Whitestone REIT Acquires Mercado at Scottsdale Ranch for $21.3 Million
Newest Community Centered Property, Located in Central Scottsdale
Expands Portfolio in Arizona to 1.4 Million Square Feet
HOUSTON--(BUSINESS WIRE)-- Whitestone REIT (WSR), a fully integrated real estate company that owns, operates and re-develops Community Centered PropertiesTM, announced today the acquisition of Mercado at Scottsdale Ranch, located at the intersection of East Via Linda & Mountain View Road in Scottsdale, Arizona. The 118,730 square foot center has a broad, diverse tenant mix including AJs Fine Foods and Walgreens. The $21.3 million purchase of Mercado includes an $11.1 million debt assumption and a $10.2 million equity requirement which is funded by Whitestones unsecured revolving credit facility. The 11 acre center has in-place cash flow of approximately $1.7 million, or 8% of the purchase price, and is expected to add approximately $0.06 per share in annual Funds From Operations after debt interest expense, based on current shares outstanding.
Whitestone REIT acquired Mercado at Scottsdale Ranch in the affluent Shea Corridor area of central Scottsdale for $21.3 million. Its location, East Via Linda @ Mountain View Road, is a primary ingress / egress to the surrounding neighborhoods. Mercado's broad tenant mix includes AJ's Food Market (AJSB.OB), Walgreens, dining establishments, and a variety of small space tenants, including a mix of health and convenience service providers. The second floor of Mercado houses professional office suites to completely meet the surrounding neighborhoods' needs. www.whitestonereit.com (Photo: Business Wire)
James C. Mastandrea, Whitestones Chairman and Chief Executive Officer said, The Mercado at Scottsdale Ranch is a Class-A stabilized Community Center, with a future value-add opportunity, located in a densely populated, master-planned affluent community. Mercado is the primary shopping center serving the upscale Scottsdale Ranch neighborhood and the nearby Mirador and Ensenada del Oro neighborhoods. The center was purchased below replacement cost at $179 per square foot, and serves an area with significantly higher annual total consumer expenditure per person than the broader Phoenix metropolitan statistical area. Mastandrea added, We believe this acquisition fits our business model perfectly, as 80% of the tenants are small shop and service businesses. We expect that all tenants will benefit from Whitestones in-house property management, leasing, and close proximity to other Whitestone Communities.
Whitestone now owns approximately 1.4 million square feet of gross leasable area in greater Phoenix in 16 Community Centers and future development land parcels. All are strategically located in stabilized neighborhoods with strong demographics, and provide essential services to support local communities. These centers include The Shops at Pecos Ranch, Ahwatukee Plaza, The Citadel, Desert Canyon, Fountain Square, Gilbert Tuscany Village, MarketPlace at Central, Paradise Plaza, Pima Norte, The Pinnacle of Scottsdale, The Shops at Pinnacle Peak, Terravita Marketplace and Village Square at Dana Park. In addition, Whitestone has future development land parcels at The Pinnacle of Scottsdale and Village Square at Dana Park. All purchases were off-market and priced at a discount to current replacement cost with a value-add component.
About Whitestone REIT
Whitestone REIT is a fully integrated real estate company that owns, operates and re-develops Community Centered PropertiesTM, 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 approximately 1,100 tenants, the largest of which comprises less than 1.2% 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 more than $245 million in Community Centered Properties since completing its IPO in August 2010.
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.
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Dave Holeman, (713) 435 2227
Chief Financial Officer
Bradford Johnson, (713) 435-2208
Vice President of Acquisitions
Source: Whitestone REITCopyright Business Wire 2013