CINCINNATI—As reported in GlobeSt.com, Phillips Edison Grocery Center REIT II, Inc. was one of the nation's most active retail buyers last year. In the first three quarters of 2014, the Cincinnati-based company snapped up 48 retail centers across the US with an aggregate price of about $765 million, and it recently acquired three more centers located in New Mexico, Kansas and Minnesota.
Phillips Edison typically focuses attention on secondary markets that it predicts will experience solid growth over the next few years. This keeps it out of the intense competition and lower returns found in the core markets. One of the new purchases, for example, is Crossroads of Shakopee, a 140,949-square-foot grocery store-anchored shopping center in Shakopee, MN, a suburb of Minneapolis.
The metro region has one of the strongest economies in the US, and according to a recent study by Marcus & Millichap, the retail market has really taken off. A new 105-store outlet mall in suburban Eagan was fully occupied before its August opening, M&M notes. “The robust tenant growth this year will allow operators to lift rents, improving NOI.”
“We're still focused on buying centers with the #1 or #2 grocers in the markets we go into,” Jeff Edison, chairman of the board and chief executive officer, told GlobeSt.com late last year. “We have a rigid system that we go through to buy these assets.”
The prices were not disclosed. The company was unable to provide any additional commentary at this time.
Cub Foods, the top grocer by market share in the Minneapolis metro area, anchors the Shakopee center. Crossroads of Shakopee also features national and regional tenants Great Clips, the UPS Store, Subway, One Main Financial, Papa Murphy's, Planet Fitness, and Mathnasium.
Plaza Farmington is a 140,803-square-foot center in Farmington, NM, the regional hub of the Four Corners region. Safeway, the number one grocer by market share in the area, anchors Plaza Farmington, which also hosts other national tenants such as Best Buy, Petco, and TJ Maxx.
Quivira Crossings is an 111,304-square-foot center in Overland Park, KS, a suburb of Kansas City, another region that has shown recent strength. Price Chopper anchors the center. Other national and regional tenants at the center include State Farm, Just for Hair, and Plato's Closet.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
