CINCINNATI-Phillips Edison & Co., based here, has gained two CMBS loans totaling $94.5 million for two shopping centers. The properties, Bridgewater Falls located here and Fort Smith Pavilion in Fort Smith, AR, are more than 95% leased.

Bridgewater, a 600,000-square-foot center, is anchored by Target, J.C. Penney and Dick’s Sporting Goods. Fort Smith Pavilion is 400,000 square feet in Fort Smith, AR, and is also anchored by Target and Dick’s. Phillips’ Strategic Investment Fund I purchased Bridgewater in 2009 and the Pavilion in 2010.

David Birdsall, SVP of the fund, tells GlobeSt.com that the properties leased well because of the quality tenants. “Lending is starting to thaw for quality properties,” he says. “However, the scrutiny on these loans was definitely CMBS 2.0, it was definitely strict underwriting.”

The fund gained 10-year, fixed-rate loans for the centers. “The loan proceeds allowed the fund to return 100% of the investors’ capital less than two years following the fund’s final capital call,” Birdsall says. He says the fund was formed in 2007 to capitalize on retail real estate opportunities created by the market downturn. Phillips also has Fund II, which is currently investing $57 million on retail properties.

Birdsall says the start of the year has brought some hope for the retail market, after a tough second half of 2010. “We’re optimistic, though people are subdued,” he says. “The consumer seems to feel better, unemployment is down and tenants are starting to lease, I suppose we don’t think the world is going to end. However, there’s still storm clouds, as the bad stuff isn’t yet all flushed out and the lack of political leadership has put a damper on the market.”