Phillips Edison-ARC Buys Retail Trio

MIAMI—HFF is busy selling grocery-anchored shopping centers, just closing on a portfolio of three retail assets in Tallahassee, FL, Columbia, SC, and Houston. The commercial real estate properties are Kleinwood Center, Murray Landing, and Vineyard Shopping Center.

HFF marketed the portfolio on behalf of the seller, Charter Hall Retail REIT and Regency Centers Corporation. Phillips Edison-ARC Shopping Center REIT Inc. purchased the retail properties. These acquisitions bring the company's total portfolio to 37 properties with 14 leading grocers, in 16 states, with an aggregate purchase price of approximately $467.6 million.

The HFF investment sales team representing the seller was led by senior managing directors Brad Peterson in Orlando and Jim Batjer in Dallas. HFF managing directors Jim Hamilton in Atlanta and Ryan West in Houston also worked on the tri-state deal.

“As pricing in tier one markets has gotten ultra-aggressive we have seen more and more investors chasing best-in-class assets in secondary markets to find more yield,” Peterson tells GlobeSt.com. “The HEB & Publix Portfolio has all the characteristics that core retail investors are seeking: market-leading grocers, good sales and remaining lease term, strong population density and high income levels, so it makes sense that a greater number of investors are gravitating towards these type of deals.”

The portfolio has an average three-mile population of more than 67,000 residents with an average household income of nearly $104,000. Murray Landing is 100% occupied. Kleinwood Center is 92% occupied and Vineyard Shopping Center is 85% occupied.

“The scarcity of HEB and Publix offerings, coupled with desirable anchor lease terms and sales performance across the portfolio,” Peterson says, “presented Phillips Edison-ARC Shopping Center REIT Inc. with a rare opportunity to acquire three high-quality grocery anchored centers in a single transaction.”