CINCINNATI—The Phillips Edison-ARC Shopping Center REITInc. has been one of the most active buyers of shoppingcenters in the US. And in the second quarter, the Cincinnati-basedtrust kept up the speedy pace by purchasing 20 centers in 11 stateswith an aggregate price of $315 million. This tops the firstquarter, when the company picked up 17 centers across the US withan aggregate price of $285.7 million. Its long-term strategy hasbeen to assemble a portfolio of neighborhood and community shoppingcenters anchored by the #1 or #2 grocers in its targetedmarkets.

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The second quarter acquisitions expanded the REIT's presence inFlorida, Georgia, Kentucky, Pennsylvania, Virginia, South Carolinaand Texas. And it reached into the far west and New England byadding for the first time properties in Massachusetts, Nevada andWashington, as well as Tennessee.

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“Our strategy is to build a portfolio of assets diversified bygeography, grocery anchor, tenancy, creditworthiness and leaseexpirations,” Jeff Edison, chairman of the boardand chief executive officer, tells GlobeSt.com. “We have anin-house acquisitions team with national coverage that looks foropportunities in strong infill growth markets across the country.We continue to look for opportunities in the west and New Englandthat support our diversification strategy.”

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The purchases added about 2.1-million-square-feet to thecompany's portfolio, which now totals about12.6-million-square-feet of gross leasable area in 120grocery-anchored shopping centers with an aggregate purchase priceof over $1.8 billion.

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Phillips Edison & Company and ARCapital, LLC sponsor the company. And Edison says thatthey are currently raising equity for another non-traded REIT,called Phillips Edison-ARC Grocery Center REIT II.

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“Competition is definitely heating up for grocery-anchoredcenters in top coastal markets – the exchange traded REITs,institutions and foreign investors are the primary buyers ofcenters in those markets,” Edison adds. However, PhillipsEdison-ARC has “a contrarian approach to acquisitions, and focus onbuying quality assets in secondary markets. Rent growth in ourmarkets tracks and eventually outpaces the top 25 markets, and wecan acquire these assets at higher initial yields. The rent growthand higher initial yield factors combined with our ability to grownet operating income leads to overall better returns. We seetremendous opportunities in secondary markets, and the publiccompanies and other investors don't see that.”

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The second quarter acquisitions included: Kirkwood Market Place,anchored by Sprouts in Houston; Hampton Village,anchored by Publix in Taylors, SC; SouthwestMarketplace, anchored by Smith's Food and Drug inLas Vegas; Hamilton Village, anchored by WalmartSupercenter in Chattanooga; Waynesboro Plaza, anchored byMartin's in Waynesboro, VA; Fairview PlazaShopping Center, anchored by Giant in NewCumberland, PA; Townfair Center, anchored by GiantEagle in Indiana, PA; Cushing Plaza, anchored byShaw's in Cohasset, MA; Shaw's Plaza, anchored byShaw's in Easton, MA; Shaw's Plaza, anchored by Shaw's in Hanover,MA; Hannaford Bros. Plaza, anchored by Hannafordin Waltham, MA; Central Station, anchored byKroger in Louisville; Park View Square, anchoredby Winn-Dixie in Miramar, FL; St. John's Commons,anchored by Winn-Dixie in Jacksonville, FL; Deerwood Lake Commons,anchored by Publix in Jacksonville, FL; Orchards Shopping Center,anchored by Rosauers in Yakima, WA; LovejoyVillage, anchored by Kroger in Jonesboro, GA; Heath Brook Commons,anchored by Publix in Ocala, FL; West Creek Commons, anchored byPublix in Coconut Creek, FL; and Broadway Promenade, anchored byPublix in Sarasota, FL.

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Brian J. Rogal

Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.