Press Release

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Whitestone REIT Acquires Two Properties with Operating Partnership Units, Valued at $19.00 per Unit, Combined with Cash and Debt; The La Mirada and Seville Community Centers in Scottsdale, Arizona are an Expansion of the Company’s “Internet-Resistant” Business Model Portfolio

Houston, TX, October 3, 2016 – Whitestone REIT (NYSE: WSR) (“Whitestone” or the “Company”) today announced that it continues to expand its portfolio in the largest and fastest growing cities in the United States with acquisitions of La Mirada and Seville, two upscale retail centers located in Scottsdale, Arizona. In a recent Forbes article, Scottsdale was ranked third among cities that are winning the battle for information jobs and was cited among the top cities for growth in the information economy. The acquisitions bring the Company’s total holdings in the greater Phoenix metropolitan area to 27 community centered properties containing 2.3 million leasable square feet.

About La Mirada
La Mirada is located in North Scottsdale, with an average household income of $129,000 within a five-mile radius, and enhances Whitestone’s continued pricing power with concentrated ownership of four properties within a two-mile stretch along Pinnacle Peak Road, and eight properties overall, with a total of 857,000 square feet, within Scottsdale. The 147,209 square foot center is 90.9% occupied and includes tenants such as Walgreens, Starbucks, Mastro’s Steakhouse and Kumon Math & Reading, and is well positioned providing convenience and services to the community at the intersection of Pima and Pinnacle Peak Roads.

About Seville
Seville is part of the famed McCormick Ranch, one of the largest planned communities in Arizona, with an average household income of $97,000 within a five-mile radius. The property is located at Scottsdale Road and East Indian Bend Road, and across the intersection from the recently announced $2 billion Ritz-Carlton development, scheduled to be completed in 2018. Among the merchant mix of the 90,042 square foot, 88.7% leased center, are Starbucks, Beal Bank, Orange Theory Fitness and Ruth’s Chris Steak House.

La Mirada and Seville were acquired with a combined occupancy rate of 90.1% and an aggregate 7.0% in-place cash-on-cash return on the total purchase price. The acquisition is below replacement cost and is accretive to Funds from Operations and Funds from Operations per share. The existing occupancies and potential re-tenanting offer upside to Whitestone’s investment.

The two properties were acquired for a total purchase price of $72,500,000. The purchase was funded using 54% equity and 46% debt from the Company’s unsecured credit facility. The equity portion consisted of the issuance of 621,053 Operating Partnership Units (“OP units”) priced at $19.00 per unit and proceeds from sales of common shares under the Company’s ATM program.

The Company noted that the OP units will be redeemable, on a one-for-one basis, for cash at a value of one Whitestone common share or, at Whitestone’s election, Whitestone common shares, subject to certain restrictions. Like the Company’s common shares, the OP units currently receive an annual dividend of $1.14 per unit, which is paid in monthly increments. This is the second time that Whitestone has used OP units in the funding of an acquisition. In August 2015, the Company acquired Keller Place, and two developable land parcels, using a combination of cash and 120,000 OP units. In that acquisition, the OP units were also priced at $19.00 per unit.

Jim Mastandrea, Chairman and Chief Executive Officer, stated, “We are very pleased to be adding these two upscale properties to our greater Phoenix area portfolio. Both offer value-add potential and are complementary to our ‘internet-resistant’ Community Centered PropertyTM business model.”

Mr. Mastandrea concluded, “In addition to the properties’ strategic attributes, La Mirada and Seville will be immediately accretive to earnings, add to our cash flow, enhance our market concentration and ability to increase revenue and net operating growth and were funded using OP units priced at a value which we believe more closely aligns with the value of the Company than our current traded stock price.”

About Whitestone REIT
Whitestone REIT (NYSE: WSR) is a fully integrated real estate investment trust (“REIT”) that acquires, owns, manages, develops and redevelops high quality “internet-resistant” neighborhood, community and lifestyle retail centers. Whitestone’s 71 properties are principally located in Austin, Dallas-Fort Worth, Houston, San Antonio and Phoenix, which are among the fastest-growing markets in the country with highly educated workforces, high household incomes and strong job growth. The Company’s strategy is to target shifting consumer behavior and purchasing patterns by creating a complementary mix of grocery, dining, health and wellness, education, services, entertainment and specialty retail in its properties. Whitestone’s national, regional and local tenants provide daily necessities, needed services and convenience to the community which are not readily available online. For additional information about Whitestone, please visit www.whitestonereit.com.

Forward-Looking Statements
Statements included herein that state the Company’s or management’s intentions, hopes, beliefs, expectations or predictions of the future are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, which by their nature, involve known and unknown risks and uncertainties. The Company’s actual results, performance or achievements, including the impact of the acquisitions described herein, could differ materially from those expressed or implied by these statements. Reference is made to the Company’s regulatory filings with the Securities and Exchange Commission for information or factors that may impact the Company’s performance.

This release shall not constitute an offer to sell or a solicitation of an offer to buy any securities. The OP units referenced herein will not be registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

Contact Whitestone REIT:
Bob Aronson
Director of Investor Relations
D: (713) 435-2219; M: (832) 364-8314
raronson@whitestonereit.com

In Scottsdale, AZ? Your fast paced life deserves some decadence and glamour – 21 Cakes

A bakery that adheres to an overriding philosophy: if it’s edible, it must be made completely from scratch. Everyday.

21 Cakes specializes in one-of-a-kind, made-fresh-daily cupcakes, cakes, Parisian macarons, and on-site fresh roasted coffee. Conveniently located in The Scottsdale Seville shopping center in Scottsdale, Ariz., 21 Cakes’ elegant desserts are perfect for special occasions, a mid-week luncheon or a little indulgence, anytime.

Their newest creation: The Skini Cupcake – It is vanilla cake with chocolate filling and marshmallow cream frosting. It is about half the fat and calories of a regular cupcake. It will be offered in additonal flavors as well. And FYI…it does not conatin any artificial sweeteners! Perfect in time for your new years resolution of eating healthier! Have your cake and eat it too!

More about 21 Cakes:

Initially starting as a wholesale business, owner and baker Linda Schneider wanted to share her love of baking with a wider audience. 21 Cakes opened in August 2011 offering fresh desserts and pastries made daily. A perfectionist in her kitchen, Linda insists on using the highest quality ingredients from the United States and Europe, ensuring delectable, one-of-a-kind desserts, unmatched in the Scottsdale area.

To create their daily magic, Linda relies on family recipes that have been passed down from her grandmother; coupled with her professional training and her pastry chef’s professional training at Le Cordon Bleu in Scottsdale. Together, beautiful and delicious desserts are created that are a pleasure for the eyes and a sensation for the taste buds.

Linda’s specialty is her traditional Parisian macaron. Not to be confused with the coconut covered cookies by a similar name, Linda’s macarons are made from her time-tested traditional French recipe that took her over a year and hundreds of

macarons to perfect. They have been compared to the true Parisian macarons of France. The Parisian Macarons from 21 Cakes is a process that takes days to create, with the finished product only available from Thursday–Sunday, (if they last that long).

In addition to the retail store offerings, 21 Cakes creates custom occasion desserts, perfect for any wedding, anniversary, birthday, or special event. Whether a simple or elaborate design, only the freshest and finest ingredients go into each masterpiece. Customers are ensured that the pastry made for their event will not only be the most beautiful work of art, but also the most delicious anyone has tasted.

21 Cakes was named after the 21 Club in New York City, during the 1920’s Art Deco era, when life seemed to be more decadent and glamorous, and people appreciated the finer things. In today’s fast paced world, finding and experiencing glamor and decadence is harder to do. Luckily, people can add a little bit of luxury in their lives when they come to 21 Cakes and experience the delicious and beautiful works of art that are created there daily

THIS IREPORT IS PART OF AN ASSIGNMENT THAT WE CREATED WITH TRAVEL + LEISURE: 100 PLACES TO EAT LIKE A LOCAL
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