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To boost its liquidity position and financial flexibility, Whitestone REIT (WSR - Free Report) recently announced the amendment and extension of its $515 million credit facility. This was carried out through the company’s operating partnership, Whitestone REIT Operating Partnership, L.P. (the “Operating Partnership”).
The facility, which comprises a $250 million revolver and $265 million term loan, can be expanded up to $715 million through an accordion feature.
The $250 million revolver is set to mature on Sep 16, 2026, while the $265 million term loan expires on Jan 31, 2028. The maturity for the revolver can be prolonged to Sep 16, 2027, by exercising the two available options to extend its maturity by six months each.
The revolver bears an initial interest rate of secured overnight financing rate (SOFR) plus 1.60% and a 10-basis point (bps) credit spread adjustment.
Moreover, this community-centered real estate investment trust entered into interest rate swaps to fix the interest rates on the $265 million term loan.
Per Dave Holeman, Whitestone’s CEO, “The renewed credit facilities’ attractive terms reflect our strengthening balance sheet and provides us additional liquidity and financial flexibility.”
In addition, as part of the recast facility’s Environmental, Social and Governance (ESG) pricing provision, the applicable interest rate margin can be adjusted depending upon WSR’s performance on certain sustainability performance targets.
Whitestone REIT is engaged in acquiring, owning, operating and developing open-air retail centers in some of the fastest-growing markets of the United States, such as Phoenix, Austin, Dallas-Fort Worth, Houston and San Antonio.
These markets are usually located in high-traffic areas surrounded by high-household-income communities. This positions WSR well to capitalize on the market recovery in the retail real estate industry.
A well-diversified tenant base, comprising 1,592 tenants as of the June-quarter end, assures a steady revenue generation for the company. In the second quarter, WSR’s largest tenant accounted for only 2.5% of the annualized base rental revenues.
Moreover, a healthy balance-sheet position enables WSR to capitalize on various growth opportunities and further strengthen its portfolio. Its recent move to boost its liquidity and financial flexibility is in sync with this strategy.
Analysts seem bearish on the Zacks Rank #4 (Sell) stock.
The Zacks Consensus Estimate for the company’s 2022 funds from operations (FFO) per share has been revised 5.7% downward in the past two months.
Its shares have declined 8.7% in the past three months against the real estate market’s rally of 1.6%.
The Zacks Consensus Estimate for Prologis’ current-year FFO per share has moved marginally north in the past two months to $5.17.
The Zacks Consensus Estimate for Extra Space Storage’s ongoing year’s FFO per share has been raised marginally over the past month to $8.46.
The Zacks Consensus Estimate for Host Hotels & Resorts’ 2022 FFO per share has moved marginally upward in the past week to $1.80.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Whitestone (WSR) Ups Liquidity, Amends $515M Credit Facility
To boost its liquidity position and financial flexibility, Whitestone REIT (WSR - Free Report) recently announced the amendment and extension of its $515 million credit facility. This was carried out through the company’s operating partnership, Whitestone REIT Operating Partnership, L.P. (the “Operating Partnership”).
The facility, which comprises a $250 million revolver and $265 million term loan, can be expanded up to $715 million through an accordion feature.
The $250 million revolver is set to mature on Sep 16, 2026, while the $265 million term loan expires on Jan 31, 2028. The maturity for the revolver can be prolonged to Sep 16, 2027, by exercising the two available options to extend its maturity by six months each.
The revolver bears an initial interest rate of secured overnight financing rate (SOFR) plus 1.60% and a 10-basis point (bps) credit spread adjustment.
Moreover, this community-centered real estate investment trust entered into interest rate swaps to fix the interest rates on the $265 million term loan.
Per Dave Holeman, Whitestone’s CEO, “The renewed credit facilities’ attractive terms reflect our strengthening balance sheet and provides us additional liquidity and financial flexibility.”
In addition, as part of the recast facility’s Environmental, Social and Governance (ESG) pricing provision, the applicable interest rate margin can be adjusted depending upon WSR’s performance on certain sustainability performance targets.
Whitestone REIT is engaged in acquiring, owning, operating and developing open-air retail centers in some of the fastest-growing markets of the United States, such as Phoenix, Austin, Dallas-Fort Worth, Houston and San Antonio.
These markets are usually located in high-traffic areas surrounded by high-household-income communities. This positions WSR well to capitalize on the market recovery in the retail real estate industry.
A well-diversified tenant base, comprising 1,592 tenants as of the June-quarter end, assures a steady revenue generation for the company. In the second quarter, WSR’s largest tenant accounted for only 2.5% of the annualized base rental revenues.
Moreover, a healthy balance-sheet position enables WSR to capitalize on various growth opportunities and further strengthen its portfolio. Its recent move to boost its liquidity and financial flexibility is in sync with this strategy.
Analysts seem bearish on the Zacks Rank #4 (Sell) stock.
The Zacks Consensus Estimate for the company’s 2022 funds from operations (FFO) per share has been revised 5.7% downward in the past two months.
Its shares have declined 8.7% in the past three months against the real estate market’s rally of 1.6%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are Prologis (PLD - Free Report) , Extra Space Storage (EXR - Free Report) and Host Hotels & Resorts (HST - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
The Zacks Consensus Estimate for Prologis’ current-year FFO per share has moved marginally north in the past two months to $5.17.
The Zacks Consensus Estimate for Extra Space Storage’s ongoing year’s FFO per share has been raised marginally over the past month to $8.46.
The Zacks Consensus Estimate for Host Hotels & Resorts’ 2022 FFO per share has moved marginally upward in the past week to $1.80.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.