Whitestone REIT Expands and Extends $750 Million Credit Facility

Rhea-AI Summary

Whitestone REIT (NYSE:WSR) has successfully amended and expanded its credit facility to $750 million, consisting of a $375 million revolver and $375 million term loan. The revolver matures in September 2029 with two six-month extension options, while the term loan matures in January 2031.

The facility features improved terms including lower interest rates, with the revolver at SOFR plus 1.40% and the term loan at SOFR plus 1.35%. Through interest rate swaps, the company has fixed the term loan rates between 3.36% and 3.42% (plus 1.35%) until maturity. The renewal represents a $215 million increase in facility size and extends the weighted average maturity to 2030, with no maturities due in 2026.

The improved terms reflect Whitestone's strengthened operations and financial position, supporting their target of 5-7% Core FFO per share growth for 2026-2028.

Positive

• Credit facility expanded by $215 million to $750 million total
• Secured lower interest rates on both revolver and term loan components
• Extended maturity dates to 2029 (revolver) and 2031 (term loan)
• Reduced variable debt exposure to approximately 12%
• Improved capitalization rate from 7% to 6.75% for valuation purposes
• Added three new banks to the lending group

Negative

• Increased total debt exposure with larger facility size
• Still maintains some variable rate exposure (12% of debt)

Insights

Financial Analyst

Whitestone's expanded $750M credit facility strengthens financial position with lower rates, extended maturities, and reduced variable debt exposure.

Whitestone REIT's $750 million credit facility amendment represents a significant enhancement to the company's financial foundation. The facility includes a $375 million revolver maturing in September 2029 (with two six-month extension options) and a $375 million term loan maturing in January 2031. This represents a substantial $215 million increase from their previous facility.

The pricing terms are notably favorable, with initial interest rates of SOFR plus 1.40% for the revolver and SOFR plus 1.35% for the term loan. The company wisely locked in fixed rates on the entire term loan portion through interest rate swaps, securing rates between 3.36% and 3.42% (plus 1.35%) until maturity, substantially mitigating interest rate risk.

This transaction significantly improves Whitestone's debt profile in several ways. It extends their weighted average debt maturity to 2030 while eliminating any 2026 maturities, creates a smoother maturity ladder, and reduces variable-rate debt exposure to approximately 12% of total debt. The improved 6.75% capitalization rate (down from 7%) reflects lenders' growing confidence in the quality of Whitestone's real estate portfolio.

The expansion of their banking relationships to include three new lenders demonstrates broader market confidence in Whitestone's strategy and performance. This enhanced liquidity position provides greater flexibility for potential acquisitions, property improvements, or other capital allocation opportunities that support their 5-7% Core FFO growth targets through 2028.

HOUSTON, Sept. 22, 2025 (GLOBE NEWSWIRE) -- Whitestone REIT (NYSE: WSR) (“Whitestone” or the “Company”) today announced that through its operating partnership, Whitestone REIT Operating Partnership, L.P. (the “Operating Partnership”), it has amended, expanded and extended its $750 million credit facility, comprised of a $375 million revolver and $375 million term loan. The revolver is scheduled to mature in September 2029 with two six-month options to extend the maturity date and the term loan is scheduled to mature in January 2031.

The revolver has an initial interest rate of SOFR plus 1.40%⁽¹⁾ and the term loan has an initial interest rate of SOFR plus 1.35%. In addition, the Company entered into interest rate swaps to fix the interest rates on the $375 million term loan, locking in a rate between 3.36% and 3.42% (plus 1.35%) until maturity.

The renewal of the credit facility accomplishes several key objectives:

• Locks down a key earnings variable, strengthening Whitestone’s ability to hit their 5 – 7% Core FFO per share growth target in 2026, 2027 and 2028
• Extends Whitestone’s weighted average maturity date out to 2030 with no maturities due in 2026
• Reduces Whitestone’s current variable debt to approximately 12%
• Provides additional borrowing capacity
• Expands the company’s bank group
  
  

“We are very pleased with the new facility, which includes a $215 million increase in size, lower interest rates, extended maturities and the addition of 3 strong new banks. Among the positive changes from the previous agreement was a lowering of the interest rate and an improvement in the capitalization rate used for valuation from 7% to 6.75%. These, and other improvements reflect the continued strengthening of our operations and financial position, and will provide additional liquidity and financial flexibility,” said Dave Holeman, Whitestone’s CEO. “Since our last extension in 2022, we have improved our leverage metrics by driving EBITDAre up, delivering top quartile Same Store Net Operating Income Growth and focusing on disciplined, effective capital spending. This agreement builds on the progress we’ve made over the last 3 years and lays the groundwork for additional consistent growth.”

The co-lead arrangers and joint-book runners for the facility were BMO Capital Markets Corp., BofA Securities, Inc., Capital One, National Association, Citizens Bank, N.A, KeyBanc Capital Markets Inc., Truist Securities, Inc., and U.S. Bank National Association.

⁽¹⁾ Based on the Company’s current leverage ratio as defined in the facility. Please see today’s 8-K for more detail.

About Whitestone REIT

Whitestone REIT (NYSE: WSR) is a community-centered real estate investment trust (REIT) that acquires, owns, operates, and develops open-air, retail centers located in some of the fastest growing markets in the country: Phoenix, Austin, Dallas-Fort Worth, Houston and San Antonio. 

Our centers are convenience focused: merchandised with a mix of service-oriented tenants providing food (restaurants and grocers), self-care (health and fitness), services (financial and logistics), education and entertainment to the surrounding communities. The Company believes its strong community connections and deep tenant relationships are key to the success of its current centers and its acquisition strategy. For additional information, please visit the Company's investor relations website.

Forward-Looking Statements

This Report contains forward-looking statements within the meaning of the federal securities laws, including discussion and analysis of our financial condition, pending acquisitions and the impact of such acquisitions on our financial condition and results of operations, anticipated capital expenditures required to complete projects, amounts of anticipated cash distributions to our shareholders in the future and other matters. These forward-looking statements are not historical facts but are the intent, belief or current expectations of our management based on its knowledge and understanding of our business and industry. Forward-looking statements are typically identified by the use of terms such as “may,” “will,” “should,” “potential,” “predicts,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates” or the negative of such terms and variations of these words and similar expressions, although not all forward-looking statements include these words. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements.

Factors that could cause actual results to differ materially from any forward-looking statements made in this Report include: the imposition of federal income taxes if we fail to qualify as a real estate investment trust (“REIT”) in any taxable year or forego an opportunity to ensure REIT status; uncertainties related to the national economy, the real estate industry in general and in our specific markets; legislative or regulatory changes, including changes to laws governing REITs; adverse economic or real estate developments or conditions in Texas or Arizona, Houston and Phoenix in particular, including the potential impact of COVID-19 on our tenants’ ability to pay their rent, which could result in bad debt allowances or straight-line rent reserve adjustments; inflation and increases in interest rates, operating costs or general and administrative expenses; availability and terms of capital and financing, both to fund our operations and to refinance our indebtedness as it matures; decreases in rental rates or increases in vacancy rates; litigation risks; lease-up risks, including leasing risks arising from exclusivity and consent provisions in leases with significant tenants; our inability to renew tenant leases or obtain new tenant leases upon the expiration of existing leases; our inability to generate sufficient cash flows due to market conditions, competition, uninsured losses, changes in tax or other applicable laws; geopolitical conflicts, such as the ongoing conflict between Russia and Ukraine; the need to fund tenant improvements or other capital expenditures out of operating cash flow; and the risk that we are unable to raise capital for working capital, acquisitions or other uses on attractive terms or at all and other factors detailed in the Company's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents the Company files with the Securities and Exchange Commission from time to time.

Non-GAAP Financial Measures

This release contains supplemental financial measures that are not calculated pursuant to U.S. generally accepted accounting principles (“GAAP”) including EBITDAre, FFO, Core FFO, NOI and Same Store NOI. Following are explanations and reconciliations of these metrics to their most comparable GAAP metric.

EBITDAre: The National Association of Real Estate Investment Trusts (“NAREIT”) defines EBITDAre as net income computed in accordance with GAAP, plus interest expense, income tax expense, depreciation and amortization and impairment write-downs of depreciable property and of investments in unconsolidated affiliates caused by a decrease in value of depreciable property in the affiliate, plus or minus losses and gains on the disposition of depreciable property, including losses/gains on change in control and adjustments to reflect the entity’s share of EBITDAre of the unconsolidated affiliates and consolidated affiliates with non-controlling interests. We calculate EBITDAre in a manner consistent with the NAREIT definition. Management believes that EBITDAre represents a supplemental non-GAAP performance measure that provides investors with a relevant basis for comparing REITs. There can be no assurance the EBITDAre as presented by the Company is comparable to similarly titled measures of other REITs. EBITDAre should not be considered as an alternative to net income or other measurements under GAAP as indicators of operating performance or to cash flows from operating, investing or financing activities as measures of liquidity. EBITDAre does not reflect working capital changes, cash expenditures for capital improvements or principal payments on indebtedness.

FFO: Funds From Operations: NAREIT defines FFO as net income (loss) (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains or losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. We calculate FFO in a manner consistent with the NAREIT definition and also include adjustments for our unconsolidated real estate partnership.

Core Funds from Operations (“Core FFO”) is a non-GAAP measure. From time to time, we report or provide guidance with respect to “Core FFO” which removes the impact of certain non-recurring and non-operating transactions or other items we do not consider to be representative of our core operating results including, without limitation, default interest on debt of real estate partnership, extinguishment of debt cost, gains or losses associated with litigation involving the Company that is not in the normal course of business, and proxy contest costs.

Management uses FFO and Core FFO as a supplemental measure to conduct and evaluate our business because there are certain limitations associated with using GAAP net income alone as the primary measure of our operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Because real estate values instead have historically risen or fallen with market conditions, management believes that the presentation of operating results for real estate companies that use historical cost accounting is insufficient by itself. In addition, securities analysts, investors and other interested parties use FFO as the primary metric for comparing the relative performance of equity REITs. FFO and Core FFO should not be considered as alternatives to net income or other measurements under GAAP, as an indicator of our operating performance or to cash flows from operating, investing or financing activities as a measure of liquidity. FFO and Core FFO do not reflect working capital changes, cash expenditures for capital improvements or principal payments on indebtedness. Although our calculation of FFO is consistent with that of NAREIT, there can be no assurance that FFO and Core FFO presented by us is comparable to similarly titled measures of other REITs.

NOI: Net Operating Income: Management believes that NOI is a useful measure of our property operating performance. We define NOI as operating revenues (rental and other revenues) less property and related expenses (property operation and maintenance and real estate taxes). Other REITs may use different methodologies for calculating NOI and, accordingly, our NOI may not be comparable to other REITs. Because NOI excludes general and administrative expenses, depreciation and amortization, deficit in earnings of real estate partnership, interest expense, interest, dividend and other investment income, provision for income taxes, gain on sale of properties, loss on disposal of assets, and includes NOI of real estate partnership (pro rata) and net income attributable to noncontrolling interest, it provides a performance measure that, when compared year-over-year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact to operations from trends in occupancy rates, rental rates and operating costs, providing perspective not immediately apparent from net income. We use NOI to evaluate our operating performance since NOI allows us to evaluate the impact that factors such as occupancy levels, lease structure, lease rates and tenant base have on our results, margins and returns. In addition, management believes that NOI provides useful information to the investment community about our property and operating performance when compared to other REITs since NOI is generally recognized as a standard measure of property performance in the real estate industry. However, NOI should not be viewed as a measure of our overall financial performance since it does not reflect the level of capital expenditure and leasing costs necessary to maintain the operating performance of our properties, including general and administrative expenses, depreciation and amortization, equity or deficit in earnings of real estate partnership, interest expense, interest, dividend and other investment income, provision for income taxes, gain on sale of properties, and gain or loss on sale or disposition of assets.

Same Store NOI: Management believes that Same Store NOI is a useful measure of the Company’s property operating performance because it includes only the properties that have been owned for the entire period being compared, and that it is frequently used by the investment community. Same Store NOI assists in eliminating differences in NOI due to the acquisition or disposition of properties during the period being presented, providing a more consistent measure of the Company’s performance. The Company defines Same Store NOI as operating revenues (rental and other revenues, excluding straight-line rent adjustments, amortization of above/below market rents, and lease termination fees) less property and related expenses (property operation and maintenance and real estate taxes), Non-Same Store NOI, and NOI of our investment in Pillarstone OP (pro rata). We define “Non-Same Stores” as properties that have been acquired since the beginning of the period being compared and properties that have been sold, but not classified as discontinued operations. Other REITs may use different methodologies for calculating Same Store NOI, and accordingly, the Company's Same Store NOI may not be comparable to that of other REITs.

Investor and Media Contact:

David Mordy
Director of Investor Relations
Whitestone REIT
(713) 435-2219
ir@whitestonereit.com

FAQ

What are the key terms of Whitestone REIT's (NYSE:WSR) new credit facility?

The new $750 million facility includes a $375 million revolver maturing in 2029 and a $375 million term loan maturing in 2031. The revolver's interest rate is SOFR plus 1.40%, and the term loan's rate is SOFR plus 1.35%.

How much did Whitestone REIT increase its credit facility by in September 2025?

Whitestone REIT increased its credit facility by $215 million, expanding it to a total of $750 million.

What is the maturity schedule for Whitestone REIT's new credit facility?

The revolver matures in September 2029 with two six-month extension options, while the term loan matures in January 2031. The company has no maturities due in 2026.

How will the new credit facility impact Whitestone REIT's growth targets?

The facility helps secure Whitestone's ability to achieve their 5-7% Core FFO per share growth target for 2026-2028 by locking down key earnings variables and providing additional borrowing capacity.

What is Whitestone REIT's variable debt exposure after the new credit facility?

Following the credit facility renewal and interest rate swaps implementation, Whitestone's variable debt exposure has been reduced to approximately 12% of total debt.