Whitestone REIT Acquires Paradise Plaza for $16.3 Million
Kid-Friendly Destination Establishes Key Foothold as Company Expands Geographic Coverage Beyond Scottsdale
HOUSTON--(BUSINESS WIRE)-- Whitestone REIT (WSR), a fully integrated real estate company that owns, operates and re-develops Community Centered Properties TM, which are visibly located properties in established or developing culturally diverse neighborhoods, announced today that it has closed on the purchase of Paradise Plaza, a 125,898 square foot 100% leased Community Center in Paradise Valley, for $16.3 million, or $129 per square foot. The purchase price was a 30% discount to estimated replacement cost and was funded through the assumption of a $9.1 million mortgage loan and the balance in cash. The mortgage loan that was assumed is non-recourse, secured by the property, has five years of term remaining, and bears interest at 3.5% in year one and 4.7% in subsequent years.
Whitestone REIT Acquired Paradise Plaza for $16.3 Million - Strategic location expands market presence into the upscale Paradise Valley area in Phoenix and augments the Company's solid presence within adjacent North Scottsdale. The 125,898 square foot Community Center is strategically located on the northeast corner of Cactus Road at Tatum Boulevard. www.whitestonereit.com (Photo: Business Wire)
Paradise Plaza is well located in a high barrier to entry trade area serving the affluent neighborhoods of Paradise Valley, Phoenix and Scottsdale on Cactus Road near North Tatum Boulevard. We now own nearly 750,000 square feet of lease space, including ground leases, in the greater Phoenix area. Paradise Plaza is solidly positioned as a kid-friendly destination with 19 primarily small space service-based tenants that drive traffic into the center. A value-add transformation project at Paradise Plaza is nearing its completion, including final build-out for Paradise Pediatrics, an established physician practice that will relocate to the Center by September, and Kids, Inc. Learning Center, scheduled to commence their lease in August. Construction includes a playground and other complementary neighborhood enhancements to create our signature Community Gathering Spot within the common area to welcome and serve the local community, said James C. Mastandrea, Whitestones Chairman and Chief Executive Officer. We are also evaluating a rental-based covered parking feature as an additional value-add component at Paradise Plaza, as well as for several of our other Arizona properties, where covered parking comes at a premium.
Whitestone now owns seven Community Centers within the significant Scottsdale trade area, including Paradise Plaza. The other Centers include The Shops at Pinnacle Peak, Terravita Marketplace, Pima Norte, The Citadel, and The Pinnacle of Scottsdale, as well as Desert Canyon, located in the McDowell Mountain area. All purchases were priced at a discount to current replacement cost and have a value-add component. Each of these Community Centers are located at high traffic intersections in stabilized neighborhoods, and provide essential services to support local communities including Paradise Valley, Terravita, McDowell Mountain Ranch, Grayhawk, DC Ranch, Silverleaf, Estancia, Desert Highlands, and Troon North Villages. Whitestone also owns three other Community Centers in the greater Phoenix market: Ahwatukee Plaza, MarketPlace at Central, and Gilbert Tuscany Village.
About Paradise Plaza
Paradise Plaza is located on the northeast corner of the intersection of Cactus Road at North Tatum Boulevard, with a traffic count of over 43,000 cars per day. The tenant mix targeting families with children is typical of Whitestones Driving Traffic/Driving ValueTM approach with a cohesive cross-referral service business base. Currently 100% leased with 19 tenants, the Center is home to several pediatric medical/health care service providers, educational providers, a well-known community theater, childrens furniture dealers, bicycle shops, and a variety of other convenience service providers. The tenant base benefits from the lower taxes in the City of Phoenix while serving the adjacent incorporated Town of Paradise Valley, North Phoenix and Scottsdale.
About Whitestone REIT
Whitestone REIT is a fully integrated real estate company that owns, operates and re-develops Community Centered Properties TM, which are visibly located properties in established or developing culturally diverse neighborhoods. Whitestone focuses on value-creation in its Centers, as it markets, leases and manages its Centers to match tenants with the shared needs of surrounding neighborhoods. Operations are structured for providing cost-effective service to local service-oriented smaller space tenants (less than 3,000 square feet). Whitestone has a diversified tenant base concentrated on service offerings including medical, education, and casual dining. The largest of its over 950 tenants comprises less than 1.5% of its rental revenues. Headquartered in Houston, Texas and founded in 1998, the Company is internally managed with a portfolio of commercial properties in Texas, Arizona, and Illinois. For additional information about the Company, please visit www.whitestonereit.com. The Investor Relations section of the Company's website has links to Whitestones filings with the Securities and Exchange Commission, news releases, financial reports and investor newsletters.
Whitestone REIT Acquisitions: Whitestone REIT purchases Community Centered Properties and has worked with banks and financially distressed commercial property owners with pending loan maturities, as well as their tax advisors, estate planners and lenders to close over $95 million in Community Centered Properties in the past 12 months.
Statements included herein that state Whitestones or management's intentions, hopes, beliefs, expectations or predictions of the future are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, which by their nature, involve known and unknown risks and uncertainties. Whitestones actual results, performance or achievements could differ materially from those expressed or implied by these statements. Reference is made to Whitestones regulatory filings with the Securities and Exchange Commission for information or factors that may impact Whitestones performance.
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Anne Gregory, 713-435 2221
Vice President Marketing & Investor Relations
Bradford Johnson, 713-435-2208
Director of Acquisitions
Source: Whitestone REITCopyright Business Wire 2012