Whitestone Reit sees continued strong occupancy rates in Q4 2012
Whitestone Reit, a real estate investment trust that acquires, owns and operates community centred properties, has reported continued strong occupancy levels for the fourth quarter ended 31 December 2012.
The physical occupancy of its operating portfolio, which excludes new acquisitions, and properties which are undergoing significant redevelopment or re-tenanting, was 87 per cent as of 31 December 2012, unchanged from the prior quarter and previous year. The company’s total occupancy was 85 per cent as of the end of the current quarter, a one per cent increase over the year-ago quarter ended 31 December 2011.
Whitestone’s acquisition and leasing strategies are interdependent to its growth. The acquisition team closed USD108m in new acquisitions in 2012, approximately 500,000 square feet with an average occupancy of 70 per cent. The leasing team signed 78 leases totalling 192,376 square feet in new, expansion, and renewal leases during the fourth quarter, adding 41 new tenants to its roster of primarily small entrepreneurial retail service business tenants. Whitestone currently has about 1,065 total tenants, an increase of 17 per cent since 31 December 2011, of which 70 per cent lease space that is less than 3,000 sf, provide retail services as opposed to goods to the surrounding community, and are located in multi-cultural neighbourhoods.
“We continue to make progress as our small space business model sets us apart in the retail Reit space and delivers positive results. Small business has an impact on the economy and is enhancing efficiencies by localising in communities,” says James C Mastandrea (pictured), Whitestone’s chairman and chief executive officer. “The number of our tenants is increasing, the size of our tenants leased space is becoming relatively smaller, and the rental rate for smaller spaces is relatively higher, and our base revenue is growing.
“The average lease size in 2012 was 2,121 square feet compared to 2,555 square feet in 2011. The total lease value of new and renewal leases in 2012 was USD35.2m, versus USD32.3m in 2011, an increase of nine per cent.
“Our tenants are entrepreneurs in service-oriented businesses that target the immediate neighbourhood surrounding our community centres. New acquisitions provide inventory—properties with lower occupancies—to lease and grow our overall occupancies, thus increasing revenue, net operating income and net asset value. Our leasing results and continued strong occupancy for the quarter are consistent with recent national survey data that indicates small business owners are extremely optimistic about the growth of their businesses in 2013, and expect their sales and finances to improve.”