- Occupancy over 90% - New Tenants Include Merrill Lynch, Starbucks and Orange Theory Fitness
- Combined 96% Occupancy for Pinnacle Phase I and Phase II properties
- Successful Expansion Highlights Whitestone’s Differentiated Model of Meeting Needs and Conveniences of Local Communities with E-Commerce Resistant Tenants
HOUSTON, May 17, 2017 (GLOBE NEWSWIRE) -- Whitestone REIT (NYSE:WSR) (“Whitestone” or the “Company”) today announced that its newest ground-up development, Pinnacle of Scottsdale Phase II, located in Scottsdale, Arizona was now over 90% occupied with the addition of several new tenants, including Merrill Lynch, Starbucks and Orange Theory Fitness.
About Pinnacle Phase II Expansion
Construction was completed in the first quarter of 2017 on this Community Centered PropertyTM, which is adjacent to its Pinnacle of Scottsdale property located in Scottsdale, Arizona. The total construction cost was approximately $7.0 million, including land and carry costs during the development period. The 27,063 square-foot property is now 91% leased as of May 17, 2017.
Whitestone projects annual net operating income on the property to be approximately $0.9 million, exceeding its original estimates. This expansion is estimated to yield a year one unlevered cash-on-cash return of over 12% and an unlevered IRR of over 19%. Whitestone purchased the 4.5-acre land parcel in 2011, in a short-sale transaction, for $950,000, which included a two-level parking garage.
Merrill Lynch Global Wealth Management will occupy 12,810 square feet, joining Starbucks, Orange Theory, Tomaso’s Restaurant and Elements Massage.
About the Neighborhood and Adjacent Center
With a combined 96% occupancy, the successful expansion highlights Whitestone’s business model meeting the needs and convenience of the community with E-commerce resistant tenants. The adjacent., Class A community center was also purchased in 2011 and is anchored by Safeway. Pinnacle of Scottsdale is surrounded, in a 3-mile radius, by a neighborhood of families with a median household income of $112,000. The center also has strong traffic counts with a 50,000 vehicle per day count at the intersection of Scottsdale and Pinnacle Peak roads.
About the New Tenants
- Bank of America Merrill Lynch, a world leader in wealth management and financial services is leasing the second floor and part of the first floor of the Pinnacle Phase II expansion.
- Starbucks expanded and relocated with a new drive thru to meet the local needs as the neighborhood destination for the community.
- Both Orange Theory Fitness and Elements Massage rounded out the health, beauty and wellness aspect of the center, with Orange Theory Fitness signing 400 members in the first month of opening.
- Tomaso’s Restaurant, well known in the Phoenix East Valley expanded to its second location. With al fresco dining, Tomaso’s is a white table cloth destination restaurant known for authentic Italian fare and has been voted the best Italian Restaurant in the Valley since 1977.
CEO Comments
James C. Mastandrea, Whitestone’s Chairman and Chief Executive Officer commented, “Maricopa County is the fastest growing county in the United States per the latest census report. Shortly after our IPO, we began growing the asset base of Whitestone and we targeted Arizona, specifically the areas of Scottsdale, Chandler, Gilbert and Mesa." Mr. Mastandrea added, “We liked the business-friendly environment and projected that these areas would rebound strongly from the recession of 2008 and 2009. With 27 properties in the Phoenix MSA, we are poised to capture the growth of the community and add value by meeting the neighborhood’s needs, providing convenience and unique services, with a well-blended mix of national, regional and local tenants.”
About Whitestone REIT
Whitestone is a community-centered retail REIT that acquires, owns, manages, develops and redevelops high quality “E-commerce resistant” neighborhood, community and lifestyle retail centers principally located in the largest, fastest-growing and most affluent markets in the Sunbelt. Whitestone’s optimal mix of national, regional and local tenants provides daily necessities, needed services and entertainment to the respective communities which are not readily available online. Visit www.whitestonereit.com for additional information.