Erez Asset Management Responds to "False Accusations" in Whitestone REIT PR

Erez Asset Management, LLC ("Erez"), a shareholder of Whitestone REIT (NYSE:WSR) ("Whitestone" or the "Company") which has nominated two candidates for election at Whitestone's upcoming 2024 Annual Meeting of Shareholders, today reiterated the need for change at Whitestone and responded to Whitestone's press release falsely accusing Erez of pursuing an offer to acquire the Company.

In its press release earlier today, Whitestone claims to have "discovered" that an early and outdated Erez investor presentation in which Erez discusses Whitestone constitutes "collusion" to acquire the Company. In fact, Erez explored a number of potential strategies related to Whitestone before deciding on its current approach, and Erez is not pursuing an acquisition of Whitestone or using the strategy or tactics of the outdated presentation. The presentation Whitestone touts in its press release was superseded by later presentations and no one who received the earlier presentation is an investor with Erez.

Bruce Schanzer, Chairman of Erez, issued the following statement:

Whitestone today has presented an outdated presentation that Erez made before concluding that there was a superior approach to enhancing the value of Whitestone. The fact is that Erez has not pursued the strategy described in the materials Whitestone so disingenuously and breathlessly touts in its press release today.

Moreover, Erez is not capitalized to acquire Whitestone, is not seeking to raise capital to make an offer, nor does it have any interest in or intention of making an offer. Like any thoughtful investor, Erez spoke with stakeholders before making an investment and pursuing its campaign for board representation. Notably, Erez discontinued all contact with Mr. Mastandrea in October 2023 after a single videoconference with principals and 2-3 subsequent conversations among advisors. There has been no substantive communication with him directly or indirectly in more than six months.

It is very troubling that a group of trustees with no industry experience and a track record of poor corporate governance practices are attempting, with brazen falsehoods, to keep me off this Board. Why is Whitestone so afraid of having an experienced industry executive and investor on the Board? And why would they stoop to such low-road tactics as to mischaracterize an outdated pitch deck, undoubtedly obtained in violation of confidentiality obligations, just to paint one of their engaged shareholders in a bad light?

It is particularly ironic that a REIT that for seven years has hidden the business relationship between its Chairman, Dave Taylor, and its former CEO, Mr. Mastandrea, is now claiming it found a smoking gun because I had one call with Mr. Mastandrea. Whitestone's own Chairman, Mr. Taylor, served as the undisclosed attorney for Pillarstone, a company controlled by Mr. Mastandrea, before joining the Whitestone Board and giving Mr. Mastandrea a substantial raise at Whitestone. Thus, it is especially galling to be so recklessly defamed in today's release.

Today's release is a desperate attempt by Whitestone to distract shareholders from the important opportunity before them to upgrade their Board and begin the process of enhancing the value of the Company and addressing the manifold issues it faces.

Of all the shopping center REITS that Whitestone considers its peers, Whitestone has for years traded at the largest discount to net asset value ("NAV"). None of its trustees have any experience with real estate capital markets or REIT operations.

The Company's Board of Trustees comprises three former service providers to the Company, none of whom insisted on disclosure of their longstanding and deep ties with the Company prior to, or after, their appointments to the Board. And Whitestone's low valuation and underperformance has been fostered by worst-in-class governance, including an unusual 5% poison pill with a slow hand feature, the refusal to accept the resignation of a trustee who failed to win shareholder support, the seating of a trustee who then committed financial fraud (and went to jail), the setting and missing of "performance" targets for executive compensation in 2023 that were lower than the achieved performance in 2022, and missing lowered guidance in 2023, among other issues.

While I am disappointed at the uncivilized and inappropriate approach Whitestone has taken today, I look forward to hopefully joining the Board along with Cathy in a spirit of good will, with the harsh exchanges of this proxy contest behind us and with the best interests of Whitestone's shareholders as a paramount value." Mr. Schanzer concluded.

One thing is clear after today's unprofessionalism by Whitestone's trustees: the time for change has come.

To ensure the election of Catherine Clark and Bruce Schanzer, Erez encourages all Whitestone shareholders to vote "FOR" Catherine Clark and Bruce Schanzer and "WITHHOLD" from David Taylor and Nandita Berry using the BLUE proxy card.