MCB Real Estate, a major commercial real estate firm, has publicly proposed to acquire Whitestone REIT for $15.20 per share in an all-cash deal. The offer represents a significant premium over Whitestone's recent trading price and escalates pressure on the REIT's board of directors after a previous, lower offer was rejected last year.
As Whitestone's largest actively managed shareholder with a 9.2% stake, Baltimore-based MCB stated its intention to vote against the entire board at the next annual meeting if its offer is not considered. The firm argues that a sale is the best path to maximize value for all shareholders, citing Whitestone's persistent underperformance.
Key Takeaways
- MCB Real Estate has made a non-binding, all-cash offer to acquire Whitestone REIT for $15.20 per share.
- The proposal represents a 21% premium to Whitestone's share price as of November 3, 2025.
- MCB, which owns 9.2% of Whitestone, criticized the REIT's management for underperformance and value destruction.
- The firm has threatened to vote against the incumbent board of directors if they refuse to engage or explore a sale.
Details of the Acquisition Proposal
MCB Real Estate outlined its firm proposal in an open letter addressed to Whitestone REIT shareholders. The offer of $15.20 per share is a cash transaction with no financing contingency, signaling MCB's confidence in securing the necessary funds. According to the firm, the deal is backed by fully committed equity and a highly confident letter from financial institution Wells Fargo.
The proposed price marks a 21% premium to Whitestone's closing share price on November 3, 2025, and a 25% premium over the company's 30-day volume-weighted average price. MCB emphasized that this valuation is compelling, representing a multiple of 14.0 times the consensus next twelve months funds from operations (NTM FFO), which it claims would be the highest multiple paid in recent comparable strip center real estate transactions.
A History of Bids
This is not MCB's first attempt to acquire Whitestone. The firm previously proposed to buy the company for $15 per share in October 2024. At the time, Whitestone's board rejected the offer and declined to enter discussions, stating confidence in its own strategic plan to drive shareholder value. MCB contends that this plan has since failed to deliver on its promises.
Criticism of Whitestone's Performance
A central theme of MCB's letter is the alleged failure of Whitestone's current management and board to unlock the company's value. MCB, led by Managing Partner P. David Bramble, presented several data points to argue that the REIT has consistently underperformed its peers and the broader market.
"The performance of Whitestone's stock demonstrates that the Company's small capitalization and trading float, bloated G&A spending, limited growth prospects and weaker overall asset quality relative to peers...severely limit the Company's ability to close its valuation gap," the letter stated.
Since MCB's initial offer in June 2024, Whitestone shares have delivered a total shareholder return of just 1.8%. This figure significantly trails the average return of its peer group (+13.0%), the RMZ index (+15.9%), and the Russell 2000 index (+22.7%) over the same period.
Key Performance Metrics
MCB highlighted several industry-standard metrics to support its case for a change in control:
- Valuation Discount: Whitestone's NTM FFO multiple of 11.6x is below the peer average of 13.1x.
- Implied Cap Rate: The company's implied capitalization rate of 8.9% reflects a substantial discount to the peer average of 7.1%, suggesting the market values its assets less favorably.
- Growth Projections: Whitestone's guidance for Same Store Net Operating Income (NOI) growth for fiscal year 2025 is 4.00%, a decrease from the 5.10% achieved in 2024 and below the peer average guidance of 4.20%.
Shareholder Returns Since Last Offer
Since Whitestone's board rejected MCB's improved $15 per share offer on October 30, 2024, the company has delivered negative total shareholder returns of approximately -6.6%.
Pressure Mounts on Whitestone Board
With its public letter, MCB is moving from private negotiation to a public campaign aimed at fellow shareholders. The firm is urging them to demand that Whitestone's board either engage directly with MCB or initiate a formal strategic alternatives process, which would publicly solicit other acquisition proposals.
The explicit threat to vote against the entire board at the upcoming Annual Meeting of Shareholders represents a significant escalation. As the largest actively managed shareholder, MCB's vote carries substantial weight and could galvanize other dissatisfied investors to push for change.
In his letter, P. David Bramble expressed a preference for a collaborative approach but made it clear that MCB is prepared for a proxy fight.
"The Board has a narrow window now to do the right thing by meeting MCB at the negotiating table or entering into a public strategic alternatives process. We will continue engaging with our fellow shareholders to build support for change, and are committed to seeing this through to a successful conclusion that maximizes value for all shareholders."
MCB has retained Vinson & Elkins LLP as legal counsel, with Wells Fargo serving as financial advisor and Joele Frank, Wilkinson Brimmer Katcher providing strategic communications support. Whitestone REIT has not yet issued a public response to the new proposal.
