Standard deduction rate used to determine state margin tax | 30.00% | |
Margin tax provision recognized | $ 101 | $ 88 |
Equity (Details) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
May 14, 2020
$ / shares
|
Mar. 31, 2022
USD ($)
$ / shares
shares
|
Dec. 31, 2021
USD ($)
$ / shares
shares
|
Sep. 30, 2021
USD ($)
$ / shares
|
Jun. 30, 2021
USD ($)
$ / shares
|
Mar. 31, 2021
USD ($)
$ / shares
shares
|
Dec. 31, 2021
USD ($)
$ / shares
shares
|
May 31, 2019
USD ($)
agreement
|
|
Class of Stock [Line Items] | ||||||||
Common shares, authorized (in shares) | 400,000,000 | 400,000,000 | 400,000,000 | |||||
Preferred shares, shares authorized (in shares) | 50,000,000 | 50,000,000 | 50,000,000 | |||||
Preferred shares, par value per share (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Conversion basis for common shares to OP units (in shares) | 1 | |||||||
Weighted-average share ownership in operating partnership | 98.50% | 98.20% | ||||||
Operating Partnership | ||||||||
Class of Stock [Line Items] | ||||||||
Ownership interest in operating partnership | 98.50% | |||||||
OP Units | ||||||||
Class of Stock [Line Items] | ||||||||
OP units outstanding (in shares) | 49,795,151 | 49,793,803 | 49,793,803 | |||||
OP units owned (in shares) | 49,025,273 | 49,023,313 | 49,023,313 | |||||
Conversion of stock, shares converted (in shares) | 612 | 0 | ||||||
Cash distribution paid (in dollars per share) | $ / shares | $ 30.00 | |||||||
Preferred Stock | Series A Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Preferred shares, par value per share (in dollars per share) | $ / shares | $ 0.001 | |||||||
Stock conversion ratio | 1 | |||||||
2019 Equity Distribution Agreement | ||||||||
Class of Stock [Line Items] | ||||||||
Number of equity distribution agreements | agreement | 9 | |||||||
Equity distribution agreements, authorized amount | $ | $ 100,000 | |||||||
Cash Distribution | ||||||||
Class of Stock [Line Items] | ||||||||
Cash distribution paid | $ | $ 5,351 | $ 5,340 | $ 5,064 | $ 4,685 | $ 4,562 | $ 19,651 | ||
Cash Distribution | Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Cash distribution paid (in dollars per share) | $ / shares | $ 0.1075 | $ 0.1075 | $ 0.1075 | $ 0.1075 | $ 0.1058 | $ 0.4283 | ||
Cash distribution paid | $ | $ 5,268 | $ 5,257 | $ 4,981 | $ 4,602 | $ 4,480 | $ 19,320 | ||
Cash Distribution | OP Units | ||||||||
Class of Stock [Line Items] | ||||||||
Cash distribution paid (in dollars per share) | $ / shares | $ 0.1075 | $ 0.1075 | $ 0.1075 | $ 0.1075 | $ 0.1058 | $ 0.4283 | ||
Cash distribution paid | $ | $ 83 | $ 83 | $ 83 | $ 83 | $ 82 | $ 331 |
Incentive Share Plan (Narrative) (Details) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021
$ / shares
shares
|
Mar. 17, 2021
$ / shares
shares
|
Jan. 01, 2021
shares
|
Jul. 31, 2020
$ / shares
shares
|
Sep. 30, 2019
$ / shares
shares
|
Jun. 30, 2019
$ / shares
shares
|
Dec. 01, 2018
$ / shares
shares
|
Mar. 16, 2018
installment
shares
|
Sep. 06, 2017
$ / shares
shares
|
Mar. 31, 2022
USD ($)
shares
|
Mar. 31, 2021
USD ($)
|
Dec. 31, 2021
$ / shares
shares
|
Dec. 31, 2023
USD ($)
|
Dec. 31, 2022
USD ($)
|
May 11, 2017
shares
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Share-based compensation | $ | $ (1,329) | $ 1,468 | |||||||||||||
Restricted Stock | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Restricted stock granted (in shares) | 4,300 | ||||||||||||||
Number of equal installments | installment | 3 | ||||||||||||||
Restricted Stock | Market-Based Vesting (TSR Units) | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Award vesting period | 21 months | ||||||||||||||
Restricted stock granted to trustees, vested in period (in shares) | 208,210 | ||||||||||||||
Unrecognized compensation cost | $ | $ 1,100 | ||||||||||||||
Restricted Stock | Market-Based Vesting (TSR Units) | Shares issued 2020 | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Award vesting percentage | 50.00% | ||||||||||||||
Restricted Stock | Market-Based Vesting (TSR Units) | Shares issued 2021 | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Award vesting percentage | 150.00% | ||||||||||||||
Restricted Stock | Immediate Vesting (CIC Units) | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Restricted stock granted (in shares) | 965,000 | 455,000 | |||||||||||||
Grant date fair value (in dollars per share) | $ / shares | $ 13.05 | ||||||||||||||
Restricted Stock | Maximum | Market-Based Vesting (TSR Units) | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Award vesting percentage | 50.00% | ||||||||||||||
Time-Based Restricted Units | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Restricted stock granted (in shares) | 387,499 | ||||||||||||||
Performance Shares | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Award vesting period | 27 months | ||||||||||||||
Non-Cash Share Based Compensation in 2014 | Subsequent Event | Forecast | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Unrecognized compensation cost | $ | $ 1,600 | $ 800 | |||||||||||||
Common Stock | Market-Based Vesting (TSR Units) | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Stock granted to trustees, increase (decrease) (in shares) | 104,105 | ||||||||||||||
2008 Long-Term Equity Incentive Ownership Plan | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Shares authorized (in shares) | 3,433,831 | ||||||||||||||
2008 Long-Term Equity Incentive Ownership Plan | Restricted Common Shares and Restricted Share Units | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Award vesting percentage | 100.00% | ||||||||||||||
2008 Long-Term Equity Incentive Ownership Plan | Non-Vested Time Based Shares | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Unrecognized compensation cost | $ | $ 2,300 | ||||||||||||||
Unrecognized compensation cost, period for recognition | 27 months | ||||||||||||||
2008 Long-Term Equity Incentive Ownership Plan | Non-Cash Share Based Compensation in 2014 | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Unrecognized compensation cost, period for recognition | 19 months | ||||||||||||||
2018 Long-Term Equity Incentive Ownership Plan | Restricted Stock | Market-Based Vesting (TSR Units) | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Restricted stock granted (in shares) | 545,000 | 405,417 | 229,684 | 433,200 | |||||||||||
Performance period | 3 years | 3 years | 3 years | ||||||||||||
Grant date fair value (in dollars per share) | $ / shares | $ 5.55 | $ 8.22 | $ 14.89 | $ 4.17 | |||||||||||
Options to be converted to cash | 111,465 | ||||||||||||||
2018 Long-Term Equity Incentive Ownership Plan | Restricted Stock | Minimum | Market-Based Vesting (TSR Units) | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Award vesting percentage | 0.00% | 0.00% | 0.00% | ||||||||||||
2018 Long-Term Equity Incentive Ownership Plan | Restricted Stock | Maximum | Market-Based Vesting (TSR Units) | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Award vesting percentage | 200.00% | 200.00% | 200.00% | ||||||||||||
2018 Long-Term Equity Incentive Ownership Plan | Time-Based Restricted Units | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Restricted stock granted (in shares) | 530,000 | 17,069 | 317,184 | 433,200 | |||||||||||
Performance period | 3 years | 3 years | 3 years | ||||||||||||
Grant date fair value (in dollars per share) | $ / shares | $ 5.83 | $ 11.69 | $ 10.63 | $ 7.51 | |||||||||||
2018 Long-Term Equity Incentive Ownership Plan | Common Stock | Immediate Vesting (CIC Units) | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Restricted stock granted (in shares) | 2,490 | ||||||||||||||
Grant date fair value (in dollars per share) | $ / shares | $ 10.04 | ||||||||||||||
2018 Long-Term Equity Incentive Ownership Plan | Restricted Common Shares | Time-Based Vesting | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Restricted stock granted (in shares) | 5,500 | ||||||||||||||
Grant date fair value (in dollars per share) | $ / shares | $ 9.06 |
Incentive Share Plan (Schedule of Share-Based Incentive Plan Activity) (Details) - 2008 Long-Term Equity Incentive Ownership Plan - $ / shares |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Mar. 31, 2022 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Shares | |||
Non-vested, beginning balance (in shares) | 2,716,132 | ||
Granted (in shares) | 0 | 904,215 | 1,108,014 |
Vested (in shares) | 0 | (1,024,808) | (511,621) |
Forfeited (in shares) | (1,334,852) | ||
Non-vested, ending balance (in shares) | 1,381,280 | ||
Shares, Available for grant (in shares) | 1,664,210 | ||
Weighted Average Grant Date Fair Value | |||
Non-vested, ending balance (in dollars per share) | $ 8.35 | ||
Granted (in dollars per share) | 0 | $ 5.99 | $ 5.76 |
Forfeited (in dollars per share) | 8.29 | ||
Non-vested, beginning balance (in dollars per share) | $ 8.32 |
Incentive Share Plan (Schedule of Nonvested and Vested Shares Activity) (Details) - 2008 Long-Term Equity Incentive Ownership Plan - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Mar. 31, 2022 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares Granted, Non-Vested Shares Issued (in shares) | 0 | 904,215 | 1,108,014 |
Shares Granted, Weighted-Average Grant Date Fair Value (in dollars per share) | $ 0 | $ 5.99 | $ 5.76 |
Shares Vested (in shares) | 0 | (1,024,808) | (511,621) |
Shares Vested, Total Vest-Date Fair Value | $ 0 | $ 9,757 | $ 5,566 |
Grants to Trustees (Details) |
Dec. 13, 2021
trustee
$ / shares
shares
|
---|---|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of independent trustees (in trustees) | trustee | 5 |
Number of trustee emeritus (in trustees) | trustee | 1 |
Common Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted stock granted to trustees, vested in period (in shares) | shares | 29,825 |
Restricted stock granted to each trustee (in shares) | shares | 29,825 |
Restricted stock granted to trustees, weighted-average grant date fair value (in dollars per share) | $ / shares | $ 9.32 |
Real Estate (Details) $ in Millions |
Dec. 01, 2021
USD ($)
ft²
|
Jul. 08, 2021
USD ($)
ft²
|
Mar. 31, 2022
ft²
|
---|---|---|---|
Lakeside Market | |||
Real Estate [Line Items] | |||
Payments to acquire productive assets | $ | $ 53.2 | ||
Area of real estate property | ft² | 162,649 | 200,000 | |
Percent of property leased | 89.00% | 80.50% | |
Anderson Arbor | |||
Real Estate [Line Items] | |||
Payments to acquire productive assets | $ | $ 28.1 | ||
Area of real estate property | ft² | 89,746 | 100,000 |
Related Party Transactions - Narrative (Details) - Beneficial Owner |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
James C. Mastandrea | |
Related Party Transaction [Line Items] | |
Ownership percentage | 66.70% |
John J. Dee | |
Related Party Transaction [Line Items] | |
Ownership percentage | 20.00% |
Related Party Transactions - Revenue and Expenses (Details) - Pillarstone OP - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Property operation and maintenance | ||
Related Party Transaction [Line Items] | ||
Rent | $ (192) | $ (218) |
Other revenues | ||
Related Party Transaction [Line Items] | ||
Property management fee income | $ 140 | $ 140 |
Commitments and Contingencies (Details) $ in Millions |
Feb. 23, 2022
USD ($)
|
---|---|
Mastandrea v. Whitestone REIT and Certain Company Trustees | Pending Litigation | |
Loss Contingencies [Line Items] | |
Damages sought, value | $ 25 |
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