Whitestone REIT Increases Credit Facility to Strengthen Growth
Whitestone REIT Expands Its Financial Capacity
Whitestone REIT (NYSE: WSR) has recently made headlines with a significant announcement regarding its financial strategies. In an effort to bolster its growth and operational flexibility, the Company has amended and expanded its credit facility, now totaling $750 million. This facility includes a $375 million revolving credit line and a $375 million term loan.
Details of the Credit Facility
The new credit facility positions Whitestone REIT with an increased revolving credit line maturing in September 2029, complete with two options to extend the maturity. The term loan is scheduled to mature in January 2031. Under this financial arrangement, the initial interest rate on the revolver is set at SOFR plus 1.40%, while the term loan is pegged at SOFR plus 1.35%. Notably, Whitestone has entered into interest rate swaps to secure the rates on the term loan, effectively locking in rates between 3.36% and 3.42% until maturity.
Strategic Goals Achieved
This strategic renewal of the credit facility serves several significant objectives for the Company:
- It strengthens Whitestone’s potential to achieve a Core FFO (Funds from Operations) per share growth target of 5 to 7% over the next few years.
- The renewal extends the average maturity of its debt obligations to 2030, alleviating the pressure of upcoming maturities.
- It substantially reduces variable debt to about 12%, enhancing financial stability.
- The move opens up additional borrowing potential for the Company.
- The enlargement of the bank group supporting Whitestone signifies increased trust from financial institutions.
Leadership Comments
Dave Holeman, the CEO of Whitestone REIT, expressed enthusiasm about the newly structured facility. He noted, “This agreement not only comes with a $215 million increase in size but also features lower interest rates and extended maturities. We are thrilled to bring three strong new banks into our financing family.” These improvements underscore the solidified strength of the Company’s operational performance and financial position, enhancing both liquidity and flexibility in the capital markets.
Operational Improvements
Since the last extension in 2022, Whitestone REIT has successfully enhanced its leverage metrics and driven growth in its EBITDAre (Earnings Before Interest, Taxes, Depreciation, Amortization, and Real Estate). The Company has been proactive in achieving top-tier Same Store Net Operating Income growth while maintaining discipline in capital expenditures.
About Whitestone REIT
Whitestone REIT is a community-oriented real estate investment trust, focusing on the acquisition, ownership, operation, and development of open-air retail centers. The Company has established its presence in some of the fastest growing markets, promoting services to foster community engagement. Whitestone's centers cater to essential services including dining, fitness, and entertainment, creating a vital hub for locals.
Frequently Asked Questions
What was the amount of the new credit facility established by Whitestone REIT?
The Company expanded its credit facility to a total of $750 million, consisting of both a revolving credit line and a term loan.
What are the maturity dates for the credit facility?
The revolving credit line is set to mature in September 2029, while the term loan is scheduled to mature in January 2031.
How does this credit facility benefit Whitestone REIT?
This credit facility strengthens the Company's financial position, reduces interest costs, extends maturity dates, and provides increased liquidity for future investments.
What are the interest rates associated with the credit facility?
The initial interest rate for the revolver is SOFR plus 1.40%, and for the term loan, it’s SOFR plus 1.35%.
Who is leading the financial arrangements for this facility?
Key arrangers for this facility include prominent institutions such as BMO Capital Markets, Bank of America, Capital One, and U.S. Bank, among others.
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