Los Angeles-based CB Richard Ellis Investors has entered into a joint venture with Cincinnati-based Phillips Edison-ARC Shopping Center REIT to buy more than $200 million worth of retail centres anchored by grocery stores across the US.
According to documents that Phillips Edison filed with the US Securities and Exchange Commission, the REIT will contribute $52 million to the partnership and clients of CBRE Investors will contribute $50 million. The joint venture, known as PECO-ARC Institutional Joint Venture I, will borrow an additional $102 million to achieve total purchasing power of about $204 million.
The joint venture “intends to invest in necessity-based neighbourhood and community shopping centres with acquisition costs of no more than $20 million per property,” according to documents filed with the SEC. The documents added that the venture is seeking properties with “an annualised acquisition capitalisation rate of at least 7.25 percent and an occupancy rate of at least 80 percent, with no vacant primary anchor tenant at the time of acquisition.”
In fact, the joint venture already has begun making investments, acquiring three shopping centres recently picked up by Philips Edison. They include: St. Charles Plaza, a 65,000-square-foot shopping centre in Haines City, Florida; Lakeside Plaza, an 82,033-square-foot centre in Salem, Virginia; and Snow View Plaza Shopping Centre, a 100,460-square-foot centre in Parma, Ohio.
The venture follows CBRE Investors' recent closing of a second co-investment fund focused on multifamily development. In August, PERE learned that the fund, Wood Partners Co-Investment Venture 2, raised $165 million in equity commitments from a group of US institutional investors that include the Teacher Retirement System of Texas and the Ohio School Employees’ Retirement System.