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whitestonereit.com, in the Investor Relations section.
With that, let me pass the call to Jim Mastandrea.
Today, I would like to share what I believe are pivotal to Whitestone's business, and our CFO, Dave Holeman, will provide even greater detail our operating and financial performance as well as a more detailed COVID update.
Given that we've all been affected by COVID-19 pandemic, we hope that all of you, your families and the businesses are doing well and staying safe.
The past six months have been incredibly challenging for everyone across the country and the world.
As the U.S. economy fell off the cliff in March of 2020, we reacted quickly with safeguards we had in place.
In terms of our markets and specifically, as it relates to our community-centered shopping centers located within Texas and Arizona, we too have faced extraordinary challenges, although I believe somewhat less than other parts of the country, operating in states with more business-friendly characteristics as we are.
At the time of our earnings call back in May, we were in the early stages of the pandemic and 63% of our tenants were open, and April collections were 64%.
As I report today, I am pleased to say that 94% of our businesses are open, and we collected 81% of our rents during the second quarter and have collected 86% for July so far.
Our business model, which has been crafted from the lessons we learned during the 2008 recession and prior economic downturn, performs exceptionally well in good times and minimizes financial risk in these toughest of times.
Our business operations have produced exceptional compounded growth rates since our IPO in 2010, and this trend continues, with our relatively strong performance in the second quarter and in the face of very difficult headwinds.
Whitestone's foundation is built on three key pillars.
First Whitestone's philosophy, including how we acquire the right real estate and then how we effectively operate and lease and manage it.
The second is our entrepreneurial culture in which employees become shareholders and participate shoulder-to-shoulder with our shareholders and value to help create.
And third, our experienced management team that extends beyond this 12 years they worked together producing results for our investors, and consistently demonstrating an ability to capture and capitalize on opportunities that others may miss.
My first point is that our philosophy provides us with autonomy to act quickly and decisively.
Even before the pandemic, the rapid shift toward online shopping as the preferred distribution channel was taking a huge toll.
Store closures and retail transactions hit all-time high.
The pandemic only served to amplify that trend.
Overall, Whitestone stayed on point with our strategy.
Our business strategy, which was formulated in an economic down cycle with great recession of a decade ago, is created to withstand tough times and significant structural change in the structure of our industry e-commerce.
Our contrarian approach focuses on buying open air properties in Texas and Arizona.
These states have led the nation in population growth and small business formations over the past several years.
Investing in real estate in these states allow us more freedom and control of our properties to lease and manage the owners as builders.
This affords the flexibility to make decisions that could be implemented quickly and strategically.
If a tenant performs well, we can expand them into other locations.
And if they do not succeed, we can replace them with no hesitation.
Keep in mind that we have a large tenant base and tenant can impact our revenue stream more than 3% if they go viral.
We fill our properties with business owners committed to innovating, growing and contributing to their communities.
Our diversified mix of tenants that provide essential services for needs that can't be easily acquired online, if at all.
As a result, our open air center is providing community experiences that cater to the adjacent neighborhood as an extension of the resident's lifestyle.
We continue to take a proactive approach to engaging with our tenants and are always looking for ways to help their businesses.
Our market level teams, with their deep tenant knowledge, have developed longtime relationships with local entrepreneurs.
This is what differentiates us from many of our peers who tend to have relationships with the real estate arm of national tenants, not the person fully committed to making daily tough decisions in running the business.
We have implemented numerous strategic initiatives at the property level, including on-site measures to help customers feel safe, a digital signing, and have worked with many of our restaurant tenants to increase their takeout, meal delivery business, and expand their outdoor spaces to generate more revenue, while maintaining safe social distancing.
As our tenant businesses return to full capacity, we believe our initiatives will continue to produce additional revenue sources for them.
Our philosophy has produced sustained profitability and added value to our properties, resulting in industry-leading returns because it works.
My second point is at Whitestone, the core of our culture is our people.
We believe a strong culture makes for a strong business.
Our team members are committed to creating value for all shareholders and they go the extra mile.
After two months of effective remote working, our associates reporting feeling safe and excited about returning to the office.
We implemented safety measures in our offices, and now we have our entire dedicated workforce back in each of our offices.
From the beginning of the pandemic, Whitestone associates worked tirelessly, continuing to manage in these properties with an expansive base of approximately 1,400 tenants.
They conducted themselves with integrity and fairness, helped tenants access PPP loans, providing temporary open/closed signs, and in some cases agreeing to rent deferrals, not for giving us any pressure and give tenants time to recover.
Working in the team, they have also been willing to make tough decisions that are in the best interest of our shareholders.
We want all of our tenants to succeed and make it through these tough times.
Yet we've seen a few who are taking advantage of this situation, not working collaboratively with us and not necessarily anxiously willing to pay the rent.
We expect to honor our commitments and we expect our tenants to honor theirs, which means paying the rent.
During the quarter, we locked out a few tenants who by the way are well capitalized.
In most of these situations, these tenants pay the full amount of rent always and continue operating in the states.
We repeated this tough love approach several times, even though we prefer a more collaborative approach of working with our tenants.
Our leadership team has both the depth and breadth of experience in the industry, which leads me to my third point.
I would like to say that it is not only what we own but it's what we do with what we own.
As a result of the skills and experience of our team, we have and we will continue to identify structural shifts in the industry before they happen and capitalize on those opportunities.
We know our markets, we know our properties, we know our tenants and we know the consumer.
From the start, we understood that by owning and operating quality properties in global markets, mastering consumer business and preferences and staying disciplined, we could succeed.
In closing, our philosophy, culture and experience underlies our brand that identifies lifestyle in the real estate industry with a formula that produces leading investment results.
We call this hard work and as our brand evolves within the industry, we believe our work will be recognized for the results we produce.
We believe that all shareholders should have the benefit real estate by owning shares in Whitestone.
We also know that we have continued to gain their confidence by delivering meaningful value and producing stable, predictable cash flow, value appreciation through asset management and leasing that increased 2% to 3% annually.
And when appropriate, both through acquisitions and development, to achieve scale and long-term sustainable value.
We have a highly dedicated team that works every day to create local connections and communities that thrive, and we feel strongly that we are positioned to withstand the current headwinds and thrive into the future.
Given the severe economic pressures caused by the stay-at-home orders during the quarter, our portfolio has held up remarkably well.
Entering the pandemic, our overall occupancy stood at 89.7%.
Despite having a significant amount of our tenant businesses closed or severely impacted for all or part of the quarter, we only had a handful of tenants closed for good, such that the portfolio occupancy rate held up well, ending the quarter at 89.2%.
Also, our annualized space rent per square foot held relatively flat at $19.58.
While our square foot leasing activity was down 37% from the second quarter of 2019, we were pleased with positive leasing spreads of 13.5% and 3.4% on renewals and new leases signed in the quarter.
As Jim mentioned, for the quarter, we collected 81% of our rents.
This includes base rent and triple net charges billed monthly.
We have also entered into rent deferral agreements for 5% of our second quarter rents.
As part of the deferral agreement, we have negotiated beneficial items such as entry into our online payment portal, reporting of tenant sales, suspension of co-tenancy requirements, loosening of exclusives or restrictions, allowing further development and stronger guarantees.
Today, 94% of our businesses are open.
As a result, July collections have shown improvement.
To date, we have collected 86% of our July rents which compares favorably to Q2 and to the April collections of 64% we reported at this time last quarter.
While we are encouraged by how things are progressing, the pandemic took a toll on our business during the second quarter in terms of our financial results.
Funds from operations for the quarter was $9.6 million, or $0.22 per share, compared to $11.1 million, or $0.27 per share, in the same quarter of the prior year.
The decrease is primarily due to the impact of the pandemic, which resulted in a charge of $2.8 million, or $0.07 per share, related to the collectibility of revenue, which includes $500,000, or $0.01 per share, for noncash straight-line rent receivables.
Let me add a little color on our flexibility analysis related to the pandemic.
For the quarter, we recorded a bad debt reserve of $2.3 million, which excludes reserves for straight-line rents and unbilled amounts.
Our cash collections for the quarter were 81%.
So with the remaining 19% of unselected rents, which includes 5% of agreed rent deferrals, we reserved 41%.
Additionally, we have converted approximately 70 tenants, representing 3% of our GLA and 3.2% of our revenue, to cash basis accounting.
Those tenants paid 41% of their own rent in Q2.
We have provided some additional details on our collections that can be found on page 25 of the supplemental.
Turning to the balance sheet.
Since March, we have implemented various measures to conserve cash, including further reductions in head count.
Today, we have approximately $45 million in cash, representing an $8 million or 22% increase since March 31.
We have one $9 million mortgage loan maturing in 2020, which we expect to refinance in the third quarter, and no debt maturities in 2021.
Currently, we have $110.5 million of capacity and $1.2 million of borrowing availability under our credit facility.
Borrowing availability under the credit facility is largely driven by trailing 12-month net operating income for unencumbered properties.
Assuming that NOI for the third quarter is the same as the second quarter, we project that our current borrowing will exceed our available borrowing at the next measure period, which is September 30, 2020.
We expect to remain in compliance with our debt covenants and continue to work closely with our bank group.
We have seen pent-up demand in our markets as consumers are leaving their homes and returning quickly and in force.
Parking lots are filling, stores and restaurants are active, and figuring out creative ways to do business.
Whitestone is well positioned to capture this pent-up demand and intends to do so.
Our team has worked together through this ongoing crisis, and our shareholders will reap significant future benefits through greater collaboration, a more robust exchange of ideas, better and more effective communication, and improved systems and processes that provide new actionable data and allow us to more efficiently scale our infrastructure.
Whitestone is continuing to perform and deliver on its strategic plan.
It is in many of the most highly desirable growth markets and high population growth states.
We look forward to providing an update as we progress.
And with that, we will now take questions.
Operator, please open the lines.

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q2 revenue $2.8 million.

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