Phillips Edison Entities to Join for $4B REIT

PECO I’s portfolio includes Butler’s Crossing, a Publix-anchored center in Watkinsville, GA.

CINCINNATI—Phillips Edison Grocery REIT I (PECO I) is acquiring the real estate assets and third-party asset management business of its sponsor to create a pure-play grocery-anchored center REIT with an enterprise value of $4 billion. The cash-and-stock deal for Phillips Edison Limited Partnership (PELP) is valued at approximately $1 billion, subject to closing adjustments. As part of the deal, PECO I will assume about $501 million of debt.

The REIT that results from the acquisition will own a nationally-diversified portfolio of 230 shopping centers in 32 states. PECO I says that on a pro forma basis, its funds from operation would have between 8% and 10% on a per share basis for the three months ended March 31, 2017, compared to actual results.