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RETAIL NEWS
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Whitestone REIT Spends $41 Mil on Two TX Retail Centers

12/31/14

Whitestone REIT completed the acquisitions of two Community Centered Properties in Sugar Land, TX. The properties, Williams Trace Plaza and Shops at Williams Trace, represent Whitestone's first purchases in the Houston market since the company became publicly traded in 2010 and highlight Whitestone's transition from its diversified legacy properties in Houston to a retail concentrated portfolio.

Williams Trace Plaza was purchased for $20.1 mil and Shops at Williams Trace for $20.6 mil, for a total acquisition price of $40.7 mil. The acquisition is immediately accretive with current annual net operating income for the two properties of approximately $3.1 mil, or 7.2% of the purchase price.

Both acquisitions have considerable value-add upside and are accretive to Funds from Operations ("FFO") per share, at the current combined occupancy of 91%, and are expected to contribute $0.10 per share to FFO in 2015. The acquisition was funded from Whitestone's new unsecured $500 mil credit facility with nine major banks, which is currently priced at 1.86%.

Williams Trace Plaza totals 129.2k sf of leasable space on approximately 15 acres. Occupancy of the center is currently 95%. Shops at Williams Trace totals 133k sf of leasable area on approximately 12 acres. Occupancy of the center is currently 87%.

The two Williams Trace Shopping Centers, located along Texas State Highway 6 with a daily traffic count of over 50,000 cars, meet the needs of the growing Asian and young family population, whose household incomes average $115k per year in the surrounding 72,000 homes. The strong existing tenant mix reflects Whitestone's business model and include national as well as regional and local tenants. The centers, anchored by Randall's and 99 Ranch Market, include additional tenants such as Walgreens, Luby's Cafeteria, Los Tios Restaurant and Kumon Math and Reading, who have contributed to the centers' consistently above 90% average historical occupancy.

The City of Sugar Land is a diverse community and regional employment center, a nationally acknowledged city for its safe environment, quality of life and public-private partnerships. The acquired centers are strategically located near high-profile corporations including Minute Maid, UnitedHealthcare, Texas Instruments, Schlumberger, Fluor Corporation, The University of Houston System at Sugarland, four leading healthcare facilities.

James C. Mastandrea, Whitestone's Chairman and Chief Executive Officer, said, "The two properties are our first major acquisitions in the Houston market and bring Whitestone's Houston footprint to over 2.6 msf of leasable space in 33 Community Centered Properties. What attracted us to Williams Trace Plaza and the Shops at Williams Trace is the highly complementary tenant mix and low historical tenant turnover, as well as the highly visible, prime location in Sugar Land, Texas. The community topped Money Magazine's selection of '15 small cities that offer great opportunity', with lower-than-average unemployment, positive historical job and population growth and strong projected future growth."





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