Whitestone REIT Buys Phoenix-Area Retail Center

April 11, 2024

The 70,000-square-foot property traded in an all-cash deal..

Whitestone REIT has purchased Scottsdale Commons, a 69,482-square-foot shopping center in Scottsdale, Ariz. C&H Development sold the asset for $22.2 million, according to CommercialEdge data.

CBRE’s Senior Vice President Joseph Compagno and Vice President Benjamin Farthing brokered the all-cash transaction, working for both parties. At the time of the sale, the property was 96.6 percent leased.

Scottsdale Commons last traded in 2007 when C&H Development acquired it for $17.6 million, CommercialEdge data shows. In 2015, the property became subject to a $15.1 million CMBS loan originated by Deutsche Bank, according to the same source.

The neighborhood center came online in 1980. The tenant roster at the retail center includes a diverse mix of retailers such as Rosati’s Chicago Pizza, Green Corner Mediterranean, The Diamond Vault, Rusty Nail Meats, U.S. Egg, Companion Pet Partners and BevMo.

The acquisition of Scottsdale Commons was funded through Whitestone’s capital recycling program, intended to improve the overall quality of its portfolio through targeted dispositions and the acquisition of greater long-term value properties. The program commenced in 2022 and has since amassed acquisitions exceeding $100 million in value.

Phoenix sustains a robust retail sector

Located at 7119 E. Shea Blvd., Scottsdale Commons is within Phoenix’s Scottsdale/Shea Corridor submarket. The shopping center is on the corner of the intersection of Scottsdale Road and Shea Boulevard, in an area with a daily traffic count of 107,557 vehicles, according to Whitestone. Scottsdale Commons serves more than 334,392 households within a 10-mile radius, with the average household income within a 3-mile radius of approximately $179,144.

Whitestone REIT currently owns 29 shopping centers throughout Scottsdale and Phoenix. The company has recently sold Mercado at Scottsdale Ranch, a 118,751-square-foot retail center in Scottsdale, Ariz., for $26.5 million.

The retail sector’s robust fundamentals have been sustained by Phoenix’s population growth. The metro ended last year strong, with 2.3 million square feet of retail space under construction, according to a recent Avison Young report. The high level of development in 2023 also contributed a total of nearly 1.5 million square feet of retail space delivered to the market.