Whitestone REIT adds $50 million term loan, lowers pricing by 100 bps

By Susanna Moon

Chicago, Feb. 8 - Whitestone REIT's operating partnership, Whitestone REIT Operating Partnership, LP, amended its $125 million unsecured revolving credit facility, adding a $50 million term loan, easing financial covenants and reducing pricing by 100 basis points.

Interest on the loans is now Libor plus 200 bps, and the spread ranges from 175 bps to 250 bps based on the company's total deb to total asset value ratio.

The facility includes a $50 million accordion that allows the company to upsize the total size to $225 million.

The credit agreement will now mature in February 2017, with a one-year extension option. The facility was extended by two years.

Proceeds will be used for acquisitions, redevelopment of value-add properties in the company's portfolio and general corporate purposes.

The company amended the facility Monday with BMO Capital Markets and Wells Fargo Securities, LLC as co-lead arrangers and joint bookrunners, according to an 8-K filing with the Securities and Exchange Commission.

Bank of Montreal is administrative agent; Wells Fargo Bank, NA is syndication agent; and U.S. Bank NA is documentation agent.

The financial covenants were eased under new terms, including the capitalization rate to value assets, which provides the company with more financial flexibility, according to a company press release.

Whitestone REIT closed on the $125 million three-year revolver on Feb. 27, 2012 with BMO Capital Markets as the lead arranger and bookrunner.

Pricing at the time ranged from Libor plus 275 bps to 375 bps, based on leverage.

"While opportunistic financing activity remains a strategic focus, the new credit agreement provides us the ability to execute contracts and close quickly on value-add acquisitions as we continue to accelerate our growth," James C. Mastandrea, chairman and chief executive officer, said in the release.

Whitestone is a Houston-based real estate company that owns, operates and re-develops Community Centered Properties.

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