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Phillips Edison Grocery Center REIT III Enters into Joint Venture with Northwestern Mutual

Phillips Edison Grocery Center REIT III Inc., a publicly registered non-traded real estate investment trust, has entered into a joint venture with Northwestern Mutual forming Grocery Retail Partners II (“GRP II”).

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Phillips Edison Grocery Center REIT III Inc., a publicly registered non-traded real estate investment trust, has entered into a joint venture with Northwestern Mutual to create Grocery Retail Partners II. Northwestern Mutual will invest in three high-quality, grocery-anchored shopping centers currently owned by PECO III across three states.

Under the terms of the joint venture, Northwestern Mutual will acquire a 90 percent interest in the three-center portfolio which is currently valued at $46.5 million. PECO III will maintain a 10 percent ownership in the portfolio while its sponsor and manager, Phillips Edison & Company, Inc., will provide asset management and property management services for the joint venture.

“Investing in grocery-anchored real estate alongside a well-respected institutional investor like Northwestern Mutual, which has over 150 years of commercial real estate experience, is a meaningful affirmation of the robust fundamentals in our sector,” commented Jeff Edison, chairman and chief executive officer of PECO III. “The capital provided by this joint venture gives us the ability to accelerate growth in our portfolio while we are still in the early stages of our development.”

Rob Francour, portfolio director of commercial real estate acquisitions at Northwestern Mutual added, “The advantages of the PECO III joint venture are two-fold: first, we have the opportunity to invest in well-located grocery-anchored real estate, and second, we gain access to PECO’s fully-integrated operating platform and their experienced management team. Together, we believe this venture will be mutually beneficial over the long-term.”

Holliday Fenoglio Fowler LP acted as exclusive financial advisor to PECO III for the joint venture.

Phillips Edison Grocery Center REIT III invests primarily in grocery-anchored neighborhood and community shopping centers leased to a mix of national and regional creditworthy retailers selling necessity-based goods and services in strong demographic markets throughout the United States.

The REIT’s registration statement for its initial public offering was declared effective by the Securities and Exchange Commission in May 2018. Griffin Capital Securities LLC serves as the dealer manager for the offering.

As of the second quarter of 2018, the company’s portfolio consists of four properties located in three states totaling 381,000 leasable square feet. According to the company’s prospectus, the properties were purchased for approximately $55 million using proceeds from a private placement offering that launched in October 2016 and raised a total of $57.8 million in investor equity.

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