Phillips Edison Opts to Divide & Conquer

After a quarter century, the non-traded REIT sponsor is splitting into two companies to focus more closely on retail product categories.

In a major reorganization, Phillips Edison & Co. is separating its retail investment businesses into two.

A newly created unit, PECO Real Estate Partners, or PREP, will invest in a diversified portfolio ranging from single-tenant retail assets, power centers and lifestyle centers to enclosed malls and mixed-use retail projects. The firm’s grocery-anchored retail portfolio will continue to be handled under the Phillips Edison (PECO) name.

Jeff Edison, CEO & Principal of Phillips Edison & Co.

Jeff Edison, CEO & Principal of Phillips Edison & Co.

“Over the past 25 years, we have amassed an impressive collection of grocery-anchored shopping centers, power and lifestyle centers, enclosed malls and mixed-used retail projects,”  Jeff Edison, Phillips Edison’s principal & CEO, told Commercial Property Executive. “Because each asset type requires its own unique value creation strategy, we have been contemplating different ways to better focus and streamline our operations.”

Mike Phillips will serve as principal & CEO of PREP while Barry McGowan will be president. Jeff Edison remains PECO’s principal & CEO.

According to the spokesperson, establishing two strong, independent companies allows Phillips Edison to focus exclusively on its core competency, which is investing in grocery-anchored shopping centers, while also enabling the team at PECO Real Estate Partners to focus exclusively on enhancing the value of properties in its Strategic Investment and Net Lease Investment funds.

“This transaction better aligns our businesses by creating two strong, independent companies with distinct investment strategies, growth profiles and asset types,” Edison explained. “We strongly believe this change provides an enhanced level of focus that will benefit all our investors.”