Whitestone REIT (NYSE:WSR) Q3 2025 Earnings Call Transcript

Whitestone REIT (NYSE:WSR) Q3 2025 Earnings Call Transcript October 30, 2025

Operator: Greetings, and welcome to the Whitestone REIT Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Mr. David Mordy. Please go ahead.

David Mordy: Good morning and thank you for joining Whitestone REIT’s Third Quarter 2025 Earnings Conference Call. Joining me on today’s call are Dave Holeman, Chief Executive Officer; Christine Mastandrea, President and Chief Operating Officer; and Scott Hogan, Chief Financial Officer. Please note that some statements made during this call are not historical and may be deemed forward-looking statements. Actual results may differ materially from those forward-looking statements due to a number of risks, uncertainties and other factors. Please refer to the company’s earnings news release and filings with the SEC, including Whitestone’s most recent Form 10-Q and 10-K for a detailed discussion of these factors. Acknowledging the fact that this call may be webcast for a period of time, it is also important to note that this call includes time-sensitive information that may be accurate only as of today’s date, October 30, 2025.

The company undertakes no obligation to update this information. Whitestone’s earnings news release and supplemental operating and financial data package have been filed with the SEC and are available on our website in the Investor Relations section. We published third quarter 2025 slides on our website yesterday afternoon, which highlight topics to be discussed today. I will now turn the call over to Dave Holeman, our Chief Executive Officer.

David Holeman: Thanks, David. Good morning, and thanks again for joining our call. We’ve got a number of great things to discuss this quarter, so I’ll start in with some highlights for the quarter and our overall achievements. We hit 94.2% occupancy this quarter, up 30 basis points from Q2. This is near record occupancy and given that the fourth quarter is typically our strongest leasing quarter, we’re set up for a very strong finish to the year. We delivered 4.8% same-store net operating income growth for the quarter, again, fueled by increases across the spectrum of shop space leases, various tenant types in both Texas and Arizona. The quality of our portfolio continues to be recognized by third parties as Green Street has now increased our TAP score by 5 points since Green Street started scoring our portfolio 2.5 years ago.

In that time, the 5-point increase leads the peer group and is a testament to the strength of our acquisitions, our operations and our recycling efforts, as well as the demographic trajectory of the area surrounding our properties. We extended and improved the terms of our credit facility, locking down one of the key variables for us to achieve our long-term 5% to 7% core FFO per share growth target. Scott will provide greater detail on our debt metrics in his remarks. We’re near completion on redevelopment for La Mirada in Scottsdale. We’re in full swing on our work at Lion Square in Houston, and we’ve kicked off redevelopment at Terravita in Scottsdale. We forecasted that redevelopment will add up to 1% to Whitestone’s same-store NOI growth with a $20 million to $30 million capital spend over the next couple of years, and we’re on track to have this initiative deliver in 2026.

And our average base rent is now $25.59, an 8.2% increase over the third quarter last year and a 26% increase versus this quarter 4 years ago, translating to a 5.9% compound annual growth rate. Specific to this quarter, we delivered $0.26 in core FFO per share. As a reminder, we typically have a lift of a couple of cents in the fourth quarter versus the third quarter as a result of new lease commencements and percent of sales clauses that trigger as we close out the year. Straight-line leasing spreads were 19.3% for the quarter, our 14th consecutive quarter above 17% on leasing spreads. So those are the recent highlights. Let me go on now to talk a little about what we have planned ahead. Our path forward is clear: deliver on consistent earnings growth, deliver on the targets we’ve put in front of our investors and if you have any doubts about our ability to deliver these results and don’t see the value of our differentiated business model, come talk to us, dig into our great results and come see our properties.

We know many investors have asked themselves, why not Whitestone? How is this small cap delivering growth that’s larger than many of our peers? Don’t accept a quick inaccurate answer. We’ll help you understand the building blocks underpinning our 5% to 7% core FFO growth target and we’ll help you understand why our cash flows are very durable. Because our success is rooted in operations, we believe investors gain a tremendous amount by seeing our operations. We’ll be at REIT World in Dallas this December, we’ll be showing investors properties on Monday, December 8, and we’ll have one-on-ones on Tuesday. We hope you’ll be able to join us at this conference. As part of our ongoing asset recycling efforts, we disposed of one property this quarter, Sugar Park Plaza in Houston.

Over the last 3 years, we have increased the NOI in this property by 22% by transforming the center into a grocery-anchored center and remerchandising the shop space and the time was right to sell and deploy the proceeds where we can create greater value over the coming years. This disposition brings our total acquisitions and dispositions over the past 3 years to approximately $150 million. I anticipate we’ll have a couple more acquisitions very shortly and should have 1 to 2 dispositions to finish out the year. Our markets are continuing to show significant strength as Texas and Arizona’s business-friendly environments and strong demographic trends continue to support demand. Our acquisition team continues to identify neighborhoods with upwardly mobile consumers where our leasing team can have the greatest impact applying our business model.

And in closing, we remain steadfast in our belief that a company with a well-aligned forward-thinking team, a well-located portfolio with a concentration of high-value shop space properly anchored to the community can outperform the herd. I look forward to connecting with investors in the months ahead, and I look forward to being able to lay out our 2026 plan on the fourth quarter call. Christine?

Christine C. Mastandrea: Good morning, everyone. On the leasing front, we had a strong quarter, and we’re accelerating as we close in on year-end. We signed $29.1 million in total lease value with spreads on new leases at 22.5% and renewals at 18.6% for a combined 19.3% on a straight-line leasing spreads. Same-store NOI growth was 4.8% for the quarter, allowing us to raise the lower end of the same-store NOI growth target by 50 basis points. Foot traffic across the portfolio was up 4% versus the third quarter of 2024. That’s a good indicator we’ve got in terms of the health of the consumer specific to our footprint and our locations. What we’re seeing in terms of successful tenants right now are those that are successfully expanding on their offerings.

For restaurants, delivery services have gone from a nice add to a critical component of the business. In addition, we continue to see an expansion of beauty, health, wellness, fitness and see the spend on overall health and mental wellness continues to increase. Understanding these avenues for the tenant success is critical for Whitestone to stand top as we curate our centers to the neighborhood needs. On the redevelopment front, we’ve completed the facade renovation at La Mirada, which puts us on track to finish this by year-end. And at Lion Square, the transformation of striking is about 75% complete. With the redevelopment at Lion Square, the grocery we brought in last year at Sun Wing will expand, creating value by making this grocery-anchored center the heart of Houston’s Asia town.

Now we’re kicking off the facade work at Terravita, which we talked about on the second earnings call, bringing in the Pickler and ACE hardware. This will further accelerate the transformation of the center, which is experiencing dynamic growth as a result of TSMC’s nearby semiconductor fabrication facility. We also generally move a couple of pads into action each year. This year, we created a pad at Lakeside in Dallas and brought in Central National Bank on that pad. We also signed a tenant for a pad at Scottsdale Commons. As a reminder, we purchased Scottsdale Commons in 2024, so the creation of the new pad represents a significant value creation pretty rapidly post acquisition. We anticipate bringing a couple of pads — additional pads online in 2026 as well.

We continue to see pickleball succeed as the demand with the younger demographic accelerates. We’re looking at bringing pickleball on the roof of Boulevard, which is adding value to where we had no income stream for that square footage previously and welcome this as an opportunity to add value also for the office community in the area. On the last several calls, we’ve talked about the intentional design of our business model to benefit from change, both in terms of change allowing us to enhance our growth trajectory and change enabling us to ensure more durable cash flows, a key component of what we do proactively tracking and understanding consumer behavior and capitalizing on that knowledge, we will see change as the result of 3 primary forces.

First, change is a result of generational shifts as the younger generations step up into new roles, both as consumers and business owners. Two, migratory change as consumers move to more business-friendly areas and take advantage of opportunities there, such as our markets and what we’ve seen over the last number of years. And number three, technological change as both consumers and businesses become more sophisticated in utilizing technology and as spending patterns shift accordingly. Both generational change and migratory change show up in the Esri data, heavily used by our acquisitions team and our leasing team. Migratory change is a bit slower moving, but also critically component for acquisition team to get it right. The Houston metro area has added nearly 2 million people over the last 15 years, while the Phoenix Metro area has added 1 million residents during that time as well.

Ensuring we benefit from that phenomenal growth is very important in terms of Whitestone’s success. All 3 types of change also impact the consumer data that we — and traffic data that we follow and Pacer AI. This is critical for leasing, but is key in our underwriting process. Our assessment of the business’ ability to meet the future consumer demands weighs heavily into our decisions to move forward on any lease we sign. For all of our leasing agents, our weekly leasing meetings provide an opportunity to discuss what changes we’re seeing as they interact with their neighborhoods and the tools they’re using to evaluate those changes around our centers. The biggest takeaway for investors here is that our ability to translate change into a higher same-store NOI growth starts with our assets and our business model, but also relies heavily on technology, but ultimately needs to be embedded in our culture and our processes to which Whitestone delivers our results.

We delivered strong finishes in both 2023 and 2024, and the team here is pushing hard to take advantage of the year-end dynamics and close leases. And with that, I turn it over to Scott to cover the financials.

J. Scott Hogan: Thank you, Christine. This morning, we reiterated our 2025 $1.03 to $1.07 core FFO per share guidance, improved our same-store NOI growth range to 3.5% to 4.5% and reiterated our long-term growth rates. On our leverage metrics, we’re making steady progress, and I anticipate our fourth quarter annualized debt-to-EBITDAre ratio will be in the mid to high 6s. The most significant development this quarter on the financial side was our amended and extended credit facility. We accomplished everything we wanted to accomplish here in large part because of the actions we’ve taken over the last 3 years. We were able to expand our bank group and improve Whitestone’s valuation cap rate to 6.75% because there was wide recognition that we are consistently delivering and we have steadily increased the value of our properties through our focused strategy and strong execution.

We increased the size of the facility to put Whitestone on par with our size-based peers in terms of available revolver credit capacity, and we expect to continue our debt leverage improvement initiative over the coming quarters and years. We fixed an increased percentage of our overall debt, bringing the weighted average term on all of our debt to 4.3 years and the weighted average rate on our fixed debt to 4.8%. Most importantly, locking down our debt clears the runway for us to focus on executing our plan and delivering core FFO per share growth for shareholders. I will note that included in the quarter is approximately $800,000 of debt extinguishment costs related to our refinancing. We have adjusted for this amount in our core FFO. Our revenue for the quarter was up 6% and most importantly, the quality of revenue continues to strengthen as evidenced by our improvement in uncollectible accounts and downward revision to our full year bad debt guidance.

Our total headcount is down 6% from a year ago, and we continue to focus on lowering G&A cost as we scale. As a reminder, our dividend is well covered with a healthy payout ratio, and we expect to grow the dividend in sync with earnings growth. And with that, I’ll conclude my comments and open the line for questions.

Q&A Session

Operator: [Operator Instructions] And our first question will come from Mitch Garman with JMP Securities.

Unknown Analyst: This is Jody on for Mitch. Just a few questions here. The first one being, so the rent expirations in 2026, the average rent is higher than average there. Should we expect similar leasing spreads as in recent quarter? I think it was 17% for the next year or so?

David Holeman: Thanks, Jody. This is Dave. I’ll start out, and Christine may want to add some granularity. But there’s always mix when you look at the — one of the things about our tenants are we have a highly diversified tenant base with 1,500 tenants. So, in any particular year, you do have some mix, but there’s nothing unique about next year’s rental rates. We continue to see really strong leasing demand, and there’s no sign of any weakening in our leasing spreads. So great quarter this quarter. I think our — I can’t remember the number, but we’ve had many quarters over 17%. I think it’s been about 3 years. And so I’ll let Christine add anything she wants to add.

Christine C. Mastandrea: We don’t see anything distinguishing next year any different than this past year. We see — we expect that we’re going to continue to see the same rate of leasing spreads, if not more, continue because there’s just such a demand for retail space.

Unknown Analyst: Okay. That’s very helpful. Secondly, could you give any more information on the change in occupancy? I think the larger centers increase in occupancy and the smaller ones, occupancy went down. So any more details there?

David Holeman: It’s the same thing that we’ve been doing in the past couple of years where we’re taking some space back. And the purpose for that on the smaller spaces is we see the opportunity for higher revenue and stronger quality tenants that we want to bring in. We have been doing that for the last couple of years, and we continue to do so going forward. So there’s been a number of small spaces that we’ve taken back, and we expect to put to work with a higher income stream based off of our leasing efforts. And then we did fill a couple of larger spaces this year. And much of that timing has to do with just city approvals and the timing that we can bring that revenue online.

J. Scott Hogan: Hey, Jody, I might also just remind everyone that we report fully commenced occupancy. So I know many of our peers report leased and commenced Whitestone’s 94.2% is tenants are in the space. And so continuing to see good trends in occupancy. I think we were up 30 basis points just over the second quarter. And I think as we said in our remarks, fourth quarter tends to be a very good time period for us. And so we’re excited about finishing out the year strong.

Unknown Analyst: Okay. And the last one for me here is if you all have any update on the Pillarstone JV?

David Holeman: I’m glad to give an update, Jody. I will encourage everyone to we’ll file our 10-Q shortly, and it has a very detailed description of the activities that have gone on. What I will say is, we’re nearing the end. We’ve talked about — we’re in the collection phase of just collecting our funds from the partnership. The court recently — there was recently a settlement agreement filed with the court, and we expect that to be approved. And with that, there would be a distribution of proceeds. But I encourage you — very shortly, I encourage you to read the 10-Q because it gives all of the details. But the short answer is we have reached a settlement with the court. The court has to approve that settlement. And if it is done, then the proceeds are expected to be distributed by — in December.

Unknown Analyst: I’m looking forward to that and good luck the next quarter.

Operator: Our next question comes from Gaurav Mehta with Alliance Global Partners.

Gaurav Mehta: I wanted to ask you on your leverage comments, mid to high 6s in 4Q. It seems like it was 7.2% as of 3Q. So, just want to get some more color on assumptions driving leverage lower in this quarter.

J. Scott Hogan: I’m sorry, Gaurav, it’s Scott here. I didn’t catch the whole question. Are you asking about the leverage ratios?

Gaurav Mehta: Yes. I think you mentioned mid to high 6s expected in 4Q from 7.2% as of 3Q. So I just want to get some more color on the assumptions driving leverage lower.

J. Scott Hogan: Sure. So, I think there’s 2 pieces to the puzzle. We continue to improve the balance sheet, and we’re focused on that and then operations continue to improve. The fourth quarter is, as Dave mentioned before, usually one of our — is our strongest quarter normally. We have percent sales breakpoints that are hitting the fourth quarter. And so on an annualized basis, we do expect the fourth quarter to be in the mid to high 6% range on debt-to-EBITDAre. And then we think we’ll continue to improve our balance sheet as we move forward. This year, there’s been a little bit of timing in our recycling efforts. The acquisitions have gotten ahead of the dispositions, but we think we’ll balance those out as we move forward.

Gaurav Mehta: Okay. A follow-up on acquisitions and dispositions. I think in the prepared remarks, you said you’re expecting some acquisitions shortly. And then you also mentioned a few more dispositions. So just in terms of timing, is that expected this quarter?

J. Scott Hogan: Yes. We expect — I think I said in my remarks, Gaurav, that we’ve got — what we expect is a couple more acquisitions and 1 to 2 dispositions to finish out the year. So that would be expected to occur in the fourth quarter. I think what you’ll see is consistent with what we’ve done in the past, looking at properties that fit Whitestone’s model, continuing to upgrade the portfolio. I think we’ve got a chart in our investor deck that lays out what we’ve done where we’ve bought properties that have what we believe is much more upside in better areas and sold properties that we see less growth in the future. So just continuing what we’re doing with a couple of those for the balance of the year. And as we’ve said, we’re fairly well balancing the assets, acquisitions and dispositions at this point.

Operator: [Operator Instructions] We’ll go next to Craig Kucera with Lucid Capital Markets.

Craig Kucera: Scott, you had a fairly large pickup in real estate tax accruals this quarter. Can you talk about your expectations for the year in regard to real estate tax?

J. Scott Hogan: Sure. Yes. So, it’s mainly Texas. Texas has a choppy real estate valuation process that we go through. So, we really go through a 3 or 4-step process to ultimately settle on what we’re going to pay. And what we typically see is around July, what’s called the ARB process happens, and we usually settle in on a little higher valuation, and then we continue to protest those, and we continue to litigate those. And ultimately, I think we feel confident that those will come down. We do pass through most of those costs to our tenants, but we work very hard to keep those low because it’s a burden on the tenants. And some of those can take 2 to 3 years to get through the full litigation process. So, I think it’s just a normal increase that you’d see in the third quarter, particularly in Texas.

Craig Kucera: Okay. That’s helpful. Just circling back to your commentary, Dave, on the acquisitions and dispositions. I think earlier this year, you were talking about maybe $40 million for the year. Has that number changed at all? Or is that still sort of the expectation of having $40 million of acquisitions and maybe $40 million on the disposition side?

David Holeman: Craig, yes, I don’t — I think we — like I said, in Page 10 of our deck, we’ve laid out, we’ve done 2 acquisitions this year. And as I said, I have a couple more. So, I would say probably we’re going to be a little higher than those numbers on the acquisition and disposition side. So not significantly different. If you look back so far, we’ve done basically $150 million over the last 2.5, 3 years. I think that run rate is consistent with where we are today. But we are seeing some nice opportunities. I’m very pleased with the acquisition of San Clemente in Austin earlier this year, which is across from our Davenport property and provides us some really nice synergies between those 2 properties. We acquired Hulen in Fort Worth market earlier this year.

I think a great acquisition for us and excited about a couple more that we should announce shortly. But no huge change here, just continuing to make sure we’re working the portfolio. We’re taking the steps we need to do to achieve our 5% to 7% long-term FFO growth. And so probably just a little bit more than the $40 million, but kind of a consistent pattern with what we’ve done over the last 3 years.

Craig Kucera: Got it. And kind of changing gears here in the fourth quarter, I think you’ve got about 4% of your ABR expiring. Is that really just because you have a concentration of month-to-month leases or anything other going on there?

David Holeman: Well, I think if you’re looking at the number of leases, mostly just on the lease count, most of that is in our — what we call the CUBEXEC product, which is a very small percentage of the portfolio, but it’s a shared office space concept. And so it’s a high number of leases that just tend to be either month-to-month or very short terms, and that’s normal. I think if we looked at just what we’d consider to be in our wheelhouse of leases, the number is closer to 50 to 75 that are expiring in the fourth quarter, something like that, probably closer to 50%. So I think it’s mainly just CUBEXEC leases expiring.

J. Scott Hogan: It’s actually very consistent with what we’ve always had. I mean if you look back to last fourth quarter, I think we’re a little smaller. So super pleased with the opportunity to continue to have roll. One of the things that I think is a benefit for Whitestone is in this environment, we’re rolling a greater percent of our leases than some of our peers. So obviously, with the positive marks we’re having, we’re pleased with that. But consistent with what we’ve had is about 20% of our leases rolling. If you look at the 4% of revenue, that translates very closely.

David Holeman: I think on a square footage and ABR basis, it’s actually lower than we were in this position last year, Craig. So…

Craig Kucera: Okay. That’s helpful. One more, just on Slide 10 on the investor presentation, appreciate the color, first of all, that’s helpful. But just looking at it optically, it looks like you’re acquiring properties with higher rents at higher cap rates and selling assets with lower rents and lower cap rates. So obviously, you’re getting that positive cap rate arbitrage, which you’ve reported over the past few years. Is that just you executing your strategy? Or is that a focus more on more small shop space where you can charge higher rents? I just would be interested in your color on how you’re doing that.

J. Scott Hogan: I think it’s largely our strategy and as I think if you look at the fundamental aspect of what we do, it’s capital allocation. So just continuing to look at our portfolio. We do believe that right now, it’s the right time to continue to upgrade a number of things, upgrading the tenant base, upgrading the properties to higher income levels to potentially higher ABRs. So, it is a focused strategy to ultimately buy properties that we think have greater growth going forward. And we’re doing that probably in a little better areas and upgrading the portfolio. You’ve seen us move the ABR, you’ve seen us move kind of our consolidated TAP score. And then most importantly, if you look at the chart on 10, not only are we buying these properties at good rates, but Christine and her team are doing a fabulous job of stepping in day 1, looking at the merchandising mix, looking at ways we can drive NOI.

So, we’re buying it at more attractive cap rates, and then we’re making very quick return increases as we move forward.

Operator: We’ll go next to Bill Chen with [ Rhizome Partners ].

Unknown Analyst: I was wondering if you have a update on Pillarstone in terms of timing and then if the dollar figures are still in that same range of, I believe, $50 to $70 that you have previously guided?

David Holeman: Hey, Bill, Dave Holeman. Thanks for your question. I think I said earlier, and I’ll remind folks, we’re going to file our 10-Q very shortly, and there is a very detailed explanation in the 10-Q that goes through all the activities that have happened on Pillarstone. But just briefly, during the quarter, we received $13.6 million that was a payment of part of our proceeds due from Pillarstone. We have — there has been a settlement reached with the court, the plan agent that would result in about another $40 million coming to Whitestone. That settlement needs to be approved by the court. There will be a hearing to do so in November. And then if all of that’s approved is expected the distribution of approximately $40 million would be made in mid-December.

There are — obviously, there are — we expect that to happen, but there are a number of steps to get there. So that’s the update. We’re very close to receiving what we believe is kind of the end of the joint venture, $13.6 million received in the quarter. And right now, we estimate another $40 million to come in, in December.

Unknown Analyst: Got you. I appreciate that. And does your leverage ratios factor into those payments that you previously just — that you mentioned on the call earlier today?

J. Scott Hogan: Right now, the guidance for the fourth quarter does not include the impact of any gains or losses or the Pillarstone proceeds. So $40 million – if the $40 million Dave mentioned would probably be right around a half turn.

Unknown Analyst: Okay. I appreciate that. And one last question, if I may. On the pass site developments, is the strategy going forward to hold them or to kind of sell them for the gain and redeploy the capital?

David Holeman: Great question. I think that’s an individual-by-individual pass site kind of that we go through. Obviously, we do think there’s value in having an aggregation of the properties that all go together. But as you can see from what we’ve done in the last couple of years, we selectively sold a couple of pad sites that we thought the value was very attractive. So as we do these pad sites, one of the things we look at is structuring them in a way with a lease that is attractive to a buyer. And then so keeping that opportunity open to us. But it’s really — it’s an individual kind of decision we go through. We look at the pad site. We look at where it is in the center. We look at potentially the pricing in the market. So, we’re looking at a number of ways to do things that add value to shareholders.

Operator: Moving on to John Massocca with B. Riley Securities.

John Massocca: Apology, if I missed it earlier in the call. I know it’s not really how you tend to think about the portfolio. But as we think about 4Q rents and maybe even beyond that, I mean, do you have a signed not open pipeline or a pipeline of things that are on, call it, a free rent period that could be kicking in here in the next 3 to 6 months? And if so, kind of what’s the broad parameters of how big that number is?

David Holeman: Yes. So, hey, John, Dave. So, as I mentioned earlier, we report occupancy as commenced occupancy. So the tenants have taken possession of the space. Some of our peers report, I think, a leased occupancy and then a signed not open. One of the fundamental aspects of our business model is smaller tenants, shorter leases, much more quick and nimble. So, we just don’t have a substantial amount of leases that aren’t commenced because we move quickly, we get those tenants in very quickly. So, I also think when people report signed not open, they’re not reporting potential tenants that move out. So there’s — that signed not open gap always sits there. But Whitestone is at a solid 94%, over 94% fourth quarter moving forward. And we sign leases and we get them commenced very quickly. I think I answered your question, maybe…

J. Scott Hogan: John, just the 3.5% to 4.5% same-store guidance that we’ve given for the year includes any kind of free rent or anything of that nature in it as well.

John Massocca: So, I guess maybe just as we think about 4Q, which is historically a big leasing quarter, I mean, is that stuff that’s in negotiation today? Or is that things that have been negotiated in 3Q, 2Q that are essentially just formalities to close in the quarter?

David Holeman: It’s both, John. I mean, leasing, there’s complicated leases can take 6 months to negotiate to put in place and some are different. I mean it’s across the board. So — but traditionally, we’ve always tried to take back some space at the beginning of the year and which always kind of dips our occupancy a bit. And in that, we’re moving towards either leasing activity well into the second and third that delivers on the fourth. And then sometimes the fourth, for whatever reason, people wanting to start their businesses up at the beginning of the year, just seems to always been a very productive quarter for us in the beginning — and I think, again, you kind of see the trend has been the same in the last couple of years. We just expect it to keep being that way.

J. Scott Hogan: Yes. And I think obviously, we’re not just saying because it’s been that way. We’ve got great visibility into the leases. We — Christine and her team, every week, we look at the activity, we look at leases in place. So we feel good about where we are on the leasing side. And at this point in the year, there’s substantial activity, we believe, to finish out in Q4.

David Holeman: Yes. I haven’t seen a downtick in leasing activity this year. Surprisingly, I thought there’d be a little bit of pullback, and it really has not been.

John Massocca: Okay. And then on the kind of redevelopment or center enhancement CapEx you’re putting in, is all of the kind of tailwind to same-store NOI or NOI you’re expecting to see from that kind of hit in 2026? Or is there projects in place that are really more of a 2027 impact? And I guess, how big could that be compared to what you’re going to complete this year or early next and therefore, have it be impacting the ’26 numbers?

David Holeman: It’s — boy, we’ve been stacking this evenly across the board over the number of the years just because the timing of lease rolls when we’re able to put production into place. But I think we may see some of our larger projects come online on ’27, but ’26 is going to be similar to this past year as far as what we’re able to achieve as far as putting pads into production, et cetera. And the same thing, we have a couple of projects that we expect to see an uplift from, I think as we talked about, Lion Square, Terravita, a number of these that they take about 6 months to 9 months to put in production and then you see the results the following year. So we continue — that is part of the value add of our business that we find to be as far as whenever we purchase an asset, we look at doing that.

Garden Oaks will probably be the next one to start up. And that’s just how we do business, and that’s how we’re able to keep increasing and improving the value of the portfolio, the quality of the revenue and deliver to the bottom line.

John Massocca: Okay. And then maybe kind of on a very short-term basis, as I think about the acquisitions and dispositions that are in the pipeline for the remainder of the year, should we expect kind of cap rates to roughly be aligned with what you’ve done historically on kind of both ends of those transactions?

David Holeman: The general answer is yes. Nothing — no substantial changes. I mean, we’re working a program. The specific cap rates may be slightly different. But generally, we’re seeing cap rates consistent with what we show on Slide 10 as far as the acquisition side. Most importantly to us is, obviously, the day 1 cap rate is important, but we’re equally focused on the day 300 cap rate. What can we do, how can we move the rents. So it should be no substantial change in doing similar to what we’ve been doing. I think I said in my remarks, what we plan to do is execute and deliver, share with investors where we think we can add value and then do that. So you should see that on the acquisition disposition side throughout the rest of the year.

Operator: This now concludes our question-and-answer session. I would like to turn the floor back to Dave Holeman for closing comments.

David Holeman: Thank you. Thanks to everyone for joining our call. We’re very pleased with the progress we’re making. I think we’ve laid down another solid quarter and are excited about finishing out the year with a very strong year. I would love to interact with anyone that was going to be at REIT World in Dallas in December. We’re going to be having a property tour and then obviously meeting one-on-one with investors. So if you’d like to do that, reach out to us. And thanks again for joining, and have a great day.

Operator: Ladies and gentlemen, thank you for your participation. This does conclude today’s teleconference. You may disconnect your lines, and have a wonderful day.