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Whitestone REIT (WSR), a fully integrated real estate company, priced its IPO on 25th August at $12 per share, lower than expected range of $14 - $16 per share, with a first day return of -4.2%.

Business Overview (from prospectus)

We are a fully integrated real estate company that owns and operates commercial properties in culturally diverse markets in major metropolitan areas. Founded in 1998, we are internally managed with a portfolio of 36 commercial properties in Texas, Arizona and Illinois. In October 2006, our current management team joined the company and adopted a strategic plan to acquire, redevelop, own and operate Community Centered Properties. We define Community Centered Properties as visibly located properties in established or developing culturally diverse neighborhoods in our target markets. We market, lease, and manage our centers to match tenants with the shared needs of the surrounding neighborhood. Those needs may include specialty retail, grocery, restaurants and medical, educational and financial services. Our goal is for each property to become a Whitestone-branded business center or retail community that serves a neighboring five-mile radius around our property. We employ and develop a diverse group of associates who understand the needs of our multicultural communities and tenants.

Offering: 3.3 million shares at $12 per share. Net proceeds from the offering will be used to acquire target properties and for general corporate purposes.

Lead Underwriters: Wunderlich Securities, Ladenburg Thalmann & Co. (LTS)

Financial Highlights:

Rental income and tenant reimbursements of approximately $7.8 million for the three months ended June 30, 2010 as compared to $8.2 million for the three months ended June 30, 2009...Property expenses were $3.0 million for the three months ended June 30, 2010, as compared to $3.3 million for the three months ended June 30, 2009...Other expenses were $4.4 million for the three months ended June 30, 2010, as compared to $4.7 million for the three months ended June 30, 2009...General and administrative expenses decreased approximately $353,000 or 22% for the three months ended June 30, 2010 compared to the same period in 2009...Interest expense for the three months ended June 30, 2010 was $1,402,000, a decrease of $68,000, or 5%, from 2009...Net income for the three months ended June 30, 2010 was $166,000 as compared to $47,000 for the three months ended June 30,2009...

Competitors

All of our properties are located in areas that include competing properties. The amount of competition in a particular area could impact our ability to acquire additional real estate, sell current real estate or lease space and the amount of rent we are able to charge. We may be competing with owners, including but not limited to, other REITs, insurance companies and pension funds, with access to greater resources than those available to us.

Many of our competitors have greater financial and other resources than us and may have more operating experience than us. Generally, there are other neighborhood and community retail centers within relatively close proximity to each of our properties. There is, however, no dominant competitor in the Houston, Dallas, San Antonio, Phoenix or Chicago metropolitan areas. Our retail tenants face increasing competition from outlet malls, internet discount shopping clubs, catalog companies, direct mail and telemarketing.

Additional Resources:

Source: Whitestone REIT IPO: Diverse Exposure to U.S. Commercial Real Estate