Whitestone REIT Adds Dana Point and Fountain Square to Phoenix Retail Holdings

VIZZDA—September 24th, 2012 — Houston-based Whitestone REIT has purchased the Dana Park Village Square and Fountain Square neighborhood shopping center in two transactions totaling $61,866,600 and a cumulative 443,070 square feet.

$50.5M / $162.39 per SF

Dana Park, located in Mesa at the Southwest corner of US-60 and Val Vista, totals 310,979 SF; built in 3-phases between 2003 to 2007. Assessor describes the site as 322,348 SF. The property includes six free-standing retail pads, 18,326 SF of second floor office space, and a 4+ acre vacant future development parcel. Dana Park totals nearly 70 acres zoned C-2. Five retail pads are excluded from the sale–sold previously to retailers. Tenants include: AJ’s Fine Foods, Barnes & Noble, Ra Sushi, Z Gallerie, and 50 other boutiques. Whitestone lists occupancy at 71% and cites a 45% discount to estimated replacement cost.

Canada-based TripleFive was the seller and also original developer of the project. Known for trophy assets like Mall of America, TripleFive acquired the land for Dana Park Village Square March 25th, 1999. Initial debt was with First Security Bank, later merged with Wells Fargo. Most recently May 31st, 2011, the Wells Fargo debt was modified- increasing the amount to $82,711,817.

$15,366,600 / $130 per SF

Fountain Square, located in Phoenix at the Northwest corner of 7th St and Bell Road, totals 118,209 SF; built 1986 to 1988. Assessor describes as 120,722 SF. The neighborhood shopping center includes 11 one-story buildings on 17.79 acres zoned C-2. Approximately 98K SF of inline space and 22K SF of pad (3 of 5 freestanding pads are conveyed). The 53K SF Safeway grocery anchor is excluded. Whitestone lists occupancy at 76% and cites a 49% discount to estimated replacement cost.

Fountain Square was previously acquired October 20th, 2005 for $28.9M with $23.36M debt loaned by Merrill Lynch. The note was securitized (CMBS) and assigned to Lasalle Bank March 9th, 2006, further assigned to Wells Fargo Bank November 7th, 2008 and finally assigned to US Bank July 7th, 2009. C-III Asset Management was special servicer on the CMBS debt and noticed the property for trustee sale on December 29th, 2010.

This auction was postponed following the appointment of Michael Crook of Nobeus Property Management as receiver for the property on December 22nd, 2010. Whitestone entered into a purchase agreement with Crook August 3rd, 2012 and received final approval for the sale of real property on September 19th, 2012; acquiring the property before scheduled foreclosure.

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