Phillips Edison, CBRE JV to Purchase $200M of Grocery Assets

Phillips Edison, a shopping-center REIT, and CB Richard Ellis have jointly invested $102 million in equity for the purchase of grocery-anchored shopping centers nationwide.

September 30, 2011
By Nicholas Ziegler, News Editor

Saying that “it’s a great time to be a buyer,” Jeffrey Edison, CEO of Phillips Edison – ARC Shopping Center REIT has navigated his company to invest approximately $102 million of equity to acquire $200 million in grocery-anchored shopping centers nationwide. The endeavor, in a joint venture with CB Richard Ellis, will see a near 50/50 equity split, with CBRE contributing $50 million and the REIT making up the remaining $52 million.

“Not only does this speak to our ability to strategically place and manage capital,” Mark Addy, COO for Phillips Edison, said, “but it also reflects the CBRE Global Multi Manager team’s support of our investment strategy, which is that shopping centers anchored by top-performing grocers provide stable long-term returns for investors. Since this joint venture allows us to pair our investors’ dollars with theirs, doubling our purchasing power immediately, we expect to be able to double the REIT’s portfolio by the end of the year.”

Grocery-anchored retail is expected to grow significantly by 2013, according to a report by Trepp. The research firm estimates that approximately $1.4 trillion on CRE debt expected to mature by 2013, and finding financing will be difficult.

“We are seeing a growing pipeline of quality centers coming to market, and this agreement with the CBRE Global Multi Manager group gives us more firepower to take advantage of these opportunities more quickly and on a larger scale,” Edison said.

This week alone has seen a huge uptick in interest for the grocery space. Regency Centers purchased the Tech Ridge Center in Austin, Tex.; DDR spent $85 million on two retail centers in Charlotte; and Saul is now the owner of three grocery-anchored shopping malls in the Washington, D.C., area for $168.5 million.