Whitestone REIT (WSR) recently acquired Heritage Trace Plaza — its first property in Fort Worth, TX — for $20.1 million. This real estate investment trust (REIT) financed the purchase with its corporate credit facility. However, shares of Whitestone dipped 0.20% in yesterday’s trading session on broader market concerns.
Spanning 70,431 square feet, Heritage Trace Plaza is a Class A Community Center Property. This mixed-use neighborhood property is positioned at one of the busiest intersections in Alliance region. The asset is 98% leased and tenant roster includes Texas Health Resources, FedEx Corporation (FDX), Quest Diagnostics Inc. (DGX), Subway and The Allstate Corporation (ALL).
Notably, this family-focused property is Whitestone’s 6th asset in the Dallas/Ft. Worth market and 61st in the U.S. Additionally, the inclusion of this asset increased Whitestone’s footprint in Dallas/Ft. Worth metroplex to about 600,000 square feet.
This acquisition is a strategic fit for Whitestone given the strong demographics of the region and diverse tenant mix. Importantly, the company expects the buyout to be accretive to 2014 and 2015 funds from operations (FFO) per share, after interest costs, by 2 cents and 4 cents, respectively. This assumption is based on the current shares outstanding of Whitestone.
Moreover, the Dallas/Ft. Worth market is one of the flourishing markets of the U.S., with rising population and job growth figures. Hence, this off-market investment is expected to enhance Whitestone’s portfolio quality and pave the way for bottom-line growth.
Whitestone is scheduled to release its second-quarter 2014 results on Aug 5, after the closing bell. The Zacks Consensus Estimate for FFO for the quarter is pegged at 28 cents per share, representing a year-over-year growth of 9.62%.
Whitestone currently carries a Zacks Rank #3 (Hold).
Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
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