Whitestone REIT announced the acquisition of the grocery-anchored Garden Oaks Shopping Center in Houston. The center, which contains 107,000 leasable square feet and is 96% occupied, is in the pathway of significant development, both residential and commercial, and sits on a major thoroughfare in the area. The Aldi-anchored center has a mix of 19 service and convenience-based tenants, including a top performing Planet Fitness. Nearly 30,000 vehicles per day pass by on North Shepherd Drive.
“Garden Oaks property values are up nearly 50% since 2019, and the area is poised to continue with very strong growth as young professionals settle beyond the Heights area and take advantage of the larger plots and tree-lined streets in Garden Oaks,” said Whitestone REIT COO, Christine Mastandrea in a statement. “The center fits well with our strategy to own high quality centers that successfully serve the surrounding neighborhood.”
The acquisition is funded through Whitestone’s capital recycling efforts, focusing on portfolio improvement, through a disciplined capital recycling program that began in 2022 and now totals over $80 million in acquisitions. The program is anticipated to have sales equivalent to the total acquisition amount with 9 lower value creation potential centers sold to date and one anticipated sale in the first half of 2024. The 9 centers sold so far were sold at a combined capitalization rate of 5.9% based on trailing twelve-month NOI. Since the third quarter of 2022, Whitestone has acquired four high quality shopping centers, including Lake Woodlands Crossing, Dana Park Pad and Arcadia Towne Center.
“We are very pleased to add the Garden Oaks Shopping Center, which serves young, family-oriented professionals that live in the surrounding Garden Oaks Neighborhoods, to our portfolio. This acquisition will help drive Same Store Net Operating Income as we apply our expertise in curating the center and as the surrounding area continues its rapid development,” said Whitestone CEO, Dave Holeman.
The Houston market continues to have very favorable supply/demand fundamentals, driven by a strong job market and a limited supply of new neighborhood retail centers coming online.
