Whitestone REIT, through its operating partnership, Whitestone REIT Operating Partnership, has amended, expanded and extended its $750 million credit facility, comprised of a $375 million revolver and $375 million term loan. The revolver is scheduled to mature in September 2029 with two six-month options to extend the maturity date and the term loan is scheduled to mature in January 2031.
The revolver has an initial interest rate of SOFR plus 1.40% and the term loan has an initial interest rate of SOFR plus 1.35%. In addition, the company entered into interest rate swaps to fix the interest rates on the $375 million term loan, locking in a rate between 3.36% and 3.42% (plus 1.35%) until maturity.
The renewal of the credit facility accomplishes several key objectives:
- Locks down a key earnings variable, strengthening Whitestone’s ability to hit its 5% – 7% Core FFO per share growth target in 2026, 2027 and 2028
- Extends Whitestone’s weighted average maturity date out to 2030 with no maturities due in 2026
- Reduces Whitestone’s current variable debt to approximately 12%
- Provides additional borrowing capacity
- Expands the company’s bank group
“We are very pleased with the new facility, which includes a $215 million increase in size, lower interest rates, extended maturities and the addition of 3 strong new banks. Among the positive changes from the previous agreement was a lowering of the interest rate and an improvement in the capitalization rate used for valuation from 7% to 6.75%. These, and other improvements reflect the continued strengthening of our operations and financial position, and will provide additional liquidity and financial flexibility,” Dave Holeman, CEO Whitestone, said. “Since our last extension in 2022, we have improved our leverage metrics by driving EBITDAre up, delivering top quartile same store net operating income growth and focusing on disciplined, effective capital spending. This agreement builds on the progress we’ve made over the last 3 years and lays the groundwork for additional consistent growth.”
The co-lead arrangers and joint-book runners for the facility were BMO Capital Markets, BofA Securities, Capital One, Citizens Bank, KeyBanc Capital Markets, Truist Securities, and U.S. Bank.
