HOUSTON, Jan. 5, 2015 (GLOBE NEWSWIRE) -- Whitestone REIT (NYSE:WSR) ("Whitestone") announced today that it completed the sale of three office buildings located in Clear Lake, Texas, a Houston sub-market. The suburban office buildings Zeta, Royal Crest and Featherwood were sold for $10.3 million or a 7.7% capitalization rate on trailing twelve month Net Operating Income, and resulted in net proceeds to Whitestone of approximately $7.3 million. As part of the transaction, Whitestone will provide short term seller financing secured by the properties and a personal guarantee by an affiliate of the purchaser.
The three suburban office properties were part of the Company's legacy asset portfolio which was in place when the current management team joined the Company in late 2006. The properties were identified for sale as they do not fit Whitestone's Community Center Properties™ business model nor do they have re-development potential. The Company expects to re-invest the proceeds of the sale into the purchase of assets that fit its core strategy.
The Company expects to recognize $1.8 million of the gain in 2014 and the balance of $2.6 million upon receipt of principal payments on the loan provided by Whitestone, which are projected to be approximately $10,000 in 2017, $12,000 in 2018, and $2.6 million in 2019.
The financial impact of the dispositions falls within the company's previously provided 2014 Guidance.
About Whitestone REIT
Whitestone REIT (NYSE:WSR) is a fully integrated real estate investment trust ("REIT") that owns, manages, operates, leases and repositions and redevelops Value–Add Community Centered PropertiesTM. Whitestone focuses on value creation in its community centers, concentrating on local service-oriented tenants that comprise approximately 70% of its tenants. Whitestone's diversified tenant base provides service offerings including medical, education, casual dining, and convenience services. The largest of its 1,272 tenants comprised less than 1.8% of its annualized base rental revenues as of September 30, 2014. Founded in 1998, the Company is internally managed with a portfolio of 63 commercial properties in Texas, Arizona, and Illinois. For additional information about the Company, please visit www.whitestonereit.com.
Forward-Looking Statements
Statements included herein that state the Company's 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. The Company's actual results, performance or achievements could differ materially from those expressed or implied by these statements. Reference is made to the Company's regulatory filings with the Securities and Exchange Commission for information or factors that may impact the Company's performance.