HOUSTON - Whitestone REIT (NYSE: NYSE:WSR), a community-focused real estate investment trust, has issued a letter to shareholders highlighting the success of its strategic overhaul under new leadership and raising concerns over the intentions of activist investor Erez Asset Management (Erez). The announcement comes ahead of the company's Annual Meeting of Stockholders on May 14, 2024.
Since early 2022, Whitestone has undergone significant changes including appointing David Holeman as CEO and David Taylor as Independent Chairman, which the company credits for improving operational performance and shareholder value. Whitestone reported a multi-year high occupancy rate of 94.2% in Q4 2023, a growth in Core Funds From Operations (FFO) per Share, and a reduction in leverage. Additionally, the company has resolved past litigation matters and refreshed its Board with new candidates to enhance corporate governance.
The company's reset strategy has reportedly resulted in a 25% total shareholder return from the start of Holeman's tenure through April 22, 2024, outperforming peers and the MSCI U.S. REIT index.
Whitestone's leadership has expressed concerns about Erez's strategy, which they believe could disrupt progress and potentially lead to short-term gains at the expense of long-term value. Erez has been advocating for a sale of assets or the company, which Whitestone's Board views as potentially detrimental under current market conditions.
The company has also pointed to Erez's past actions, particularly those of Mr. Schanzer, former CEO of Cedar Realty (NYSE:CDR) Trust, and Ms. Clark, former EVP of Transactions at RPT Realty (NYSE:RPT), as evidence of a track record of value destruction.
Whitestone is urging shareholders to vote for its slate of trustee nominees, emphasizing their qualifications and commitment to the company's long-term strategy. The Board has stressed the importance of maintaining its current direction to continue delivering results and maximizing shareholder value.
The information in this article is based on a press release statement from Whitestone REIT.
InvestingPro Insights
As Whitestone REIT (NYSE: WSR) approaches its Annual Meeting of Stockholders, investors are keenly observing the company's financial health and market performance. According to InvestingPro data, Whitestone REIT has a market capitalization of $568.03 million and a Price/Earnings (P/E) ratio of 29.37, indicating investor confidence in the company's earnings potential. Notably, the company's Price/Book ratio as of the last twelve months ending Q4 2023 stands at a reasonable 1.37, which could suggest that the company's stock is reasonably valued in relation to its assets.
InvestingPro Tips highlight that Whitestone REIT has maintained dividend payments for 15 consecutive years, showcasing a strong commitment to returning value to shareholders. This, coupled with a robust dividend yield of 4.35% as of the start of April 2024, positions the REIT as a potentially attractive option for income-focused investors.
Furthermore, analysts predict that Whitestone will be profitable this year, a sentiment echoed by the company's profitability over the last twelve months. These insights are particularly relevant as shareholders consider the company's future amidst activist investor pressures.
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