- Pinnacle of Scottsdale Expansion New Tenants Include Merrill Lynch, Starbucks, Tomaso’s, Elements Massage, and Orange Theory Fitness
- The Successful Expansion of Pinnacle brings combined occupancy of 98%
- Shops at Starwood Expansion New Tenants Include Chef Inspired Restaurants Arepa, Up Inspired Kitchen, as well as Health, Wellness, and Beauty Providers Beverly Hills Rejuvenation and Aalam the Salon
- The Successful Expansion of Starwood brings combined occupancy of 81%
HOUSTON, Aug. 08, 2017 (GLOBE NEWSWIRE) -- Whitestone REIT (NYSE:WSR) (“Whitestone” or the “Company”) today announced new updates in two of its premier assets as the company continues to execute on its Community-Centered, E-Commerce Resistant strategy.
About Pinnacle at Scottsdale
Pinnacle is located in North Scottsdale with a median household income of $142,000, and in Maricopa County, one of the fastest growing counties according to Forbes. Highlighted by the recent addition of Merrill Lynch Global Wealth Management in the expansion, the tenant mix includes Safeway®, Ace® Hardware, Shell® Oil, Hornacek’s House of Golf, Jade Palace, Jalapeno Inferno (privately owned restaurant, recognized by Phoenix Times Magazine Best of Phoenix Awards), SubwayTM, Stag Tobacconist, Starbucks© Coffee, and Pinnacle Peak Dentistry.
About the Pinnacle Expansion
The recent expansion includes high profile tenant Merrill Lynch Global Wealth Management, which will occupy approximately 14,000 square feet, joining Starbucks, Orange Theory, Tomaso’s Restaurant and Elements Massage.
Whitestone’s quick lease up allows it to now project annual NOI of the expansion to exceed its original estimates. This expansion is now 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 211-space, two-level parking garage.
Construction was completed in the first quarter of 2017 on this 27,063 square foot expansion to its Pinnacle of Scottsdale property located in Scottsdale, Arizona. The total construction cost was ~$7 million, including land and carry costs during the development period.
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 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 600 members in the first month of opening.
- Tomaso’s Restaurant, well known in the Phoenix East Valley expanded to its second location. 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.
About The Shops at Starwood and Expansion
The Shops at Starwood is a Class A property located on the Dallas North Tollway in the “Platinum Corridor” of Dallas, one of the fastest growing cities in the US according to Forbes, and is within a mile of the Dallas Cowboys training facility (http://www.shopsatstarwood.com/). The highly visible community retail center, which possesses some of the highest rents in WSR’s portfolio, is surrounded by neighborhoods in which the average household income is in excess of $125,000. The Shops at Starwood was acquired in December 2011 for $15.7 million and currently possesses a trailing 12 month net operating income (“NOI”) of $1.5 million (~9.5% unlevered cash on cash return).
Existing tenants at Starwood such as True Fire Restaurant, Club Pilates, Century 21, and The Gents Place, an upscale Men’s Grooming and Lifestyle Club, benefit from expansion of complementary local, community-centered and service-oriented businesses. Success of The Gents Place was profiled on CNBC’s Squawk Box on January 25, 2017.
Construction on the expansion was completed in the first quarter of 2017 at a total construction cost of ~$10 million, including land and carry costs during the development period. The 35,351 square-foot expansion includes new tenants:
- Up Inspired Kitchen – A locally owned, locally sourced, all-natural, casual breakfast & brunch restaurant focused on healthy living.
- Arepa – A family owned restaurant, headed by Executive chef, partner, and popular online personality Mary Ann Allen, specializing in a modern twist to Latin cuisine.
- Bottled in Bond – A cocktail parlour & kitchen inspired by the Bottled in Bond Act of 1897, which serves craft cocktail and American whiskey classics with a creative pour.
- Beverly Hills Rejuvenation - An expanding, super-regional, high-end, comprehensive wellness center for medical aesthetics with CA, AZ, NV, FL and TX locations.
- Aalam the Salon – A growing, upscale Northern Texas hair salon that caters to both men and women and showcases an award winning interior design that creates a relaxing yet unforgettable experience.
Whitestone projects annual net operating income on the expansion to be approximately $1.2 million, exceeding its original estimates. This expansion is estimated to yield a year one unlevered cash-on-cash return of over 10%.
CEO Comments
James C. Mastandrea, Whitestone’s Chairman and Chief Executive Officer commented, “We are proud to be part of the growing and thriving Frisco community, which is just north of Dallas. We acquired The Shops at Starwood and the surrounding land in anticipation of the tremendous growth in both population and employment that is currently taking place. Our expansion of The Shops at Starwood allows us to offer a greater assortment of unique and personalized services to the growing, affluent community.”
Regarding the Pinnacle expansion, Mr. Mastandrea added, “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 concluded, “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.
Forward-Looking Statements
Certain statements contained in this press release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company intends for all such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable. Such information is subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of the Company’s performance in future periods. Such forward-looking statements can generally be identified by the Company’s use of forward-looking terminology, such as “may,” “will,” “plan,” “expect,” “intend,” “anticipate,” “believe,” “continue” or similar words or phrases that are predictions of future events or trends and which do not relate solely to historical matters, and include, without limitation, the Company’s beliefs and intentions regarding the impact and results of the disposition and transition to a pure-play retail REIT and other factors detailed in the Company's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents the Company files with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company cannot guarantee the accuracy of any such forward-looking statements contained in this press release, and the Company does not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.