Whitestone REIT (NYSE:WSR) (“Whitestone” or the “Company”) today
announced that leading independent proxy advisory firm Glass Lewis
has recommended that shareholders vote FOR ALL of Whitestone's
board nominees on the WHITE proxy card at its 2024 Annual Meeting
of Shareholders ("Annual Meeting") scheduled to be held on May 14,
2024.
In arriving at their recommendation, Glass Lewis stated that
“the board's case proves more persuasive at this time, due
in no small part to observable trends in Whitestone's operating
performance, financial condition and corporate governance which
suggest the Company is credibly executing on its promulgated tack
following the ouster of former CEO James Mastandrea.”
Furthermore, Glass Lewis recognized our transparency with
shareholders by writing that “Whitestone has responded to
speculative transaction commentary by expressing a willingness to
consider available alternatives” and acknowledged our
significant corporate governance improvements by adding that
“the Company has, across the last five years, replaced
two-thirds of the sitting board and reshaped the executive
team.”
With respect to Erez Asset Management (“Erez” or the
“Dissident”), Glass Lewis wrote that “the Dissident’s
governance case is largely a miss for a variety of
reasons” and added that the “Dissident appears
more interested in engaging with a broader analytical framework
predating significant changes to management and the
board.” In evaluating Erez’s nominees, Glass Lewis
concluded that “other than highlighting the professional
background of nominees Bruce Schanzer and Catherine Clark, we
identify no specific or general plans or strategies Mr. Schanzer or
Ms. Clark would pursue, if elected.”
Glass Lewis ultimately questions the motivations of Erez,
stating that “Erez’s sole substantive plan submitted to the
board was for an “orderly and well-managed corporate unwind
scenario” underpinned by a process “similar” to what Mr. Schanzer
pursued at Cedar Realty. We see no indication Erez pitched
alternate strategic of financial avenues for the
Company,” while concluding that “Whitestone
has generally offered suitably reasoned and adequately transparent
rebuttals to substantially all of Erez’s claims.”
Furthermore, in reviewing Bruce Schanzer’s track record at
Cedar, Glass Lewis highlighted the historical disconnect between
pay and performance, and further added that their historical “F”
grades on Cedar “raise additional doubt as
to Mr. Schanzer's willingness to acknowledge and timely respond to
investor feedback, while also materially undermining the notion
that Mr. Schanzer is likely to represent a credible change
agent.”
Separately, ISS also acknowledged that Whitestone is “in
the midst of a turnaround, with promising results since Holeman
took over as CEO,” further noting that “The
Company’s outperformance against its peers and the broader market
since the appointment of a new CEO indicates the market’s positive
view on Holeman’s execution since January 2022.”
ISS also put the spotlight on Erez and its nominees’ fixation
with a sale process by stating that “The board's concern
that the dissident is primarily focused on a potential sale
transaction may have a reasonable basis, given the context of
Schanzer's initial approach and his apparent pursuit of financing
sources and outreach to the company’s former CEO.”
Commenting on the Glass Lewis recommendation, the
Whitestone Board of Trustees issued the following
statement:
- The recommendation from Glass Lewis
to support all of Whitestone’s Board nominees is a validation of
the ongoing successful turnaround strategy executed by our new
management team and overseen by our existing Board since we reset
the Company on January 18, 2022.
- Whitestone’s turnaround and
outperformance since 2022 – independently corroborated by both
Glass Lewis and ISS – validate the Board’s decisive action to
terminate the former CEO for cause and comprehensively refresh the
Board and management team, which was a process led by Mr. David
Taylor and Ms. Nandita Berry as change agents and newly appointed
leaders of the Board in 2022.
- We believe our reset strategy has
momentum and can capture upside potential at Whitestone. We also
believe that replacing Mr. David Taylor and Ms. Nandita Berry with
the proposed candidates from the Dissident would disrupt our
strategy, interrupt the Company’s momentum, and ultimately destroy
shareholder value. The Dissident’s fixation with a sale process
given prevailing adverse market conditions speaks volumes about
their strategic misjudgment.
- We at Whitestone are our own change
agents. We carefully evaluate all opportunities to maximize
shareholder value against our going-concern business plan. We are
not opposed to selling the Company or exploring strategic
alternatives if they lead to maximizing shareholder value. But we
also do not want to shortchange shareholders by running a hasty
sale process at the wrong time, as the Dissident seems to be
recommending.
We urge shareholders to protect the value
of their investment and NOT to vote for ANY Erez nominees, but to
follow the Glass Lewis’ recommendation by voting for all the
Company’s board nominees using the WHITE
proxy card today.
Whitestone reminds shareholders that every vote is important, no
matter how many or few shares it represents. Shareholders are urged
to discard any BLUE proxy materials they may have received and only
vote using the WHITE proxy card.
Whitestone shareholders who have any questions or require any
assistance with voting may contact our proxy solicitation firm,
Mackenzie Partners, toll-free at (800)-322-2885.
Whitestone’s definitive proxy materials and other materials
regarding the Board’s recommendation for the 2024 Annual Meeting
can be found at:
https://ir.whitestonereit.com/financial-reporting/documents/default.aspx
Investor and Media Contact:
David MordyDirector, Investor RelationsWhitestone REIT(713)
435-2219ir@whitestonereit.com
About Whitestone REIT
Whitestone REIT (NYSE: WSR) is a community-centered real estate
investment trust (REIT) that acquires, owns, operates, and develops
open-air, retail centers located in some of the fastest growing
markets in the country: Phoenix, Austin, Dallas-Fort Worth, Houston
and San Antonio.
Our centers are convenience focused: merchandised with a mix of
service-oriented tenants providing food (restaurants and grocers),
self-care (health and fitness), services (financial and logistics),
education and entertainment to the surrounding communities. The
Company believes its strong community connections and deep tenant
relationships are key to the success of its current centers and its
acquisition strategy. For additional information, please visit
www.whitestonereit.com.
Important Additional Information and Where to Find
It
Whitestone REIT has filed a definitive proxy statement on
Schedule 14A (the “2024 Proxy Statement”) and a WHITE proxy card
with the U.S. Securities and Exchange Commission (the “SEC”) in
connection with the solicitation of proxies for its 2024 Annual
Meeting of Shareholders (the “2024 Annual Meeting”). SHAREHOLDERS
ARE STRONGLY ENCOURAGED TO READ THE 2024 PROXY STATEMENT (INCLUDING
ANY AMENDMENTS OR SUPPLEMENTS THERETO), THE WHITE PROXY CARD, AND
ANY OTHER DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Shareholders may
obtain a free copy of the 2024 Proxy Statement, any amendments or
supplements to the 2024 Proxy Statement and other documents that
the Company files with the SEC from the SEC’s website at
www.sec.gov or the Company’s website at
https://ir.whitestonereit.com/corporate-profile/default.aspx as
soon as reasonably practicable after such materials are
electronically filed with, or furnished to, the SEC.
Certain Information Regarding Participants in
Solicitation
Whitestone REIT, its trustees and certain of its executive
officers may be deemed to be participants in the solicitation of
proxies from Company shareholders in connection with the matters to
be considered at the 2024 Annual Meeting Information regarding the
direct and indirect interests, by security holdings or otherwise,
of the persons who may, under the rules of the SEC, be considered
participants in the solicitation of shareholders in connection with
the 2024 Annual Meeting is included in the 2024 Proxy Statement of
the, which was filed with the SEC on April 4, 2024. To the extent
securities holdings by the Company’s trustees and executive
officers as reported in the 2024 Proxy Statement have changed, such
changes have been or will be reflected on Statements of Change in
Ownership on Forms 3, 4 or 5 filed with the SEC, which can also be
found through the Company’s website
(https://ir.whitestonereit.com/corporate-profile/default.aspx) in
the section “Investor Relations” or through the SEC’s website.
These documents are available free of charge as described
above.
Forward-Looking Statements
This Report contains forward-looking statements within the
meaning of the federal securities laws, including discussion and
analysis of our financial condition and results of operations,
statements related to our expectations regarding the performance of
our business, and other matters. These forward-looking statements
are not historical facts but are the intent, belief or current
expectations of our management based on its knowledge and
understanding of our business and industry. Forward-looking
statements are typically identified by the use of terms such as
“may,” “will,” “should,” “potential,” “predicts,” “anticipates,”
“expects,” “intends,” “plans,” “believes,” “seeks,” “estimates” or
the negative of such terms and variations of these words and
similar expressions, although not all forward-looking statements
include these words. These statements are not guarantees of future
performance and are subject to risks, uncertainties and other
factors, some of which are beyond our control, are difficult to
predict and could cause actual results to differ materially from
those expressed or forecasted in the forward-looking
statements.
Factors that could cause actual results to differ materially
from any forward-looking statements made in this Report include:
the imposition of federal income taxes if we fail to qualify as a
real estate investment trust (“REIT”) in any taxable year or forego
an opportunity to ensure REIT status; uncertainties related to the
national economy, the real estate industry in general and in our
specific markets; legislative or regulatory changes, including
changes to laws governing REITs; adverse economic or real estate
developments or conditions in Texas or Arizona, Houston and Phoenix
in particular, including the potential impact of public health
emergencies, such as COVID-19, on our tenants’ ability to pay their
rent, which could result in bad debt allowances or straight-line
rent reserve adjustments; increases in interest rates, including as
a result of inflation operating costs or general and
administrative expenses; our current geographic concentration in
the Houston and Phoenix metropolitan area makes us susceptible to
local economic downturns and natural disasters, such as floods and
hurricanes, which may increase as a result of climate change,
increasing focus by stakeholders on environmental, social, and
governance matters, financial institution
disruption; availability and terms of capital and financing,
both to fund our operations and to refinance our indebtedness as it
matures; decreases in rental rates or increases in vacancy rates;
harm to our reputation, ability to do business and results of
operations as a result of improper conduct by our employees, agents
or business partners; litigation risks; lease-up risks, including
leasing risks arising from exclusivity and consent provisions in
leases with significant tenants; our inability to renew tenant
leases or obtain new tenant leases upon the expiration of existing
leases; risks related to generative artificial intelligence tools
and language models, along with the potential interpretations and
conclusions they might make regarding our business and prospects,
particularly concerning the spread of misinformation; our inability
to generate sufficient cash flows due to market conditions,
competition, uninsured losses, changes in tax or other applicable
laws; geopolitical conflicts, such as the ongoing conflict between
Russia and Ukraine, the conflict in the Gaza Strip and unrest in
the Middle East; the need to fund tenant improvements or other
capital expenditures out of operating cash flow; the extent to
which our estimates regarding Pillarstone REIT Operating
Partnership LP's financial condition and results of operations
differ from actual results; and the risk that we are unable to
raise capital for working capital, acquisitions or other uses on
attractive terms or at all and other factors detailed in the
Company's most recent Annual Report on Form 10-K, Quarterly Reports
on Form 10-Q and other documents the Company files with the
Securities and Exchange Commission from time to time.
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