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Operator: Greetings, and welcome to the Whitestone REIT’s Second Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, David Mordy, Director of Investor Relations. Thank you. You may begin.

David L. Mordy: Good morning, and thank you for joining Whitestone REIT’s Second Quarter 2025 Earnings Conference Call. Joining me on today’s call are Dave Holeman, Chief Executive Officer; Christine Mastandrea, President and Chief Operating Officer; and Scott Hogan, Chief Financial Officer. Please note that some statements made during this call are not historical and may be deemed forward-looking statements. Actual results may differ materially from those forward-looking statements due to a number of risks, uncertainties and other factors. Please refer to the company’s earnings news release and filings with the SEC, including Whitestone’s most recent Form 10-Q and 10-K for a detailed discussion of these factors. Acknowledging the fact that the call may be webcast for a period of time, it is also important to note that this call includes time-sensitive information that may be accurate only as of today’s date, July 31, 2025.

The company undertakes no obligation to update this information. Whitestone’s earnings news release and supplemental operating and financial data package have been filed with the SEC and are available on our website in the Investor Relations section. We published second quarter 2025 slides on our website yesterday afternoon, which highlight topics to be discussed today. I will now turn the call over to Dave Holeman, our Chief Executive Officer.

David K. Holeman: Thanks, David. Good morning, and thanks again for joining our call. We delivered another solid quarter, increasing core FFO per share by 5.4% year-over-year, growing our occupancy 100 basis points sequentially from Q1 and increasing our average base rent per leased square foot year-over-year by 5.3% to $25.28. We continue to see a very strong leasing environment in our high-growth Sunbelt markets, which is allowing us to grow the value of our centers by strengthening the tenant mix with the addition of new and exciting businesses that serve the surrounding communities. Whitestone’s strategically designed shorter lease terms are allowing us to capture the benefits of this strong environment faster than many peers with less lease roll.

Over the next few years, we expect to leverage our leadership position in the high-value shop space to deliver core FFO growth of 5% to 7%, underpinned by same-store NOI growth of 3% to 5%. We intend to grow our dividend in conjunction with our FFO growth and scale our operations, spreading our fixed costs and broadening our investor base. Let me highlight and provide a few details on 3 of our second quarter accomplishments. First, we grew occupancy 100 basis points sequentially from Q1 to 93.9% as we remerchandise, bringing in stronger tenants and setting up same-store NOI growth in the quarters ahead. At our Terravita Center in North Scottsdale, during the quarter, we added a very strong franchise Ace hardware and expect to add the best-in-class pickleball operator, the Picklr later this year.

These types of high-quality tenants enhance the vibrancy of the center and allow us to populate the center with fast-growing businesses that allow us to benefit from their growth through higher rents and expansion potential. Over the last couple of years, we have frequently highlighted our remerchandising efforts, and these efforts are coming to fruition and are providing a catalyst for future growth. Secondly, we had 2 strategic acquisitions in the quarter, San Clemente in Austin and South Hulen in Fort Worth. San Clemente has a very limited competitive retail around it, is anchored by a neighborhood with average incomes in excess of $280,000 and has over 55,000 vehicles per day passing at the intersection of Loop 360 and Westlake Drive. Across the street from our existing Davenport center, we anticipate strong growth ahead for both San Clemente and Davenport.

Our South Hulen acquisition expands our geographic reach further in Fort Worth. The center sits at the entrance to Hulen Mall, already the highest visited mall within 30 miles and is poised to do even better as the fast-growing surrounding neighborhood drives additional commercial development in the area. Both San Clemente and South Hulen fit very well within our overall strategy and match our acquisition criteria well. Our third growth driver is redevelopment. Our redevelopment continues at pace with Lion Square in Houston. We anticipate it will be complete by the end of the third quarter. This is an example where we’ve really been able to take advantage of a neighborhood’s rapid evolution, upgrading our product and ensuring we maximize growth.

Not only is the surrounding Asian community experiencing very strong growth, Park Eight Place, a $1 billion redevelopment is occurring down the road on the former Halliburton campus. This type of development is occurring all around our centers, and I’ll have Christine go into more detail there. We are on track for our previously communicated 2025 full year guidance and are reaffirming our core FFO per share, same-store NOI growth and year-end occupancy guidance ranges this morning. In terms of financial performance, we delivered core FFO per share of $0.26 for the quarter and $0.51 for the 6 months, up 5.4% for the quarter and 5.6% for the 6 months versus the prior year period. Same-store NOI growth of 2.5% for the quarter and 3.9% for the 6 months.

We remain squarely on target to hit our 3% to 4.5% same-store NOI growth target range for the year. Straight-line leasing spreads of 17.9%, our 13th consecutive quarter with leasing spreads in excess of 17%. Early on in my time as CEO, I also spelled out that our plan would be to review every property within Whitestone’s portfolio to ensure that the properties are in line with our strategy and are supported by the right neighborhood dynamics to drive growth and allow our leasing agents to do what they do best. We’ve done exactly what we said we would do, and I’ll point you to a summary of our transactions on Slide 10. Our review has resulted in our selling 12 properties and purchasing 6 properties in addition to some pads and other parcels we bought adjacent to our existing properties.

The net effect of all of this has been to strengthen our ability to grow and secure higher-ended properties that have greater growth potential and durability of cash flows. Since the fourth quarter of 2022, our acquisitions have totaled $153 million and our dispositions have totaled approximately $126 million. We anticipate the capital recycling program will continue with an estimated $40 million of acquisitions and $40 million of dispositions through the balance of the year. In conclusion of my prepared remarks, I’ll reiterate our belief that in today’s rapidly changing retail environment, a company with a well-aligned forward-thinking team and a well-located portfolio with a higher concentration of high-value shop space properly anchored to the community can outperform the herd.

We’re not only putting all the pieces in place to make that happen via top line growth, we’re actively managing our expenses as well, reducing our G&A and interest expense, both by about 6% from last year. All in all, we’re executing on our remerchandising, capital recycling, reducing our expenses, improving our balance sheet while growing earnings and our steadfast commitment to grow long-term value for shareholders. I look forward to continue to update investors in the months ahead, and I’ll now turn it over to Christine.

Christine C. J. Mastandrea: Good morning, everyone. As Dave said, we delivered another strong quarter, bringing the occupancy number back up with the Ace Hardware commencing at Terravita and with a strong momentum in the shop space leases. We signed $33.2 million of total lease value, picking up slightly from the first quarter and building towards the fourth quarter, which is typically our strongest quarter. Leasing spreads were 41.4% for new leases and 15.2% for renewals, giving us a combined leasing spreads of 17.9% for the quarter. Same-store NOI growth was 3.9% for 6 months, and we remain confident in hitting our 2025 guidance of 3% to 4.5% same-store NOI growth. Looking out a bit further, 2 significant new tenants, EoS at Windsor Park in San Antonio and Cactus Club Cafe at Boulevard Place in Houston are energizing their respective centers and will move out of their build-free rent period soon and contribute over 150 basis points to same-store NOI in 2026.

Our most recent acquisition, South Hulen, joins a growing list of Whitestone properties that have major development going on around them. We’ve had the opportunity to acquire very stable cash flows and future upside as a result of urban development. And so we took action and made the acquisition. Urban development is both a factor within our acquisition criteria framework and the natural progression that occurs because of our other criteria, strong university systems, high household incomes and upwardly mobile surrounding demographics. We spoke on the last 2 earnings calls about how Whitestone is designing to proactively identify change to take advantage of that change, delivering earnings as the company leverages change. Today, I would like to highlight some of the major changes going on around our portfolio that will provide the opportunity in years ahead.

Expanding further on South Hulen’s development, Fort Worth population grew 3.1% last year and has become the nation’s 11th largest city. It’s clear to us that Hulen Mall will undergo additional development, further elevating the traffic to the area, which is already robust with I-20 and Hulen Street attracting more than 180,000 vehicles per day. Our South Hulen Center is perfectly positioned as a gateway for the mall and for upcoming development. In terms of upcoming development, Garden Oaks purchased in 2024 is very similar. We anticipate a major announcement soon concerning the neighboring old Sears property. The property will be redeveloped in conjunction with the neighborhood that is experiencing very rapid growth as Houston Heights redevelopment spreads northward.

In other parts of the Houston Metro, we’ve got pockets of development as well. Near our Lake Woodlands Center, The Cynthia Mitchell Woods Pavilion has taken over as the top spot globally for outdoor amphitheaters with over 600,000 guests in attendance in 2024 alone. In response to the area’s growth, Howard Hughes is building The Ritz-Carlton Residences, a short walk from Lake Woodlands Center and projected to be completed by the beginning of 2027. We’ve anticipated this development when we purchased the property in late 2022, and we’re already benefiting from our ongoing remerchandising efforts. Near our Boulevard Center, Post Oak Central is being revitalized, transforming a 16-acre campus into a mixed-use environment of retail, restaurant and office spaces.

Midway is the lead developer on the project and groundbreaking recently occurred and completion is expected late next year. In addition, the adjacent parcel to our Boulevard Center was recently purchased by Crescent Real Estate, the Doggett families and also the Schnitzer families. They are developing a 6-acre parcel to create a mixed-use development with 1.5 million square feet of additional space. We anticipate that this project is moving very quickly, and we welcome them as a neighbor. Given that our Boulevard property is very strong interest right now, and it sits at the main artery in the uptown area of San Felipe 610 and Post Oak Boulevard. We have the opportunity not only to protect our asset but further upgrade our tenant base and move Whitestone’s developable land at the property into an income-producing column.

One last Houston highlight that David touched upon was Park Eight Place is a $1 billion mixed-use development occurring less than a mile from Lion Square in the former Halliburton campus with over 70 acres designed around walkability, health and sustainability and convenience. This development is supercharging an already fast-growing Asian community. The second largest concentration of Asian Americans in the United States are in Houston, Texas. In Phoenix, near our Anthem Center, TSMC is investing $165 billion, including 6 fabs, 2 advanced packaging centers and an R&D center. The project is expected to produce 6,000 direct manufacturing jobs and over 20,000 construction jobs. Anthem is Whitestone’s closest center to TSMC’s investment, but we anticipate the benefits will be felt throughout the greater metro area, which represents approximately 40% of Whitestone’s portfolio.

In Dallas, explosive growth is occurring around our El Dorado center and plans to build and expand on the McKinney Airport have recently been announced, adding 47,000 square foot [ terminal ], which is intended to handle 1 million passengers annually within 5 years. This expansion is a result of numerous corporate headquarters located in McKinney and will likely add to the attractiveness of the area for more major corporations. Construction that has already begun on the new airport is expected to open late next year. In Austin, we announced the purchase of San Clemente, really a sister center that sits across the road from our Davenport Center. Both of our properties will benefit from the recent improvements to the Loop 360, which would increase the traffic above the current 80,000 vehicles per day, our centers currently enjoy.

In addition, the Four Seasons is adding nearly 200 high-end residences to the area. This is another opportunistic acquisition that fit our criteria as well. With all of these developments, our leasing agents are constantly working to ensure our tenant mix is properly connected to the community, and we’ll see the benefits in the same-store net operating income growth as we evolve the tenant mix. In some cases, we’ll benefit without investment to a center. Lake Woodlands would be an example of a center that’s prime benefit from change without redevelopment. In other cases, Lion Square being a primary example, we can make a modest redevelopment in investment and capture significant gains upgrading a center to match the neighborhood. And finally, we’ve got a few centers like Boliver Place and Dana Park.

We have land for development where we expect to capture additional growth and quite possibly partnering with another firm to develop mixed-use assets at the center. In total, we have at least 5 to 7 years’ worth of development and redevelopment in order to supplement our growth. In terms of guidance, we have up to 1% of redevelopment growth embedded in our longer-term same-store growth target, and we’ll add development growth once we have greater visibility into timing on larger development projects in the area. I’ll close by thanking the different teams at Whitestone for their ability to work together in a seamless fashion. Calling out one group I’m very pleased with is the tight integration between our acquisitions and leasing teams, allowing us to move quickly on acquisitions and integrate into our operations.

That same closeness runs between leasing, property management, legal, finance really throughout the entire company. We’re a team-based company, and it has proved in the efforts and where we’ve exceeded these past years. This may be because of our smaller size, but overall, we appreciate that we’ve got these great teams, all working hard towards the same objectives. And with that, I’ll turn it over to Scott to cover the financials.

J. Scott Hogan: Thank you, Christine. This morning, we reiterated our 2025 $1.03 to $1.07 core FFO per share guidance and our longer-term 3% to 5% (sic) [ 4.5% ] same-store NOI growth target. We have also reiterated our forecast for year-end occupancy in the 94% to 95% range. We have strong momentum going into the second half, which is where we typically fill spaces we’ve taken back at the beginning of the year. Another measure of health of the business, our bad debt for the quarter ran just under 1% of revenues, nearly identical to this time last year and within our forecasted range. Last 12-month pro forma debt-to-EBITDAre was 7.2x, an improvement from 7.8x for the same period a year ago. This is up slightly from last quarter with the acquisition of San Clemente and Hulen in the second quarter.

We anticipate property acquisitions and property sales to be roughly balanced through the end of the year, and we expect year-end last 12- month pro forma EBITDAre to be about 7x. We’re in the process of recasting our credit facility and bank demand seems to be very strong. Our goals are to further ladder our debt, expand our bank group and deepen the relationships with our existing banks. However, versus 2022 when we last recasted our credit facility, Whitestone is a very different company. Debt-to-EBITDAre is down over a full turn, driven primarily by EBITDAre growing 13.9% since Q2 of 2022. We’ve proven the value of high-return shop space and strengthened both our tenant base and the quality of our centers. We’ve been disciplined with our capital, delivered top quartile same-store NOI growth, broadened our investor base and positioned the company for continued strong growth.

I anticipate I’ll be able to provide a more detailed update on the credit facility recast on the next earnings call. In terms of Whitestone’s liquidity, we had $5.3 million in cash and $69 million available under the credit facility at the end of the quarter. Our dividend remains very well supported at approximately 50% of our FFO, and we expect to grow the dividend level in conjunction with earnings growth. We are focused on continuing to execute our plan and in turn, financial results. And with that, we will open the line for questions.

Operator: [Operator Instructions] The first question is from Mitch Germain from Citizens Capital Markets.

Mitchell Bradley Germain: It seems like the next couple of quarters, this one as well, the next 2 have some pretty tough same-store comps. So I’m curious what gives you the confidence that you can continue to meet your forecast in the back part of the year?

David K. Holeman: Mitch, it’s Dave. Thanks for the question. I’ll give a high level and then maybe let Scott or Christine add more details if they’d like. Obviously, we do a very detailed forecasting. We look ahead at our tenants. We look at those tenants that come in. You saw this quarter that we brought up our occupancy 100 basis points from Q1. Those kind of activities obviously will contribute to future same- store NOI growth. So as we look at the projections of the activity we’ve done, we do anticipate stronger same-store NOI growth in the upcoming quarters versus Q2. For the 6 months, I think we’re right just a little under 4%, which is within our guidance range.

J. Scott Hogan: And Mitch, this is Scott. I’ll just add to that, there are a number of large tenants that are already under contract that are in their free rent periods. So their rents are not reflected in the same-store numbers that you saw in the second quarter, but we — a lot of that is just free rent coming into effect or going out in Q3 and Q4.

Mitchell Bradley Germain: Got you. And do you get any benefit from Picklr in the second part of the year? Or are they a back-end weighted commencement?

David K. Holeman: So we anticipate they’re going to commence in the back half of the year. There will be some early concession period. So it will be [ amenable ] to same-store NOI, I think, this year from Picklr. But obviously, as we project out to future quarters, a number of these activities are going to significantly increase the momentum we’ve got in that category.

Mitchell Bradley Germain: Great. And then, Dave, you mentioned $40 million of acquisitions and dispositions. The fact you gave that number and seem to be pretty certain about it leads me to believe that some of this activity is already in process. Anything that you want to share with regards to what’s happening there?

David K. Holeman: Sure. I mean I think we’ve been very clear on our objectives of looking at our portfolio, continuing to evaluate every property, looking for those that we feel like we’ve tapped out the value, looking for opportunities in neighborhoods where we find assets. So we do have a number of activities going on. We are seeing a little bit more product coming to market. So one of the things we’re seeing is a little bit more product than we’ve seen. But we do have, obviously, a number of activities. I did comment that we expect to be about $40 million, and we feel pretty good about that number. So that does tell you that we’re moving along in that process. But recycling is just something we should be doing. It’s just like any portfolio where you’re continuing to look at your holdings and make sure you’re allocating capital in the best way.

So we’re roughly balanced. I think we talked about $150 million or so sales and — I’m sorry, $150 million or so acquisitions and $125 million or so of dispositions. So just for the balance of the year, you’ll see us continue to do what we’ve done for the last couple of years, which is upgrade this portfolio, continue to add value through getting better properties in the mix.

Mitchell Bradley Germain: Great. Last one for me. It looks like interest expense forecast moved up slightly. And I know that you had baked in some potential savings from Pillarstone. That obviously seems to be a little bit on delay, which I’m not surprised about. Is there anything else that’s kind of motivating that change that I should be aware of?

J. Scott Hogan: Yes, sure. I don’t think we had any Pillarstone savings baked into the forecast. But really what’s driving that interest expense is just that in our recycling efforts, some of the acquisitions have come ahead of some of the dispositions. And so that $1 million increase you see in interest expense is going to be offset by increased non-same-store NOI, maybe even a little accretive on those efforts. So it’s really just capital that we had to put out there to purchase a few properties.

Mitchell Bradley Germain: So just the timing thing. And then, Scott, from that regard, are we still thinking kind of sub 7x debt to EBITDA by year-end?

J. Scott Hogan: On a last 12 months basis, I think we’ll be right around 7x. And if we’re just talking about the fourth quarter annualized, probably mid-6s is where we’re forecasting.

Operator: The next question is from Gaurav Mehta from Alliance Global Partners.

Gaurav Mehta: I wanted to ask you on the 2 acquisitions that you announced in second quarter. Can you provide some more color on the upside in those acquisitions as far as lease-up opportunity and maybe mark-to-market rent potential?

David K. Holeman: Sure. I’ll start out again and allow some of my teammates to chime in if they’d like. But I think fundamentally, Gaurav, the most important thing we looked at was the quality of the neighborhoods and locations and the trajectory. Both the Fort Worth acquisition and the Austin acquisitions are in really great submarkets. They’re in areas with strong household incomes, traffic growth and then neighborhoods that are continuing to get better. South Hulen in Fort Worth is adjacent to the Hulen Mall, which is a mall that’s going through redevelopment. There continues to be activity there. I think as we look at the opportunity, obviously, continuing to be able to improve rents is a part of that and continuing to look at the tenant mix and upgrade that in conjunction with what we see going around the area.

And in Austin, it’s a couple of things. We have a sister property right across Loop 360 that’s Davenport. So we’re going to get some good synergies by those 2 properties being very close to each other. And another one, it’s one of the best areas in Austin with very little retail around. And so we’ll be — you’ve got a really strong restaurant there that it’s a local draw. And so we’ll be able to do a number of things from the tenant mix and drive rents. So I think the opportunity for us on both of these is kind of our bread and butter. It is buying properties in areas that are — have an upward trajectory where the center is trailing a bit, and we could come in and apply our model and really continue to move the tenant base and move the rents.

Gaurav Mehta: Okay. Second question on the recycling on the $40 million of assets that you talked about that could be sold. Have you guys already shortlisted the properties that you plan to sell? And would you still consider selling if you don’t find the right acquisition opportunities this year?

David K. Holeman: Sure. We are evaluating our properties on a regular basis, right? It’s what we do. We look at cash flow models. We understand the surrounding area. We look at the tenant mix, and we look at what’s going on in the market. So none of this is ever set in stone. When we identify a property that we think it makes sense to divest and move on, it’s obviously based on a value that we think is appropriate for receiving for that property. So we annually do — we annually, quarterly, monthly do a review of our holdings, and we — there’s fluidity in that based on market conditions. But we do see good conditions right now. As I mentioned, we’re seeing a little bit more product on the acquisition side, and we continue to see interest in some of the assets we’ve been selling, which are a little different quality than the ones we’re buying, but local buyers and other buyers seem to have a pretty strong interest in those.

Operator: The next question is from Barry Oxford from Colliers.

Barry Paul Oxford: Just building on the acquisitions, what have you seen as far as from a pricing standpoint or cap rate, let’s just say, from January 1 to now? And then on a market basis, are you seeing any of your markets on a pricing basis be more favorable on a risk-adjusted basis? Or are you guys just more on an asset-by-asset type of mindset?

David K. Holeman: I’ll comment on the cap rates. I’ll let Christine maybe give some thoughts on the markets. But from a cap rate basis, I do think we’ve seen some leveling of the cap rates, less volatility there. If you look at Slide 10 of our investor presentation, we’ve given the kind of the going-in cap rates on the centers we bought. Most recent acquisitions were in the 6.4% to 6.7% range, going in. So I think that’s kind of consistent with what we’re seeing. And then we’ve also provided on that slide some current history on some of the other acquisitions. So we look to add probably at least a couple of hundred basis points of yield to our initial going-in yield. So I think from a cap rate perspective, we’ve seen a lot of stability of that over the last several months and quarters and appears to be settling in for the type of product we’re looking at.

J. Scott Hogan: And I think what we’re also starting to see is just with the shifting market trends with the growth that we’re starting to — we’re anticipating every time we buy a center, what’s the timing of the remerchandising effort? Or is it something that we see as a potential redevelopment? And most of the time, the remerchandising that we look at really starts occurring within 18 months of when we buy an asset. And then along with that, something that might see as something like Garden Oaks, for example, which we bought at a fairly good price, but was waiting for an adjacent property to be developed before we’d start doing the redevelopment with it. So we kept the in-place cash flow, which is fairly strong. And then we’ll start moving into redevelopment probably in another year to probably around in a year.

So this is based again on what we see as the market conditions, as I just spoke about today. It’s our locations have really, really strong infrastructure development, densification coming in, and it’s been rather impressive and much of that has to do with the communities that we choose for growth.

Operator: The next question is from John Massocca from B. Riley Securities.

John James Massocca: Maybe thinking about the same-store growth guidance. How much of that right now is subject to leasing activity? Is it going on now or is it going to be going on the remainder of 3Q and 4Q? And how much of that growth is really locked in based on things you have signed that are going through free rent period? I know you mentioned a little bit in kind of Mitch’s question, but is there any kind of — I mean is that kind of set in stone at this point, just given the free rent period that tends to exist for bigger tenants?

J. Scott Hogan: I think what we have in our forecast right now, John, is just normal leasing activity. And so there’s nothing extraordinary happening in the third and fourth quarters that those same-store forecasts are based on. So without getting into a lot of detail, I think it’s just our regular lease expirations and just normal leasing activity. I don’t know if that helps at all.

John James Massocca: That makes sense. I’m just kind of thinking like is the activity you’re going to be engaging on the leasing front, the remainder of this quarter and into 4Q, really going to be more of a ’26 event and it’s stuff you did in 1Q, 2Q, maybe even last year that’s going to be driving the remainder of kind of the same-store growth? I’m just kind of thinking is there any — if something happens on a macro front, whatever it may be, I mean, how much of that is kind of variable in that guidance today?

J. Scott Hogan: We have a couple of large spaces that we’re leasing that will run into 2026 that are — but they’re built into the forecast that way. And then we just have routine leasing that’s going on. I don’t know if Dave or Christine would add anything, but I think it’s just — there is a mix in there, but it’s a normal mix.

David K. Holeman: Yes. I think, John, as you said, at a macro level, the same-store NOI trails the leasing activity. And so I think we’re very bullish on balance of the year same-store NOI as we look to ’26, what we’ve been doing in our portfolio and the quality of tenants we’ve been bringing in and the remerchandising efforts. So I think we’ve given the guidance for ’25. We’re bullish about where we’re headed, and we do think that you’re on and that there is a bit of a trail on the same-store NOI to your leasing activity.

John James Massocca: And then what are you kind of seeing in terms of trends on leasing spreads starting from a very high base, obviously, in 3Q of last year, but things have kind of trended down. I understand 2H is your stronger leasing season. So just kind of is it maybe — once again, I understand you’re starting from a high base. Is there kind of a seasonal trough in kind of 1Q, 2Q and a bounce back in 2H? Or is some of the tightening maybe a little bit of a normalization of things in the macro environment, the leasing environment, et cetera?

J. Scott Hogan: Well, if I look at the leasing spreads, the new leasing spreads were just north of 40%. And that’s — there weren’t a ton of leases in there, but it’s based on some very strong restaurant activity that we had. So second-generation restaurant spaces that we’re filling are coming in at much higher rents than they were. And the renewal leasing spreads were down just a little bit, but they were — they’re on a lower TI and leasing commission amount than we’ve seen in prior quarters. So I think if you were to net the leasing spreads against the TI and leasing commissions that they’re going to come in pretty close to the same amount.

John James Massocca: Okay. I appreciate that color. And then last one for me. On a short-term basis, kind of where are you comfortable taking leverage if for whatever reason, maybe the acquisition environment is more attractive than dispositions? Or there is something that is kind of lined up there timing-wise?

David K. Holeman: I think we’ve — yes, I’ll start. We’ve committed to continuing to improve our balance sheet as we grow. So I think that’s our commitment. I think Scott talked about where we expect debt-to-EBITDAre to be year-end. If you look back, the progress we’ve made over the last couple of years is very significant. So I just think for us, it’s continuing to execute to grow this platform, to strengthen the balance sheet, to strengthen our investor base. So what we’re comfortable on taking leverage to, I think we’re comfortable on doing the things we said we’re going to do, which is we’re going to grow earnings and we’re going to strengthen our balance sheet in conjunction. You can do both things.

John James Massocca: Okay. I’d imagine the answer is no. But essentially, some of this acquisition activity you’re seeing is attractive. It’s not contingent on you closing disposition activity first.

David K. Holeman: No, I don’t think so. I mean we have — we do have different sources of capital. We have a credit facility. So we have largely been capital neutral on our recycling, and we’re going to continue to do that. We said that was the activity for the balance of the year. So we’re thinking ahead. We’re looking at acquisitions. We obviously have the capital sources that allow us to act more quickly than many other buyers. And so I think I answered your question in a roundabout way there.

Operator: There are no further questions at this time. I would like to turn the floor back over to Dave Holeman, Chief Executive Officer, for closing comments.

David K. Holeman: Thanks to all for joining our call. We appreciate your interest in Whitestone. We appreciate giving you an update and look forward to finishing the year and look forward to further communications. If there’s anything we can do, any questions anyone has, please feel free to reach out to us. Thanks, and have a great day.

Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.