Whitestone REIT Announces Purchase of Desert Canyon Shopping Center in Arizona

Whitestone REIT WSR announced today it has purchased Desert Canyon Shopping Center in McDowell Mountain Ranch, located in northern Scottsdale, Arizona. This is Whitestone's third off-market acquisition in the Phoenix area since September 2010. The Center, which contains 62,533 leasable square feet, inclusive of 12,960 square feet leased to two tenants under ground leases, was purchased out of foreclosure from a regional bank in an all cash transaction for $3.65 million, or $58 per leasable square foot. The amount paid is significantly below the Center's replacement cost. Occupancy at Desert Canyon Shopping Center at closing was 65%, including the two ground leases mentioned above. In-place annualized base rental revenues were approximately $450,000 at the time of purchase, and the Company is also entitled to recover the operating expenses from the majority of the existing tenants. The Company expects to further increase the value of this investment through lease up and application of financial leverage.