I had not planned on writing an article about Whitestone REIT (WSR) today but the market was screaming at me to do so.
Shopping Center and Mall REITS have taken a beating the past couple of weeks. The broad sell off was triggered by the poor income and revenue showings of many retailers stocks. So like investors tend to do they over react. They sell off anything remotely connected and in the process create bargains. Whitestone’s share price also declined because many investors are unhappy that they issued 7 million shares to pay for recent acquisitions. Perhaps these investors did not bother to read their Business Strategy clearly posted on their Web Site ! Here is what it states :
Our primary business objective is to increase shareholder value by acquiring, owning and operating Community Centered Properties™. The key elements of our strategy include:
Strategically Acquiring Properties
We seek to expand our geographic diversification by strategically acquiring commercial properties in high-growth markets. Our acquisition targets are located in densely populated, culturally diverse neighborhoods, primarily in and around Phoenix, Chicago, Dallas, San Antonio and Houston, five of the top 15 markets in the USA in terms of population growth. We may also pursue opportunities in other Southwestern and Western regions that are consistent with our Community Centered Property strategy.We believe that during the next several years there will be excellent opportunities in our target markets to acquire quality properties directly from owners, at historically attractive prices. Many of these assets may benefit from our management team’s experience in turning around financially distressed properties, portfolios and companies.
Redeveloping and Re-tenanting Existing Properties
We “turn around” properties and seek to add value through renovating and re-tenanting our properties to create Whitestone-branded Community Centered Properties™. We seek to accomplish this by (1) stabilizing occupancy, with per property occupancy goals of 90% or higher; (2) adding leasable square footage to existing structures; (3) developing and building on excess land; (4) upgrading and renovating existing structures; and (5) investing significant effort in recruiting tenants whose goods and services meet the needs of the surrounding neighborhood.
Recycling Capital for Greater Returns
We seek to continually upgrade our portfolio by opportunistically selling properties that do not have the potential to meet our Community Centered Property strategy and redeploying the sale proceeds into properties that better fit our strategy. Some of our properties which were acquired prior to the tenure of our current management team may not fit our Community Centered Property strategy, and we may look for opportunities to dispose of these properties as we continue to execute our strategy
It sure seems clear to me !
Some property pictures of recent acquisitions
Whitestone REIT which was founded in 1998 now owns over 70 properties which are primarily located in Texas and Arizona. Some would see the lack of geographical diversity as a negative but because these are growing markets a and Whitestone targets the more upscale neighborhoods ( average income exceeds $75 thousand a year) and because they are concentrated I believe that it gives them an advantage of fully understanding their markets.
I personally already owned a sizable position in Whitestone REIT but yesterday added an additional 300 shares @ $10.98 per share. That was at a whopping 10.38% yield that I could not just pass up on a stock that I believed in. Since the dividend has remained at $1.14 per share since 2012 but with a current yield over 10% who needs dividend growth? After all – One in the hand equals two in the bush – right?
If you are a Dividend Income Investor or looking to beef up your portfolios yield this is definitely a stock you may just want to take a closer look at. Retail might be struggling and going through some changes but its far from dead and Whitestone REIT will provide income for a good many more years.
For more information please visit the Whitestone REIT website.
Read previous article: Whitestone REIT Acquiring two Retail Centers
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