IRVINE, CA—GlobeSt.com has learned exclusively that Phillips Edison & Co., an institutional investment firm that owns more than 36 million square feet of retail properties across the US, has sold seven retail properties totaling more than 800,000 square feet of space in secondary and tertiary markets. The total combined sales for the properties amounted to $38.3 million.
Hanley Investment Group represented the seller and secured buyers for all of the transactions. Buyers’ names were not revealed to GlobeSt.com. Properties sold were Alexandria Green Village in Alexandria, KY, a 207,606-square-foot grocery-anchored property that includes tenants Walmart, Sears, Dollar Tree and a local supermarket chain; Windsor Hills Center in Oklahoma City, a 194,477-square-foot grocery-anchored center including Crest Foods, Dollar Tree and DD’s Discounts; La Grande Town Center in La Grande, OR, a 131,857-square-foot property anchored by Rite Aid, Dollar Tree, Ace Hardware and Bealls department store; Beacon Heights in Madison GA, a 103,240-square-foot property featuring Goody’s, Dollar Tree and Goodwill; Lakeway Shopping Center in Truth or Consequences, NM, a 75,616-square-foot anchored center consisting of both local and national tenants including Verizon Wireless, Subway, Dollar General, Burke’s Outlet and Bealls; Cross Creek Shopping Center in Tupelo, MS, a 65,269-square-foot property anchored by Home Depot, Staples, PetSmart and Cracker Barrel; and Decatur Marketplace in Decatur, IL, a 22,775-square-foot property shadow-anchored by Walmart Supercenter.
According to Eric Wohl, EVP at HIG, “Due to HIG’s understanding of secondary and tertiary markets and our extensive national investor database, we were able to outperform the local market by procuring reputable buyers who were comfortable in the growth opportunities for each individual property. As yields for multi-tenant retail in primary markets continue to condense, we will see more investors seeking opportunities in smaller markets across the country to meet cash-flow requirements.”
Wohl tells GlobeSt.com, “Grocery-anchored centers continue to be one of the most desirable investments in the retail sector. Demand for these centers with strong grocer sales and a long lease term remaining is at an all-time high in both large and small markets across the country. We don’t see this demand dropping off in 2015 unless something unexpected happens to interest rates.”
After identifying an investor who acquired one of the western properties that HIG was selling on behalf of Phillips Edison, the firm introduced the buyer to other PE properties being offered in the Southeast and Midwest by outside brokers. This proactive approach resulted in a single buyer acquiring four more shopping centers from PE.
“There is a growing trend of investors looking to acquire quality anchored centers in secondary and tertiary markets due to higher yields and lack of product in infill major markets,” says Kevin Fryman, SVP at HIG. “As confidence in the retail investment market improves and lenders are willing to provide attractive financing into secondary markets, we are continuing to see demand increase into markets where there was very little velocity only a few years ago.”
As GlobeSt.com reported in December 2014, historic low interest rates, scarcity of product and record-high investor demand are some of the metrics fueling investor confidence, Hanley Investment Group’s president Edward B. Hanley told us exclusively. Hanley spoke with us fresh off the recent ICSC conference in New York about some of the retail trends he’s noticing and what he predicts will happen in this sector during 2015.