Retail landlord Whitestone REIT rebuffed an acquisition attempt by Fortress Investment Group, Bloomberg reports, citing anonymous sources.

Houston-based Whitestone's portfolio consists of about 5M SF of open-air shopping centers in Arizona, Texas and Illinois. Fortress has about $44.7B in assets under management. As of the end of the second quarter, the investor owned about 1.4% of Whitestone stock.

Terms of any potential offer remain unknown.

“Whitestone REIT does not comment on market rumors or speculation,” the REIT told Bisnow by email on Friday.

Fortress didn't immediately respond to an inquiry about the acquisition attempt.

Whitestone shares initially surged upward on the Bloomberg report but dropped 2.7% on Friday morning. Compared with a year ago, however, Whitestone stock is up about 5.2%. The firm had a market capitalization of $459M at Wednesday's market close.

Whitestone is in a legal tangle with Pillarstone REIT. Whitestone, which owns 81.4% of Pillarstone as a limited partner, is actively trying to exit that partnership, filing a lawsuit against Pillarstone to invalidate a "poison pill" provision preventing Whitestone from existing.

Whitestone CEO David Holeman previously told Bisnow that Pillarstone owns assets with Whitestone’s former CEO, James Mastandrea, who was fired early in 2022 and who has filed a wrongful termination suit against Whitestone.

Last month, Pillarstone received a default note on its loan for 4144 North Central Expressway in Dallas, which has $14.4M outstanding.

“We expect to record a gain if and when we redeem our Pillarstone OP units. Once we are able to monetize our Pillarstone OP units, the cash will be meaningful in significantly reducing our total debt and related interest expense,” Whitestone Chief Financial Officer Scott Hogan said during the company's August earnings call.