SEC Comment Letter for Whitestone REIT (WSR) (CIK 0001175535) (WSR) — Dec 27, 2017
Whitestone REIT (WSR) (CIK 0001175535)
Date: Dec. 27, 2017 · CIK: 0001175535 · Accession: 0000000000-17-045118
AI Filing Summary & Sentiment
File numbers found in text: 001-34855
Letter
Mail Stop 3233 December 26, 2017 Via Email Mr. David K. Holeman Chief Financial Officer Whitestone REIT 2600 South Gessner, Suite 500 Houston, TX 77063
Re: Whitestone REIT Form 10-K Response dated November 22 , 2017 File No. 001-34855
Dear Mr. Holeman :
We have reviewed your November 22, 2017 response to our comment letter and have the following comments. In some of our comments , we may ask you to provide us with information so we may better understand your disclosure.
Please respond to these comments within ten busine ss days by providing the requested information or advis e us as soon as possible when you will respond. If you do not believe our comments apply to your facts and cir cumstances, please tell us why in your response.
After reviewing your response to these comments, we may have additional comments. Unless we note otherwise, our references to prior comments are to comments in our November 9, 2017 letter .
Notes to Consolidated Financial Statements
Note 5. Variable Interest Entities, page F -18
1. We note from page F -11 of Pillarstone Capital REIT’s 2016 10 -K that “p ursuant to the Amended and Restated Agreement of Limited Partnership, subject to certain protecti ve rights of the limited partners described below, the general partner has full, exclusive and complete responsibility and discretion in the management and control of Pillarstone OP, including the ability to cause Pillarstone OP to enter into certain major transactions including a merger of Pillarstone OP or a sale of substantially all of the assets of Pillarstone OP. The limited partners have no power to remove the general partner without the general partner's consent. ” Please reconcile this to the disclo sure immediately
David K. Holeman Whitestone REIT December 26, 2017 Page 2
following, which states that “i n addition, pursuant to the Amended and Restated Agreement of Limited Partnership, the general partner may not conduct any business without the consent of a majority of the limited partners other than in conn ection with certain actions described therein. ” Please explicitly detail for us all protective and substantive participating rights of the limited partners. Additionally, please tell us how the general partner may have full, exclusive and complete respon sibility and discretion in the management and control of Pillarstone OP, but may not conduct any business without the consent of a majority of the limited partners.
2. We note that you have been delegated property management, leasing, day -to-day advisory and administrative services and all rights and duties to provide services for Pillarstone OP. Please tell us whether Pillarstone REIT has any rights that may preclude you from exercising your delegated power to direct the day -to-day business decisions that directly impact the economic performance of Pillarstone OP.
3. Please tell us whether you have the right to 1) select, terminat e or set the compensation of management responsible for implementing Pillarstone OP’s policies and procedures or 2) establish operat ing and capita l decisions of Pillarstone OP , including budgets, in the ordinary course of business. Refer to ASC 810 -10-25-11.
You may contact Kristi Marrone, Staff Accountant , at (202) -551-3429 or me at (202) 551 -3395 with any questions.
Sincerely,
/s/ Isaac Esquivel
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Mail Stop 3233 December 26, 2017 Via Email Mr. David K. Holeman Chief Financial Officer Whitestone REIT 2600 South Gessner, Suite 500 Houston, TX 77063 Re: Whitestone REIT Form 10-K Response dated November 22 , 2017 File No. 001-34855 Dear Mr. Holeman : We have reviewed your November 22, 2017 response to our comment letter and have the following comments. In some of our comments , we may ask you to provide us with information so we may better understand your disclosure. Please respond to these comments within ten busine ss days by providing the requested information or advis e us as soon as possible when you will respond. If you do not believe our comments apply to your facts and cir cumstances, please tell us why in your response. After reviewing your response to these comments, we may have additional comments. Unless we note otherwise, our references to prior comments are to comments in our November 9, 2017 letter . Notes to Consolidated Financial Statements Note 5. Variable Interest Entities, page F -18 1. We note from page F -11 of Pillarstone Capital REIT’s 2016 10 -K that “p ursuant to the Amended and Restated Agreement of Limited Partnership, subject to certain protecti ve rights of the limited partners described below, the general partner has full, exclusive and complete responsibility and discretion in the management and control of Pillarstone OP, including the ability to cause Pillarstone OP to enter into certain major transactions including a merger of Pillarstone OP or a sale of substantially all of the assets of Pillarstone OP. The limited partners have no power to remove the general partner without the general partner's consent. ” Please reconcile this to the disclo sure immediately David K. Holeman Whitestone REIT December 26, 2017 Page 2 following, which states that “i n addition, pursuant to the Amended and Restated Agreement of Limited Partnership, the general partner may not conduct any business without the consent of a majority of the limited partners other than in conn ection with certain actions described therein. ” Please explicitly detail for us all protective and substantive participating rights of the limited partners. Additionally, please tell us how the general partner may have full, exclusive and complete respon sibility and discretion in the management and control of Pillarstone OP, but may not conduct any business without the consent of a majority of the limited partners. 2. We note that you have been delegated property management, leasing, day -to-day advisory and administrative services and all rights and duties to provide services for Pillarstone OP. Please tell us whether Pillarstone REIT has any rights that may preclude you from exercising your delegated power to direct the day -to-day business decisions that directly impact the economic performance of Pillarstone OP. 3. Please tell us whether you have the right to 1) select, terminat e or set the compensation of management responsible for implementing Pillarstone OP’s policies and procedures or 2) establish operat ing and capita l decisions of Pillarstone OP , including budgets, in the ordinary course of business. Refer to ASC 810 -10-25-11. You may contact Kristi Marrone, Staff Accountant , at (202) -551-3429 or me at (202) 551 -3395 with any questions. Sincerely, /s/ Isaac Esquivel Isaac Esquivel Staff Accountant Office of Real Estate and Commodities