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CFO Lewis Parrish estimated that 60-65% of participation rents would be recognized in the current year, with the remainder next year, noting the final amount depends on harvest results. Both Parrish and CEO David Gladstone clarified that leases must be renegotiated and do not automatically revert to fixed-rent structures. Regarding the Series D redemption, Parrish outlined several options, including using proceeds from property sales, drawing on the line of credit, or allowing the rate to float up from 5% to 8%. EVP Bill Reiman added that while wine grape markets have been low, they are showing positive signals, and the key nut crops (almonds, pistachios) are seeing positive momentum.

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Lewis Parrish (executive) explained that the projected revenue decline increased to $17 million because one additional farm was converted to a direct-operated model and another lease incentive was granted. He clarified they expect to recover this amount, plus a small profit, through crop share proceeds, with 60-70% recognized in Q4 2025 and the remainder in H2 2026. Parrish also noted the $2.4 million termination fee was a one-time event related to three almond farms that are now vacant.

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CFO Lewis Parrish clarified that the rent reduction is an annualized comparison of 2025 versus 2024, not a sequential quarterly change. He confirmed the company expects to recover the majority of this amount, and potentially more, in the second half of 2025. For 2026, Parrish stated the hope is to revert to traditional leases, but this will be market-dependent. He also noted that proceeds from the Florida farm sale are currently held as cash on the balance sheet.

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Lewis Parrish, an executive, stated that 17 leases, representing about 20% of revenue, are set to expire in 2025. He estimated that approximately 60% of these are for annual row crops and 40% are for permanent crops. Regarding the Q3 amendments, Parrish explained they were for various reasons, including extending some near-term expirations that were originally due in 2024 and even some as far out as 2028.

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President and CEO Samuel Landy affirmed confidence in achieving the low end of the existing guidance, stating it would be premature to change it given strong potential catalysts, such as improved home financing from HUD. EVP and COO Brett Taft added that new home prices are stable and demand remains robust, with a significant number of new rental homes filled year-to-date.

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President and CEO Samuel Landy and EVP and COO Brett Taft confirmed the 5% rent growth target is on track, noting strong demand and no issues with notices sent year-to-date. Regarding tariffs, Mr. Taft mentioned that while home prices are up 3-5%, the larger concern is potential supply chain disruption. EVP and CFO Anna Chew estimated that rates for the 10-year loan refinancing would likely be in the 5.5% to 5.75% range, based on the 10-year treasury.

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EVP & COO Brett Taft detailed the acquisitions, noting two are stabilized New Jersey properties and two are in Maryland, with one offering a significant value-add opportunity through occupancy growth. EVP & CFO Anna Chew stated that refinancing rates are expected to be in the 5.5% to 5.75% range and that the Q4 G&A increase was due to accrued performance-based bonuses, which she suggested is a reasonable run-rate for the upcoming year. President & CEO Samuel Landy added that property appraisals from refinancings consistently validate their investment strategy, showing significant value appreciation over time.

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President and CEO Samuel Landy and EVP and COO Brett Taft clarified that while 800 homes were ordered for 2024, the net increase is lower due to sales of older homes. Brett Taft detailed that 443 new homes were converted to rentals year-to-date, and they expect to reach 600-650 for the full year, providing a strong inventory base to achieve the 800-home goal in 2025. Samuel Landy confirmed that almost all self-storage units are open to the public, with a minor exception of about 50 units in Vineland, NJ.

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President Buzz Cooper detailed an active acquisition pipeline with six letters of intent (LOIs) outstanding and a potential $50 million transaction expected soon. He explained the industrial property sale was the result of a tenant exercising a purchase option within their lease. Regarding the incentive fee, Cooper stated it is a quarterly discussion with management to ensure alignment with shareholder interests and to support employee retention.

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CFO Gary Gerson stated that the company's goal is to continue deleveraging from 44.1% into the 'low 40s' by reducing secured debt and increasing unsecured debt, while lowering overall debt. President Arthur 'Buzz' Cooper added that they are 'very hopeful' of reaching the 70% industrial concentration target in 2025 through a combination of acquisitions and dispositions.

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CFO Gary Gerson disclosed that the settlement revenue totaled $2 million. He also projected that one property sale would close by the end of the year, with the other two likely closing by mid-2025. President Arthur Cooper added that the acquisition market is seeing increased activity, which is expected to pick up further in Q1 2025, and despite competition, the company is seeing its fair share of actionable deals.

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EVP & COO Dennis Craven clarified that one hotel for sale is an older, lower RevPAR asset, while the other is an opportunistic disposition to reduce future capital needs. He projected a 21-24 month timeline for the Portland development. Chairman, President & CEO Jeffrey Fisher added that due to a wide bid-ask spread in the acquisitions market, the company will likely increase its share buyback activity.

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Executive Jeffrey Fisher explained that both share buybacks and acquisitions are viewed opportunistically. He noted that while attractive acquisition yields over 9% are difficult to find, the company's manager, Island Hospitality, provides a unique underwriting advantage. In the absence of accretive deals, the company will repurchase shares due to a perceived dislocation in its stock price. Regarding the Portland development, Fisher confirmed it's still an option but is proceeding cautiously due to extended entitlement processes and cost uncertainty. Executive Dennis Craven and Jeffrey Fisher attributed the Phoenix hotel's success to its ramp-up period, its status as a new product in a market with older inventory, and a strong operating team driving corporate business and market share gains during the peak season.

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Executive Jeffrey Fisher explained that the acquisition market for high-quality assets remains thin with a significant bid-ask spread, but he is confident in finding replacement assets for the five sold hotels within the year. Regarding the Portland development, Fisher noted they are targeting a 150-200 basis point premium over typical acquisition cap rates and that the project is grandfathered in despite a city-wide hotel moratorium. Executive Dennis Craven added that the existing Portland Hampton Inn has historically been one of the company's highest-yielding assets.

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CEO Mark Decker estimated a potential disposition target of $50 million to $100 million, noting that proceeds would likely fund a mix of debt repayment and new investments. CIO Alfonzo Leon stated that the portfolio mix, which is primarily focused on Medical Office Buildings but opportunistic in other areas like inpatient facilities, is expected to remain consistent as the team continues to seek the best value in the market.

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Chief Financial Officer Bob Kiernan stated that they are not looking to increase leverage significantly beyond its current level, noting it will approach 47% after the Q2 acquisitions close. He reiterated the long-term target of 40-45%. Chief Investment Officer Alfonzo Leon described the acquisition market as having increased volume and a wide cap rate spread. He noted a good supply of assets in their target high 7% cap rate range, but emphasized that pursuing them is contingent on the company's cost of capital.

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CFO Bob Kiernan confirmed that the full ABR from Prospect, representing 0.8% of total ABR, is currently included in the 2025 guidance. He acknowledged that GMRE actively manages its portfolio and maintains a watch list but stated there are no other material tenants of concern to flag at this time. Mr. Kiernan also verified the 2025 CapEx forecast is $12 million to $14 million and does not include leasing commissions, which are expected to be significantly lower in 2025, around $1 million to $2 million.

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CIO Alfonzo Leon attributed the high 9% cap rate to a combination of factors. He explained that the on-campus properties were less attractive to short-term funds focused on flipping assets, which commanded an extra yield premium. He also emphasized that it was a relationship-driven deal with long-standing connections, which contributed to the favorable pricing.

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CEO Dave Holeman stated that the acquisitions in Austin and Fort Worth are in high-quality submarkets with strong growth trajectories, offering opportunities to apply Whitestone's model of upgrading the tenant mix and driving rents. He highlighted synergies with an existing property in Austin. Holeman also clarified that while they have identified properties for sale, the process is fluid and based on achieving appropriate value in current market conditions, not strictly contingent on acquisition timing.

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CFO J. Scott Hogan explained the occupancy dip was intentional, stemming from a re-tenanting effort at the Terravita center to bring in higher-quality tenants. CEO David Holeman clarified the $50 million acquisition figure is an estimate of expected activity for the year, consistent with prior years and funded by cash flow and dispositions. Hogan attributed the higher leverage to Q1 seasonality, noting Q4 typically has higher NOI, and reiterated the year-end target is in the low 6x range. Holeman added that year-over-year leverage has improved significantly.

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CEO David Holeman explained that asset recycling is an ongoing part of their investment strategy to optimize shareholder value, not a one-time program to shed non-core assets, though future volumes might be lower. Regarding guidance, Holeman and CFO J. Scott Hogan attributed the range primarily to the timing of leasing activity and new lease commencements, noting that while Q4 growth will be strong, it compares against a very strong Q4 in the prior year.

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President & CEO John Albright explained that the Fidelity property was designed for such a division, and Fidelity will make a payment for the downsizing. The new lease with the State of New Mexico enhances the asset's value for a potential sale. He also noted that while an acquisition might temporarily increase leverage, planned asset recycling would neutralize the effect over time. CFO Philip Mays confirmed that no dispositions are currently included in the 2025 guidance.

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Executive John Albright estimated the mark-to-market rent upside at Ashley Park to be at least 10-20% but highlighted that the primary focus is on leasing up vacancy and selling outparcels. Executive Philip Mays clarified that very little of the $9 million to $12 million in re-leasing CapEx has been spent to date, as funds are typically reimbursed to tenants after their work is complete.

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Executive Philip Mays confirmed the company has elected to settle the convertible notes in cash, which will initially be funded by the line of credit before being termed out. Executive John Albright stated that the current investment pipeline is primarily core acquisitions, though structured investment opportunities may arise later in the year. Philip Mays added that while same-property NOI will fluctuate quarterly, the annual figure is more indicative, with performance expected to be generally even before picking up in the fourth quarter.

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Executive John Albright indicated that future dispositions would focus on smaller, non-core assets to improve scale, such as the Daytona properties or a mixed-use property in Winter Park. He mentioned they are waiting for stronger market pricing for some assets and would only sell a strategic property if pricing becomes very attractive and it lacks significant growth potential, but noted nothing is on the immediate horizon.

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President & COO Andrew Witt described the preferred equity investment as a 14% rate instrument across six Phoenix properties. CFO Frank Saracino explained that the Santa Clara asset's carrying value decreased from its watchlist value because the specific CECL reserve held against the loan was charged off upon its conversion to REO.

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CEO Mike Mazzei confirmed that issuing a CLO in the fourth quarter of 2025 remains the goal, as it is a key part of the strategy to re-lever the portfolio and increase earnings. CFO Frank Saracino provided the earnings from cash flow figure for the quarter, stating it was $0.11 per share.

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CEO Mike Mazzei clarified that while the company has enough capital to originate well over $1 billion in gross volume, the strategic necessity is to grow the loan book by a net $1 billion. Achieving this net growth would increase the total portfolio to approximately $3.5 billion, which is the level required to sustainably cover the current dividend. He reiterated that he expects origination activity to accelerate in the second half of the year.

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John Albright, President & CEO, reiterated the barbell strategy of seeking both investment-grade and higher-yielding assets, while managing leverage through asset sales. Philip Mays, SVP, CFO & Treasurer, added that the target for Walgreens exposure is to get it below 5% of ABR from its current level of about 6.7%.

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Philip Mays, an executive, explained the impairment charge was related to properties expected to be sold in the near term, such as Walgreens, to align their book basis with anticipated sale prices. Regarding loan funding, he stated it should be consistent through the first half of the year, and while a large loan matures in Q3, new fundings are expected to maintain a similar overall funding level.

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Philip Mays, CFO, stated that of the four maturing loans, one is expected to pay off mid-year while three will likely extend, and the company is confident it can replace the paid-off loan. John Albright, CEO, added that the current investment pipeline is the strongest it has been in five years for this time of year, with significant activity expected toward the end of the first quarter.

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CEO Lance Parker responded that while more acquisition opportunities are appearing, any deals closed in 2025 are unlikely to have a material earnings impact. Regarding leasing spreads, he explained that the quarter lacked any significant outlier leases that had boosted spreads in prior periods, but he remained pleased with the overall leasing volume and strong ABR.

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Lance Parker, an executive, described the self-storage deal as a strategic 75-year ground lease that converts non-income-producing land into recurring FFO, contributing about $0.01 in 2025. He confirmed an opportunity to invest for a ~20% equity stake in the development. Parker stated that while construction costs are impacted by tariffs, real-time tenant metrics like foot traffic and sales remain positive with no signs of softness. He clarified the build-to-suit delay was a timeline adjustment after breaking ground, not due to tariffs.

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CEO Lance Parker expressed optimism for external growth in 2025, noting the company is actively underwriting opportunities and has included $0.01 of FFO from unspecified growth initiatives in its guidance. He highlighted internal growth prospects at Maui Business Park, including potential build-to-suits and speculative development. SVP of Asset Management Kit Millan added that a significant anticipated industrial move-out did not occur and noted only one minor tenant bankruptcy. Lance Parker also pointed out that the 2025 lease expiration roll is low at just over 8% of ABR.

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SVP of Asset Management Kit Millan explained that the high leasing spread was primarily driven by a single anchor renewal at Queens' Marketplace, and underlying spreads were consistent with recent trends. CEO Lance Parker detailed the three upcoming Q4 vacancies: a full floor at Kaka'ako Commerce Center (industrial), a smaller industrial space in Kapolei, and an office space in Kahului, Maui. Parker noted that while these vacancies are expected to carry into 2025, the company is already in discussions with potential backfill tenants for the industrial assets.

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