Good day, and welcome to the Whitestone REIT Fourth Quarter 2013 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Suzy Taylor, Director of Investor Relations. Ma'am, you may begin.

Thank you, Jamie. Good morning, and thank all of you for joining Whitestone REIT's Fourth Quarter 2013 Earnings Conference Call. Joining me on today's call will be Jim Mastandrea, our Chairman and Chief Executive Officer; and Dave Holeman, our Chief Financial Officer. Please note that some statements made during the call are not historical and may be deemed forward-looking statements. Actual results may differ materially from those indicated by the forward-looking statements due to a variety of risks and uncertainties. Please refer to the company's filings with the Securities and Exchange Commission, including the company's Form 10-K and Form 10-Q for a detailed discussion of these risks. Acknowledging the fact that this call may be webcast for a period of time, it's also important to note that today's call includes time-sensitive information that may be accurate only as of today's date, February 27, 2014. Whitestone's earnings press release and fourth quarter supplemental operating and financial data package have been filed with the SEC, and the Form 10-K will be filed shortly. All are or will be available on our website, whitestonereit.com, in the Investor Relations section. Also included in the supplemental data package are the reconciliations from GAAP financial measures. And with that, let me pass the call to Jim Mastandrea.

Thank you, Suzy, and thank you all for joining us on our call today. Today, we're going to review our fourth quarter and full year results, and update you on the recent progress of our initiatives. Dave's portion of our call will focus on our financial results, strong positive trends in Whitestone's operating results, financial position and our financial guidance for 2014. We remain focused on increasing long-term shareholder value by share -- per share. We do this by extracting the intrinsic value from the assets that we own by leasing, redeveloping and selectively developing adjacent land parcels while helping our tenants grow their businesses, by acquiring accretive assets in high-growth target markets, by leveraging our infrastructure over a larger base of assets and finally, by lowering our overall cost of capital. Now let me review some the progress we've made and highlight our accomplishments. Whitestone wrapped up 2013 with an excellent fourth quarter, resulting in another year of significant growth and progress towards our financial and operational objectives. In the fourth quarter, we grew our asset base with value-add acquisitions. We increased our occupancy through the addition of high-quality tenants, we lowered our overall cost of capital and strengthened our capital base through debt refinancing, and we produced both strong top line and bottom line cash flow results. I'd like to briefly touch on each of these. Growing our asset base in the fourth quarter with over $60 million in acquisitions at 2 value-add Community Centers in Phoenix, and 1 fully developed land parcel, adjacent to a current property owned in the high growth area of the Woodland submarket in Houston. We increased our total occupancy to 86.8%, up 2% from a year ago through the addition of high-quality tenants. Our overall occupancy was a result of same-store growth…

Thank you, Jim. I will start by reviewing our balance sheet or financial position, then turn to a review of our key operating results and conclude with the discussion of our initial 2014 financial guidance. Throughout my comments, I will discuss both our fourth quarter results and our annual results. During the fourth quarter and throughout 2013, we strengthened our financial position through acquisitions of high-quality Community Centers in the Phoenix and Dallas markets through long term, fixed-rate debt financing at attractive rates, through movement toward a more unsecured debt structure, through strengthened relationships with capital sources and through improved overall financial operating results and metrics. In the fourth quarter, we added over $60 million in high-quality Community Centers to our portfolio of properties, bringing us to $131 million in acquisitions for the full year. $131 million in acquisitions represents a 21% increase in our acquisition volume over 2012. As of year end, we have 54 Community Centers and 6 future development land parcels with a cost basis of $546 million. We now have 5 million square feet of gross leasable area, including nearly 2 million we have added in the Phoenix market over the last 3 years. Throughout 2013, we have capitalized on the favorable interest rate environment and further strengthened our balance sheet by refinancing $106 million of our property level debt, with $60 million refinanced in the fourth quarter. The weighted average fixed interest rate of our fourth quarter refinancings was 4.1%, with a weighted term of 7.6 years. The weighted fixed interest rate of all of our 2013 refinancings was 4.2%, with a weighted term of 8.1 years. In 2013, we also continued to move toward a more unsecured balance sheet with secured debt as a percentage of the cost basis of our real estate, decreasing…

Great. Thank you, Dave. I'd like to conclude by highlighting significant strengths of Whitestone. Our operating cash flow is strong and continues to grow on a per share basis. Our capital improvements are progressing, and we're meeting funding requirements relating to the value-add portion through debt refinancings at our corporate credit facility and from the increase in the value of our properties. Our properties have significant upside with an overall cost basis on 5 million square feet of space, of slightly over $100 per square foot, which we refer to as the intrinsic value which is being extracted as we redevelop, reposition, lease and move in new tenants. And last, we believe shareholders who invest in a value-add business, like ours, should be rewarded while they are waiting for the inherent intrinsic value to be harvested, which our stable dividend policy continues to support. With that, I'd like to thank you all for your time. And operator, I'd like to turn it over for questions.

[Operator Instructions] And we'll take our first question from Jonathan Pong with Robert W. Baird. Jonathan Pong - Robert W. Baird & Co. Incorporated, Research Division: It looks like you've got a pretty solid mark-to-market opportunity with 23% of your rent turning over in '14. What are you guys baking into guidance for your blended leasing spreads next year? And then maybe on a quarter-to-date basis, can you talk a little bit about what you're seeing out there? Do you expect to see continued positive cash spreads like you saw in Q4?

Jonathan, thanks for your question. As far as the role of our square footage, I think it's consistently in that range that we have roll in next year. As you know, we tend to have shorter leases, 3 to 5 years, and with that, have roll and opportunity to increase rental rates. I think you saw in the fourth quarter, we had nice positive results in our leasing spreads. It's probably prudent to look over a little more time than just 1 quarter. But for the year, we've had a positive spread of 2.2%. Built into the same-store growth next year is approximately 3% leasing spreads and then to approximately 2% lease up.

Jon, let me add to that. Cash is generated from our leasing and filling our properties. And when we started with value-add properties, we're acquiring these, they initially have significant more vacancy than stabilized properties. So our business model works through that by filling the property first. And then as the demand for the property continues to grow because we're filling the space and the supply shrinks, then we're able to keep short term leases and then roll the rents higher as we roll over the tenant. So that's been very effective for us. And that's beginning to start to show some traction now. Jonathan Pong - Robert W. Baird & Co. Incorporated, Research Division: Great. And then maybe on the $15 million of the midpoint development guidance that you're putting out for 2014, is that more of redevelopment geared? Or is that going to be more of a ground-up on an empty pad-site type of development?

Yes. As we've been purchasing properties, what we look for is a segment of each property we've acquired, where there's some potential to add square footage. So what we're looking at is those pads. For example, we call the Pinnacle pad we have, which is adjacent to a center that we have on the corner of Scottsdale Road and Pinnacle Peak, we'll be developing and adding about 35,000 or 40,000 square feet there ground up. And then, we have several other pads like that. So what we see in that redevelopment is really to enhance the properties we already own. In some cases, we're looking at properties with -- just the use is no longer income driven and we may look at replacing a property or two in our Houston portfolio, where we have a totally different use closer to the Community Center model, there might be some development there. Jonathan Pong - Robert W. Baird & Co. Incorporated, Research Division: Great. And last question, just on the G&A side, also for guidance. What's driving the $0.04 to $0.05 impact on core G&A for 2014? It looks like most of the head count you had or you have today was already in place a year ago, so I just wanted to see if there's anything, maybe more onetime in nature.

No, it's just -- it's a little bit of -- as we've grown a little bit, there's a little higher legal and public company cost. Our headcount has remained fairly flat. But just a slight increase in heads as we grow, obviously, in scale of our operations. So nothing significant in there, other than just little bit of growth as we get bigger, but obviously, continuing to reduce that as a percent of revenue.

We'll take the next question from Mitch Germain with JMP Securities.

Jim, do you still see the same level of distressed sort of investment activities out there? Or is that really kind of minimized at this point?

They're harder to find, but we are seeing them. And what's interesting, Mitch, we're finding deals that -- where they were renegotiated 5 years ago with the lenders, and they were sort of extend-and-pretend type deals with lenders, and what's happened is the developers because -- the developers didn't really have quite the incentives or still weren't able to turn around the properties. So we're seeing some of those that are coming to us right now. For example, one of our most recent acquisitions in December was a 5-year restructure plan that was in its -- it's almost in its fourth year. And for lack of brevity, we could call that a prepackaged short sale made 5 years ago. So we're starting to see some deals like that. And what's interesting is because of our -- the credibility and reputation we have within the industry, both in Houston and Phoenix, we're having deals come to us where people don't want to publicize that they have a distressed situation, so that we can take and then roll it in -- roll it out then into our portfolio. And we have -- we have right now at this time we have a couple of letters of intent out on properties just like that.

And when you look at your deal pipeline, is it still mostly Phoenix or are you kind of shifting now your growth away back into markets like Dallas and Houston?

We've been -- we've spent some time in San Antonio, we've spent some time in Dallas and we've spent a lot more time in Houston. And I'd say, we're spending some time in Phoenix, properties that come to us. We're not out scouting as much as we were scouting before. So we're starting to look at -- we think that we want to grow the base of assets that we have in Phoenix. And we've got a great staff here to really operate -- I mean, we've got actually a terrific staff here. And as you've seen from our results, we think it's now time to fill in some of the Texas market. Both states are excellent to add new acquisitions in.

Great. And I think I might have missed your -- Jonathan's question about your lease expiration schedule. Seems like average size is about 2-point -- 2.5 -- sorry 2,500 square feet, sorry. It seems like that's kind of in your forte of small tenants. Is there anything lumpy in there? And are there any no move outs that we should know about?

No. I think if you look at the roll, as I said, it's typical next year to what we tend to see. We like with the ability to manage those tenants. No, no known lumpiness in our move outs, just the normal roll in of our small tenants, which we've been very successful in renewing and being able to increase rates as well.

[Operator Instructions] And we'll take our next question from Carol Kemple with Hilliard Lyons.

On your acquisition pipeline, can you quantify the amount, I know you've done that quarters the past.

We have, any time -- we've always managed to maintain about $0.5 billion worth of deals in and out of that pipeline. And -- so we still stay within that range. One LOI that we just submitted was in the, I want to say, in the mid-70 range. And we're just waiting to see if that's something we want to negotiate, to put it together into a contract. So it doesn't take a lot of deals to add up to that. But we're probably in that $0.5 billion range to $600,000 range.

Okay. And then on your guidance from your adjustment from FFO to FFO-Core, it's about $0.21. What is that made up of? I figure it's the $1.9 million noncash share-based compensation and acquisition expense. Is there anything else I'm missing?

The 3 big differences between FFO and FFO-Core for us, which we exclude for FFO-Core, because we think it gives greater comparability to other REITs, as well as other quarters, are: acquisition expenses, so we -- acquisition expenses came out of FFO-Core; the amortization of the share-based performance, stock-based compensation program; and then we have a small amount of rental support payments from sellers that we also add back to FFO-Core. So in the range, the biggest piece for 2014 range is that the share-based compensation is approximately $4 million of that amount, and then the acquisition cost is approximately $600,000 and the rental support payment is about $200,000, and I'm close on my numbers there, Carol.

It appears there are no more questions at this time. I would like to turn the conference back to Jim Mastandrea for any additional or closing remarks.

Well, thank you, Jamie. And I'd like to thank you, all, for joining us today. As you can tell, we continue to work very, very hard, and we have really -- appreciate all of your's confidence and support in everything that we're doing. We would like to invite you at any time to visit us, either in Houston or in Phoenix, and have the opportunity to show you some of the properties that we own or, in fact, you own, and walk you through some of the exciting things that we've been doing and expect to do in 2014. And with that, I'd like to say thank you, and we'll look forward to our next conference call.

Thank you for your participation. This does conclude today's call.