HOUSTON, Feb. 29, 2016 (GLOBE NEWSWIRE) -- Whitestone REIT (NYSE:WSR) (“Whitestone” or the “Company”) today announced that it has begun construction on an expansion at Pinnacle of Scottsdale. The Safeway-anchored, 113,108 square foot neighborhood center located in the Company’s Phoenix market, boasts an average household income of $142,000 within a three-mile radius and over 55,000 vehicles per day. The expansion is taking place on land that Whitestone acquired adjacent to the center in December 2011.
The expansion will increase the leasable space of the center by approximately 27,100 square feet, or 24%. The Company projects that the additional space will generate annual net operating income in excess of $700,000 upon lease up. An approximately ½ acre portion of the land being used for the expansion, out of a total of 4.45 acres, has been sold by the Company for $1.1 million. The 4.45 acres were acquired in a “short sale” by the Company for $950,000. The ½ acre of land will be used as part of a proposed high density residential which will be adjacent to the center. The Company stated that the transaction is highly beneficial as it covers the original cost of the land and the high density development will bring additional residents to the immediate area.
The Company noted that it already has a commitment from Tomaso’s Italian Restaurant, voted best Italian restaurant in the Valley since 1977, for their second location in the new space. In addition to Safeway, Pinnacle of Scottsdale includes Starbucks, Ace Hardware, Shell Super Pumper, Hornacek’s Golf Shop, Jalapeno Inferno and a variety of other dining and service providers.
CEO Comments
Jim Mastandrea, Chairman and Chief Executive Officer, commented, “The expansion will allow us to capitalize on the center’s premier location and the sale of the ½ acre portion covers our original land cost. Consistent with our business model, we are always looking for opportunities to expand our presence in a growing and highly desirable demographic and North Scottsdale, which boasts an average household income of $142,000 within a three-mile radius of our property, clearly meets our objective. The expansion will enable us to better serve the highly affluent community.”
Mr. Mastandrea concluded, “This property is one of our many neighborhood centers that are largely ‘internet-resistant’ and meet our criteria for core markets, core strategy, core strengths, core attributes and core thesis.”
Land Sale Details
The Company stated that $300,000 of the purchase price was for the land and the remaining $800,000 was consideration paid for the execution of an amendment to an existing cross parking and easement agreement. In addition, a cost sharing agreement was executed by the parties in which the buyer agreed to reimburse the Company for 50% of the costs for improvements to the site, up to a maximum of $300,000.
About Whitestone REIT
Whitestone REIT (NYSE:WSR) is a fully integrated real estate investment trust ("REIT") that owns, redevelops, repositions, leases, manages and operates Community Centered PropertiesTM. Whitestone focuses on value creation in its community centers, concentrating on local service-oriented tenants. Whitestone's diversified tenant base provides service offerings including grocery, dining, health and wellness, education, services, entertainment and specialty retail. Founded in 1998, the Company is internally managed with a portfolio of 70 commercial properties in Texas, Arizona, and Illinois. For additional information about the Company, please visit www.whitestonereit.com.