AAP Podcast # 48 – The 411 on REITS with David Holeman, CEO of Whitestone REIT

On this week’s AAP Podcast, Chris Versace is joined by David Holeman, CEO of Whitestone REIT (WSR), which focuses on open-air retail centers, primarily in the US Sunbelt. The conversation is an excellent primer for listeners about the REIT sector. It includes how REIT management thinks about their portfolio and tenant composition over time, the data they examine when choosing a location, and how they stagger their rental agreements.

 

Our takeaway from the conversation is that while Whitestone REIT may be a smaller REIT by size, its monthly dividend and focus on meeting the needs of its surrounding communities makes it a standout. From an AAP portfolio perspective, while we like the Whitestone story, the market cap and average trading volume are simply too small for us to consider, but folks that like small-cap, income-generating plays may want to dig further.

 

During the conversation with Versace, Holeman shares that after a few economic cycles during his time at Whitestone, he and the management team look to remain nimble while focusing on evolving consumer needs in and around Whitestone’s centers. This meant pivoting toward consumer services as e-commerce changed the landscape for traditional retailers. The conversation touches on two pillars of growth for Whitestone including continued expansion and the cycling of rental agreements that tend to include rate increases. Holeman shares the existing team could grow to more than 100 centers vs. the 56 it had exiting the recent June quarter. Given the interest rate environment, the expansion strategy is likely to favor buying and rehabbing existing centers in the near term.