Phillips Edison's $1B Transaction Creates Largest REIT Focused Solely On Grocery-Anchored Properties
Following a $1B deal, Phillips Edison has created the largest real estate investment trust focused exclusively on grocery-anchored shopping centers.
Phillips Edison Grocery Center REIT I was formed after the firm acquired the real estate assets and third-party asset management business of its former sponsor and external adviser, Phillips Edison Limited Partnership, for $1B. The transaction has since formed an internally managed, publicly registered, non-traded REIT with a total enterprise value worth roughly $4B.
Grocers have become increasingly important in the current retail environment. While mall operators have contended with the shuttering of big-box anchors and apparel companies going dark, grocery-anchored centers have performed significantly better and continue to experience demand from both tenants and investors.
“The acquisition of PELP marks a significant milestone in our evolution. This strategic acquisition allows us to benefit from one of retail real estate’s most comprehensive and successful operating platforms, which was built over the past two years. As such, we are now better able to capitalize on growth in the grocery-anchored shopping center industry by gaining scale through our portfolio, as well as our asset management business,” Phillips Edison Chairman and CEO Jeff Edison said in a release.
The new entity now has a portfolio of 235 shopping centers across 32 states, totaling 26.2M SF. Shareholders own approximately 80.6% of the REIT, while former PELP investors own approximately 19.4% of the combined company.