Whitestone Bolsters Its Austin Portfolio, Buys San Clemente
Shares of Whitestone REIT WSR closed 5.2% higher on May 8, 2025, at market close, after the retail REIT announced the acquisition of San Clemente, a restaurant-anchored retail center, spanning 31,832 square feet, in Davenport, Austin, TX, as investors cheered this purchase.
The move comes as part of the company's growth strategy to bolster its portfolio with the center's strong dynamics and its retailer relationships in the upscale neighborhoods it serves — Davenport Ranch, Westlake, Rob Roy and Barton Creek.
Located at the intersection along Loop 360, in the vicinity of the Apple and Tesla campuses and many other technology companies, San Clemente is the fifth addition to Whitestone's portfolio of neighborhood shopping centers in Texas's capital city, benefiting from strong inbound migration and a booming tech sector. The tenant roster includes names like Fresa's, a local Mexican specialty, which anchors the property, Iron Fitness, a training and fitness facility and Greenlake Energy, an energy technology company.
The center offers unique advantages, serving an affluent population with an average household income exceeding $280,000, strict development restrictions curbing oversupply and efficient connectivity, with more than 55,000 vehicles per day in support traffic.
According to Whitestone REIT COO, Christine Mastandrea, 'This center has all of the dynamics we look for, including strong surrounding schools, a community with a robust job market and upwardly mobile families and the potential to actively remerchandise the center.'
Whitestone REIT is a fully integrated real estate investment trust that acquires, owns, manages, develops and redevelops high-quality, internet-resistant neighborhood, community and lifestyle retail centers. Whitestone's properties are principally located in Austin, Dallas-Fort Worth, Houston, San Antonio, TX, and Phoenix, AZ.
The acquisition of San Clemente will boost its portfolio in line with its strategy of enhancing its asset base with properties enjoying a solid trade area. Strategically located within a three-mile radius of Pennybacker Bridge and Red Bud Trail, the center will benefit from the two main river crossings in the Austin area, which bound all the vehicles across the Colorado River to the Westlake Drive and Loop 360 thoroughfares. The upcoming Four Seasons development, with around 200 high-end residences, is also likely to drive strong footfall.
However, the market is witnessing a shift in retail shopping from brick-and-mortar stores to Internet sales. This is expected to adversely impact the market share for brick-and-mortar stores like WSR. Moreover, market uncertainties arising from policy shifts, economic volatility and anticipations of high inflation remain major concerns.
Over the past three months, shares of this Zacks Rank #4 (Sell) company have declined 7.6%, underperforming the industry's fall of 0.3%.
Image Source: Zacks Investment Research
Some better-ranked stocks from the broader REIT sector are Digital Realty Trust DLR and Cousins Properties CUZ, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Digital Realty Trust's 2025 FFO per share stands at $7.09, which indicates an increase of 5.7% from the year-ago quarter.
The Zacks Consensus Estimate for Cousins Properties' 2025 FFO per share is pegged at $2.79, which suggests year-over-year growth of 3.7%.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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This article originally published on Zacks Investment Research (zacks.com).
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