HOUSTON, May 04, 2018 (GLOBE NEWSWIRE) -- Whitestone REIT (NYSE:WSR) (“Whitestone” or the “Company”) announced today that it is mailing a letter to shareholders in connection with Whitestone’s upcoming 2018 Annual Meeting of Shareholders to be held on May 17, 2018. The definitive proxy statement and other important information related to the annual meeting can be found on Whitestone’s website at www.whitestonereit.com.

As noted in the letter to shareholders, Maxim Group and JMP Research, equity analysts who follow Whitestone closely, have recently stated favorable views regarding the re-election of Whitestone’s incumbent nominees.

Whitestone’s Board of Trustees unanimously recommends that shareholders vote “FOR” Whitestone’s trustees listed on the WHITEproxy card: James C. Mastandrea, Jack L. Mahaffey and Nandita V. Berry.

The full text of the letter follows:

May 5, 2018

Dear Fellow Shareholder,

Whitestone’s 2018 Annual Meeting of Shareholders is approaching quickly, and your vote is critical to the future of the Company, no matter how many shares you own. Despite our successful track record of delivering value, including a consistent monthly dividend, a Whitestone shareholder, KBS Strategic Opportunity REIT (“KBS”), is seeking to replace two of Whitestone’s highly qualified and experienced trustees with less qualified individuals who appear to bring no additive value to the Board and are deeply intertwined with KBS.

You are about to make a decision between two clearly different paths:

1. Whitestone’s Path: A “forward-thinking” strategy and operating model that capitalizes on the disruption in the retail industry by focusing on consumer needs for local necessities and services. Our business model has resulted in shareholder returns that are among the best in the publicly-traded retail REIT industry, guided by an independent, experienced and well-qualified Board and management team that is committed to enhancing shareholder value; or
2. KBS’s Path: No communicated strategy or any compelling ideas. They propose adding individuals who have no additive retail experience, no connectivity in Whitestone’s markets and represent one shareholder, KBS, not all shareholders.

Because KBS’s nominees are deeply entangled in KBS’s web of externally managed, non-traded REITs – which have misaligned high external management fee structures, poor performance, and a history of related-party transactions – we are concerned that, if elected, they may seek to steer Whitestone in a different direction, changing the Company’s strategy, culture and philosophy in ways that may not be in the best interests of all shareholders.

Whitestone’s Board, on the other hand, is aligned with shareholder interests, and management’s execution of the business strategy has been very successful. Voting for the re-election of Nandita Berry, Jack Mahaffey and Jim MastandreaTODAY will enable us to again be entirely focused on implementing our strategic plan by putting the KBS distraction behind us.

Do not be misled by KBS. Your Board and management team have significantly changed the Company’s executive compensation program and cost structure following engagement with and feedback from shareholders. Importantly, this engagement has been ongoing since well before KBS initiated its costly, disruptive proxy fight.

We ask that you take a moment to protect the value of your investment in Whitestone by voting “FOR” the re-election of ALLof Whitestone’s highly qualified trustees on the WHITE proxy card today. When you vote for Whitestone Nominees, you are voting for a track record of success, and a future path to enhanced value for ALL shareholders.

DON’T JUST TAKE OUR WORD FOR IT: WHITESTONE HAS RECEIVED SUPPORT FROM THIRD-PARTY EQUITY ANALYSTS

Independent research analysts have said¹:

• “We favor WSR's Director nominees, because: (1) we agree with WSR's e-commerce-resistant strategy; (2) KBS does not criticize that strategy (and is "not seeking control or change in management"); (3) nonetheless, we believe that electing KBS' nominees could be a large and material distraction to WSR's execution of its strategy; and (4) in addition, we believe that the crux of KBS's proxy fight is G&A costs in general and management compensation in particular, and that, recent changes and new long-term goals of WSR have already addressed the issues in the proxy fight, so that electing KBS' nominees would only likely serve to create disruption.”
  – Maxim Group, April 30, 2018

• “In our view, electing the WSR nominees is a win/win for WSR shareholders: (1) no disruption to the execution of WSR's strategy; and (2) lower G&A costs/management compensation.”
  – Maxim Group, April 30, 2018

• “We are somewhat unsure what this investor brings to the table, as KBS has a mixed track record as a nontraded REIT asset manager, appears to have limited holdings in the retail sector, and outside of executive compensation, no other aspects to the strategy appear under dispute.”
  – JMP Research, March 29, 2018

• “[W]e believe Whitestone has been rewarded by providing an alternative business model, focusing mostly on a smaller, entrepreneurial tenant base, offering services and internet-resistant businesses, versus more traditional anchor-based (big box or grocery) shopping center peers. This has resulted in significant outperformance relative to retail REITs over the one-, three, and five-year periods ending December 31, 2017.”
  – JMP Research, March 29, 2018

WHITESTONE’S HIGHLY QUALIFIED BOARD IS BEST SUITED
TO CONTINUE ADVANCING SHAREHOLDER INTERESTS

The Whitestone Board is composed of seven highly qualified trustees, six of whom are independent. Our trustees bring diverse skillsets that are highly valuable to the Company’s businesses, including management, financial and operational experience. Several are also well-versed in the REIT industry and possess retail expertise. Additionally, we have added new and diverse voices over the past year to our Board with our three new independent trustees.

Your trustees for re-election this year – Nandita Berry, Jack Mahaffey and Jim Mastandrea – bring invaluable perspectives to Whitestone’s robust Board.

Nandita Berry has deep relationships with state and government officials in Texas and backgrounds in the legal and economics fields, which complement the skillsets of Whitestone’s other trustees. Since recently joining the Whitestone Board, she has been laser-focused on capitalizing on strategic development and redevelopment opportunities that will drive significant growth and value creation.

Jack Mahaffey is the former Chairman of the Compensation Committee and current Chairman of the Nominating and Corporate Governance Committee. Under his tenure, the Board has adopted key executive compensation provisions to more closely align the interests of management with shareholders. In his role as Nominating and Corporate Governance Chair, Mr. Mahaffey ensures the Company’s present success translates into sustainable shareholder value creation. By promoting a Board culture that keeps open lines of communication with shareholders and takes their feedback into account, Jack has been key in helping guide Whitestone’s superior shareholder returns.

Jim Mastandrea is an industry veteran with 38 years of experience as a leader in real estate. As Chairman and Chief Executive Officer since 2006, he has been instrumental in the oversight and execution of Whitestone’s strategic initiatives, growth, and financial and operational performance. Under Jim’s leadership, Whitestone has implemented its successful e-commerce resistant business strategy. Jim’s industry expertise played a key role in crafting a business model that would position Whitestone for success despite the industry headwinds.

In contrast, neither of KBS’s nominees possesses retail real estate experience, is familiar with Whitestone’s target markets, or has ever operated or invested in retail real estate in Whitestone’s core markets in Texas and Arizona. We believe KBS’s boilerplate statements demonstrate that its nominees do not understand Whitestone and the sector in which we operate.

WHITESTONE IS GENERATING SIGNIFICANT SHAREHOLDER VALUE

Whitestone has made tremendous strides both financially and operationally. Whitestone has generated total shareholder returns (“TSR”) that are among the best in the publicly traded U.S. shopping center REIT sector. In 2017, we distributed more than $40 million in dividends and ranked #1 in TSR among the 17 U.S. Public Shopping Center REITs. Similarly, for the year ended December 2017, we achieved competitive TSR rankings of #2 of 16 over a three-year period, #5 of 15 over a five-year period, and #4 of 13 since our IPO, per S&P Global Market Intelligence².

Whitestone continues to execute a strategy to deliver stable and predictable monthly dividends. Since the Company’s IPO in August of 2010, Whitestone has paid a consistent dividend for 92 consecutive months. Further demonstrating our commitment to delivering significant shareholder value, Whitestone has steadily increased its dividends paid to shareholders and cash flow from operations during that time period. Based on our extensive knowledge and understanding of WSR’s business model and assets, unlike KBS, we are confident in our ability to sustain our dividend going forward.

A photo accompanying this announcement is available at http://resource.globenewswire.com/Resource/Download/fe1a7dda-fbbf-41aa-8e97-e067e4526ab6

We do not believe that KBS’s nominees would improve upon our outstanding track record of delivering superior value to our shareholders through dividends. Do not jeopardize that successful record! Vote the WHITE proxy card today for all of Whitestone’s trustees.

YOUR BOARD IS OPEN TO NEW, WELL-CONSIDERED IDEAS;
KBS, HOWEVER, HAS NOT PROVIDED ANY

The Whitestone Board and management team are receptive to ideas from shareholders that may help drive profitable growth and enhance value to ALL shareholders. Since KBS’s investment in Whitestone, we have sought to maintain an open dialogue and held discussions with representatives of KBS.

Notably, KBS has not offered any actionable ideas or given any compelling rationale to warrant the representation it is seeking on Whitestone’s Board.

PROTECT THE VALUE OF YOUR INVESTMENT AND DIVIDENDS;
VOTE THE WHITE PROXY CARD TODAY “FOR” ALL OF WHITESTONE’S TRUSTEES

We urge you to support your Board, which is working diligently on behalf of all shareholders to build on the Company’s track record of sustainable shareholder value creation. A vote on the WHITE proxy card is a vote to protect your investment, including your dividends.

Thank you for your continued support.

Sincerely,

James C. Mastandrea
Chairman and CEO

About Whitestone REIT

Whitestone is a community-centered retail REIT that acquires, owns, manages, develops and redevelops high quality "e-commerce resistant" neighborhood, community and lifestyle retail centers principally located in the largest, fastest-growing and most affluent markets in the Sunbelt. Whitestone’s optimal mix of national, regional and local tenants provide daily necessities, needed services and entertainment to the communities in which they are located. Whitestone's properties are primarily located in business-friendly Phoenix, Austin, Dallas-Fort Worth, Houston and San Antonio, which are among the fastest growing U.S. population centers with highly educated workforces, high household incomes and strong job growth. Visit www.whitestonereit.com for additional information.