Whitestone REIT Acquires San Clemente Neighborhood Retail Center in Austin
HOUSTON, May 08, 2025 (GLOBE NEWSWIRE) -- Whitestone REIT (NYSE:WSR) ("Whitestone" or the "Company"), a neighborhood-focused owner and operator of open-air shopping centers in Texas and Arizona, today announced the acquisition of the 31,832-sqaure-foot, restaurant-anchored San Clemente at Davenport ("San Clemente") in Austin, Texas, which is just minutes from the Apple and Tesla campuses and situated amidst the bustling hub of the area's several technology companies. The San Clemente acquisition complements Whitestone's existing Davenport Village retail center at the same intersection along Loop 360, one of Austin's most traveled corridors, and marks the fifth neighborhood shopping center in Whitestone's portfolio that is located in Texas's capital city.
Whitestone plans to leverage its institutional knowledge of and strong position in the market to strengthen the performance of the asset and unlock its significant upside potential. Whitestone expects to capitalize on the center's very strong dynamics and its own retailer relationships to position the property for long-term growth and relevance within the upscale neighborhoods it serves: Davenport Ranch, Westlake, Rob Roy and Barton Creek.
San Clemente possess many of the attributes that are core to Whitestone's investment philosophy, including:
- San Clemente is located in Austin's most affluent submarket with an average 1-mile radius home value of nearly $1.5 MM and an average household income in excess of $280,000;
- Strict development restrictions and the center's proximity to protected lands have prohibited new retail development from being built within the center's trade area over the last 7 years, despite the surrounding area having less than 40% of Austin's average square retail feet per person;
- Located at the intersection of Loop 360 and West Lake Drive, the center has over 55,000 Vehicles Per Day (VPD) in supporting traffic and will benefit from the completion of the Loop 360 project; and,
- Austin continues to benefit from strong in-migration and a booming tech sector, including the communities San Clemente serves.
"Whitestone's leasing team will capitalize on San Clemente's favorable dynamics and their already strong knowledge of the area in order to deliver significant value to Whitestone shareholders," said Whitestone REIT CEO, Dave Holeman. "This center has all of the dynamics we look for, including strong surrounding schools, a community with a robust job market and upwardly mobile families and the potential to actively remerchandise the center," added Whitestone REIT President and COO, Christine Mastandrea.
San Clemente is situated within a 3-mile radius of Pennybacker Bridge and Red Bud Trail, the two main river crossings in the Austin area that define traffic flow across the Colorado River by constricting all vehicles to the Westlake Drive and Loop 360 thoroughfares. The center will also benefit from the upcoming Four Seasons development, adding nearly 200 high-end residences to the area.
The center tenant mix includes Fresa's, a local Mexican favorite with a welcoming atmosphere and outdoor patio that anchors the property, Iron Fitness, a state-of-the-art training and fitness facility and Greenlake Energy, an emerging energy technology company.
Whitestone's acquisition program complements its strong organic growth. The Company reported first quarter earnings on May 1st and encourages investors to review the related investor presentation.
About Whitestone REIT
Whitestone REIT (NYSE:WSR) is a community-centered real estate investment trust (REIT) that acquires, owns, operates, and develops open-air, retail centers located in some of the fastest growing markets in the country: Phoenix, Austin, Dallas-Fort Worth, Houston and San Antonio.
Our centers are convenience focused: merchandised with a mix of service-oriented tenants providing food (restaurants and grocers), self-care (health and fitness), services (financial and logistics), education and entertainment to the surrounding communities. The Company believes its strong community connections and deep tenant relationships are key to the success of its current centers and its acquisition strategy. For additional information, please visit the Company's investor relations website.
Forward-Looking Statements
This Report contains forward-looking statements within the meaning of the federal securities laws, including discussion and analysis of our financial condition and results of operations, statements related to our expectations regarding the performance of our business, and other matters. These forward-looking statements are not historical facts but are the intent, belief or current expectations of our management based on its knowledge and understanding of our business and industry. Forward-looking statements are typically identified by the use of terms such as "may," "will," "should," "potential," "predicts," "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates" or the negative of such terms and variations of these words and similar expressions, although not all forward-looking statements include these words. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements.
Factors that could cause actual results to differ materially from any forward-looking statements made in this Report include: the imposition of federal income taxes if we fail to qualify as a real estate investment trust ("REIT") in any taxable year or forego an opportunity to ensure REIT status; uncertainties related to national, international, regional and local economic conditions, including impacts and uncertainty from trade disputes and tariffs on goods imported to the United States and goods exported to other countries; real estate risks, including fluctuations in real estate values and the general economic climate in local markets and competition for tenants in such markets;; legislative or regulatory changes, including changes to laws governing REITs; adverse economic or real estate developments or conditions in Texas or Arizona, Austin, Houston, Dallas, San Antonio, Scottsdale and Phoenix in particular, including the potential impact of public health emergencies, on our tenants' ability to pay their rent, which could result in bad debt allowances or straight-line rent reserve adjustments; increases in interest rates, including as a result of inflation, which may increase our operating costs or general and administrative expenses; our current geographic concentration in the Austin, Houston, Dallas, San Antonio, Scottsdale and Phoenix metropolitan area markets makes us susceptible to potential local economic downturns; natural disasters, such as floods and hurricanes, which may increase as a result of climate change may adversely affect our returns and adversely impact our existing and prospective tenants; increasing focus by stakeholders on environmental, social, and governance matters; financial institution disruptions; availability and terms of capital and financing, both to fund our operations and to refinance our indebtedness as it matures; decreases in rental rates or increases in vacancy rates; harm to our reputation, ability to do business and results of operations as a result of improper conduct by our employees, agents or business partners; litigation risks; lease-up risks, including leasing risks arising from exclusivity and consent provisions in leases with significant tenants; our inability to renew tenant leases or obtain new tenant leases upon the expiration of existing leases; risks related to generative artificial intelligence tools and language models, along with the potential interpretations and conclusions they might make regarding our business and prospects, particularly concerning the spread of misinformation; our inability to generate sufficient cash flows due to market conditions, competition, uninsured losses, changes in tax or other applicable laws; geopolitical conflicts, such as the ongoing conflict between Russia and Ukraine, the conflict in the Gaza Strip and unrest in the Middle East; the need to fund tenant improvements or other capital expenditures out of our operating cash flow; and the risk that we are unable to raise capital for working capital, acquisitions or other uses on attractive terms or at all: the ultimate amount we will collect in connection with the redemption of our equity investment in Pillarstone Capital REIT Operating Partnership LP ("Pillarstone" or "Pillarstone OP."); 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 from time to time.
Non-GAAP Financial Measures
This release contains supplemental financial measures that are not calculated pursuant to U.S. generally accepted accounting principles ("GAAP") including EBITDAre, FFO, NOI and net debt. Following are explanations and reconciliations of these metrics to their most comparable GAAP metric.
NOI: Net Operating Income: Management believes that NOI is a useful measure of our property operating performance. We define NOI as operating revenues (rental and other revenues) less property and related expenses (property operation and maintenance and real estate taxes). Other REITs may use different methodologies for calculating NOI and, accordingly, our NOI may not be comparable to other REITs. Because NOI excludes general and administrative expenses, depreciation and amortization, equity or deficit in earnings of real estate partnership, interest expense, interest, dividend and other investment income, provision for income taxes, gain on sale of property from discontinued operations, management fee (net of related expenses) and gain or loss on sale or disposition of assets, and includes NOI of real estate partnership (pro rata) and net income attributable to noncontrolling interest, it provides a performance measure that, when compared year-over-year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact to operations from trends in occupancy rates, rental rates and operating costs, providing perspective not immediately apparent from net income. We use NOI to evaluate our operating performance since NOI allows us to evaluate the impact that factors such as occupancy levels, lease structure, lease rates and tenant base have on our results, margins and returns. In addition, management believes that NOI provides useful information to the investment community about our property and operating performance when compared to other REITs since NOI is generally recognized as a standard measure of property performance in the real estate industry. However, NOI should not be viewed as a measure of our overall financial performance since it does not reflect the level of capital expenditure and leasing costs necessary to maintain the operating performance of our properties, including general and administrative expenses, depreciation and amortization, equity or deficit in earnings of real estate partnership, interest expense, interest, dividend and other investment income, provision for income taxes, gain on sale of property from discontinued operations, management fee (net of related expenses) and gain or loss on sale or disposition of assets.
Investor and Media Contact:
David Mordy
Director, Investor Relations
Whitestone REIT
(713) 435-2219
[email protected]
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/514ab541-7756-43f8-bac8-458ac667e448
