NEW YORK, Oct 9 (Reuters) - MCB Real Estate has

sweetened its offer to acquire U.S. shopping center operator

Whitestone REIT ( WSR ) to $1.45 billion including debt,

according to a letter reviewed by Reuters on Wednesday.

The new offer from MCB would give shareholders of Whitestone

$15 per share in cash, representing a 14.5% premium to

Whitestone's share price on June 3 before MCB's earlier offer

was disclosed.

MCB, whose earlier $14-per-share offer was rebuffed by the

target, is Whitestone's third-largest shareholder, with a 9.4%

stake in the company. Whitestone's shares closed at $13.47 on

Tuesday.

"Our efforts to engage in constructive discussions have been

rebuffed to date, but we stand ready to complete due diligence

and execute a definitive agreement expeditiously and are

committed to seeing this through to completion," MCB co-founder

David Bramble said in the letter to Whitestone's board of

trustees.

"We ask our fellow shareholders to urge the Whitestone Board

to uphold their fiduciary duties and engage with us in good

faith without further delay."

MCB's interest in Whitestone comes at a time when retail

landlords have managed to pass on some of the recent bout of

inflation to tenants, benefiting owners like Whitestone.

During the quarter ended June 30, the company witnessed an

uptick in new leases, with revenues from such leases rising 34%

to $16.1 million.

Limited new construction of retail real estate has

contributed to the scramble for high-quality space. Vacancies at

U.S. shopping centers stood at 5.3% for the second quarter ended

June 30, according to commercial real estate services firm

Cushman & Wakefield, the lowest level since it started tracking

the data in 2007.

While Whitestone's shares have jumped 43% over the past 12

months, it is currently trading at a discount to most of its top

peers, according to an analysis of LSEG data. Whitestone trades

at a multiple of 14.82 times earnings before interest, taxes,

depreciation and amortization, compared with 21.19 times for

Acadia Realty Trust ( AKR ) and 17.73 times for Federal Realty

Investment Trust ( FRT ).

Baltimore, Maryland-based MCB has argued that Whitestone

lags larger public REITs because it is a regional player that is

hampered by high borrowing costs, making it challenging for the

company to raise new capital to fund acquisitions and develop

new properties.

MCB, which plans to fund its bid with a combination of

equity and debt, said it was confident of securing debt

financing for the proposed takeover from Wells Fargo, which is

advising MCB on its bid for Whitestone.

Founded in 2007, MCB is a privately held commercial real

estate developer that manages more than $3 billion in assets

across industrial, office, retail and multi-family properties.

Houston, Texas-based Whitestone operates shopping centers in

Texas and Arizona. Whitestone, which currently owns 57

properties with 5.1 million square feet of gross leasable area,

had total debt of about $667 million as of June 30. In its

latest quarter, Whitestone reported occupancy rates of 93.5%,

marginally up from the same period last year.

Earlier this year, Whitestone fended off pressure from

another shareholder Erez Asset Management, which launched a

proxy fight at the company, nominating two new candidates to its

board of trustees.

Last year, Bloomberg reported that Whitestone rebuffed a

takeover offer from Fortress Investment Group.