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TPG JV to invest $250m in US strip malls

TPG is teaming up with a real estate investment trust in a new joint venture to invest in grocery-anchored shopping centers.

Private equity firm TPG’s real estate arm is investing in strip malls through a new joint venture, the Fort Worth, Texas-based firm said last week.

TPG Real Estate has formed a partnership with Phillips Edison Grocery Center REIT II, a Cincinnati, Ohio-based real estate investment trust, to invest $250 million in equity in value-added, grocery-anchored shopping centers across the US. The joint venture plans to initially acquire six such assets and buy more properties “located in fundamentally strong markets,” according to the announcement last week. Grocery-anchored shopping centers are an attractive investment because the assets are thought to perform non-cyclically and produce stable income, according to a February article from Urban Land Institute, a real estate industry group.

“We look forward to partnering with the Phillips Edison organization to create a scaled portfolio of grocery-anchored assets that will benefit from Phillips Edison’s operational expertise, as well as positive fundamental trends in the sector,” said Avi Banyasz, TPG’s co-head of real estate, said in a statement.

Phillips Edison Grocery Center REIT II is funded by Phillips Edison, a shopping center developer, and AR Capital, a real estate investment firm. Its latest publicly-disclosed transaction was the February purchase of a three-building shopping center in Denver, Colorado. The REIT bought the 144,000 square foot property for $34.2 million from Kensington Real Estate Group, according to real estate data provider Real Capital Analytics.

TPG has about $70 billion in assets under management, including about $7 billion managed by its real estate debt and equity platforms, according to last week’s statement.