A Stealth IPO: Whitestone REIT (WSR)

The IPO market has not been so kind in 2010, and it has been far from predictable in general.  There is a stealth IPO this morning that is flying under the radar of most investors and it is a REIT.  Whitestone REIT (NYSE: WSR) is selling 2.2 million shares of its Class B common stock at $12.00 per share.  This $26.4 million in net proceeds is under what was supposed to be roughly 3.3 million shares and is under what was supposed to be a range of $14.00 to $16.00 per share.

Wunderlich Securities, Inc. is the lead underwriter; and Ladenburg Thalmann & Co., J.J.B. Hilliard, W.L. Lyons, Maxim Group, and Southwest Securities were listed as the co-managers of the deal.  These underwriters have been granted an option to purchase up to an additional 330,000 shares of Class B Common Shares to cover over allotments, if any.

USE OF FUNDS… the net proceeds will be used to:

• (1) acquire commercial properties in Whitestone’s target markets,
• (2) acquire loans with the intent to acquire the underlying property through foreclosure or deed in lieu of foreclosure within a short time,
• (3) to redevelop and re-tenant existing properties to create Whitestone-branded Community Centered Properties
• (4) for general corporate purposes.

Whitestone runs visibly located properties in established or developing culturally diverse neighborhoods. The company is based in Houston with a portfolio of commercial properties in Texas, Arizona, and Illinois.  Its most recent financial data is found here.

JON C. OGG