Whitestone REIT Acquires Fountain Square for $15.4 Million
Construction Underway for New Planet Fitness Location in Value-Add Scottsdale Community Center
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 off-market purchase of Fountain Square, a 118,209 square foot Community Center in Scottsdale, for $15.4 million, or $130 per square foot. The purchase price was an all-cash transaction and represents a 49% discount to estimated replacement cost.
Whitestone REIT Fountain Square for $15.4 Million. Construction is underway for a new Planet Fitness location in the 118,209 square foot Community Center, which is strategically located on a high-traffic intersection (77,000 cars per day) at the corner of Bell Road at 7th Street in Phoenix. Southwestern Spanish style architecture surrounds several shaded gathering spots and fountains, where the tenant mix ranges from medical and educational service providers to casual dining and convenience services. www.whitestonereit.com (Photo: Business Wire)
Fountain Square is well located on Bell Road near 7th Street in a densely populated trade area serving the Moon Valley and Paradise Valley neighborhoods in northern Phoenix, which has contributed to its stable tenancy. The Center is a value-add acquisition opportunity with current occupancy of 76%. The vacancies since the 08-09 recession are primarily due to restricted and limited funds from the court appointed receiver to pay for tenant improvements and leasing commissions. The upside opportunity in this property is filling the vacant space and creating a Whitestone feature of a primary Community Gathering Place, as the approximately 12 acre property already has an inviting Southwestern Spanish style architecture and design that simply needs some fresh paint and tender love and care, said James C. Mastandrea, Whitestones Chairman and Chief Executive Officer. Fountain Square also has second floor office space currently occupied by various service tenants: a dentist, music school, and optometrist. The Community Center setting is evident on the premises, with several shaded outdoor people-friendly gathering spots and outdoor dining settings surrounding fountains. Construction is currently underway to build out a 20,000 square foot space to launch Planet Fitness as a new tenant. The tenants include salons, several restaurants, medical and educational tenants our standard small space tenant mix formula for our Community Centered property model. The Center is shadow-anchored by Safeway Supermarket, McDonalds and Sleep America.
Whitestone now owns nearly 870,000 square feet of lease space in the greater Phoenix area in eleven Community Centers, strategically located in high traffic neighborhoods, including Fountain Square. The other Centers include Ahwatukee Plaza, The Citadel, Desert Canyon, Gilbert Tuscany Village, MarketPlace at Central, Paradise Plaza, Pima Norte, The Pinnacle of Scottsdale, The Shops at Pinnacle Peak, and Terravita Marketplace. All purchases were off market and priced at a discount to current replacement cost and have a value-add component. Each of these Community Centers is in a stabilized neighborhood with strong demographics, and provides essential services to support local communities.
About Fountain Square
Fountain Square is on the northwest corner of Bell Road at 7th Street on a busy intersection with a traffic count of over 77,000 cars per day. The tenant mix targeting urban families is typical of Whitestones Driving Traffic/Driving ValueTM approach with a cohesive cross-referral service business base. Currently 76% leased with 27 tenants, the Center is home to US Bank and Rent-A-Center, several medical/health care service providers ranging from vision care and dentists to a Weight Watchers location, as well as educational tenants such as Kumon Math & Reading, Yamaha Music School, a community theater, plus several convenience service providers and casual dining venues.
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 consumer service including medical, education, and casual dining. The Company has over 950 tenants, the largest of which comprises less than 1.5% of Whitestones 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 $125 million in Community Centered Properties in the past 24 months.
Forward-Looking Statements: 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.
Photos/Multimedia Gallery Available: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=50414633&lang=en
Anne Gregory, (713) 435 2221
Vice President Marketing & Investor Relations
Bradford Johnson, (713) 435-2208
Director of Acquisitions
Source: Whitestone REITCopyright Business Wire 2012