Phillips Edison & Company, Inc., an internally managed real estate investment trust that invests in grocery-anchored shopping centers, has reportedly implemented a number of measures that it believes with help mitigate the negative financial and operational impact of the coronavirus (COVID-19) pandemic.
The company announced plans to suspended monthly distributions, share repurchases, and its distribution reinvestment plan, indicating that the suspensions will be temporary.
Phillips Edison & Company also reported that it borrowed $200 million on its $500 million revolving credit facility in order to increase its liquidity and meet its operating needs “for a sustained period.”
The company indicated that it has reduced expenses at both the property and corporate level, and that all capital projects are being delayed “to the extent possible.”
“Our neighborhood shopping centers are currently the lifeblood for many communities across the country and we are working with our grocers and other necessity-based neighbors to ensure they can effectively serve their customers,” said Jeff Edison, chairman and chief executive officer of PECO. “Across our portfolio, we have seen tremendous spikes in foot traffic and sales at our anchors, like Kroger, Publix, and Walmart, as the public has been stocking up on groceries and necessity-based products.”
“While our grocers are experiencing strong sales, over 20 percent of our [tenants] have temporarily closed to date and have been adversely impacted by social distancing and stay-at-home guidelines,” he added.
The company pointed out that compensation for its CEO and executive management team are incentive based, approximately 83 percent and 65 percent, respectively, and will be negatively impacted by these events.
Monthly distributions and the distribution reinvestment plan were suspended after the March 2020 distribution, and the company indicated that both will be paid in cash on April 1, 2020. The share repurchase program, including death, qualifying disability or determination of incompetence (DDI) requests, was also suspended.
Last year, Phillips Edison & Company announced plans to merge with Phillips Edison Grocery Center REIT III Inc., an affiliated non-traded REIT it co-sponsors with Griffin Capital Company. Phillips Edison Grocery Center REIT III shareholders approved the merger in November 2019.
Phillips Edison & Company Inc. (formerly known as Phillips Edison Grocery Center REIT I Inc.) is one of the nation’s largest owners and operators of grocery-anchored shopping centers. The company oversees a portfolio of 317 properties. The company’s offering was declared effective by the SEC in August 2010 and raised approximately $1.8 billion in investor equity before closing in February 2014.