FOUNTAIN HILLS, AZ-Whitestone REIT continued widening its retail footprint in the metro Phoenix area, closing on the 111,289-square-foot Fountain Hills Plaza. In this transaction, the Houston-base REIT paid $20.5 million to seller J & R Holdings XX LLC, an entity formed by Phoenix-based Pederson Group.
Located at 16605 Palisades Blvd., the dual-anchored center is 87% occupied and was purchased with in-place cash flow of approximately 8% of the purchase price. Glenn Smigiel, Bob Young, Steve Brabant and Rick Abraham of CBRE's Phoenix office represented the seller.
“We are very pleased with this transaction. After redevelopment and significant improvement of the property, we found an ideal buyer in Whitestone,” says Jeff Manelis, president, Pederson Group. “From our initial discussions, through due diligence to closing, Whitestone was excellent to work with and moved quickly to ensure the transaction was completed in a timely, efficient manner. The speed of the transaction enabled us to timely deal with a pending loan maturity.”
The property was constructed in 1986 and Pederson Group redeveloped it in 2009. In addition to Bashas' and Ace Hardware, tenants include Little Caesar's, GNC, H & R Block and Great Clips. Additionally, Fountain Hills Plaza has a 6,000-square-foot vacant pad available for future development.
“Fountain Hills Plaza is a well-located, class A community center that has a proven draw of national brand name tenants who pull additional customer traffic to the existing tenancy," says James C. Mastandrea, Whitestone's chairman and DEO. "The purchase is a value-add opportunity and includes the adjacent approximate one acre development-ready pad site that can accommodate an additional 7,000 square feet of multi-tenant retail space."
The Fountain Hills Plaza buy means Whitestone REIT owns approximately 1.6 million square feet of retail space throughout the metro region. All are strategically located in stabilized neighborhoods with strong demographics, and provide essential services to support local communities. All purchases were off-market and priced at a discount to current replacement cost with a value-add component.
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