TH Real Estate Lends $175M on Phillips Edison’s Retail Portfolio



Phillips Edison & Company has scored $175 million in permanent financing for a portfolio of 16 outdoor shopping centers.

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The fixed-rate, nine-year mortgage loan comes from TH Real Estate, the property arm of investment manager Nuveen, according to an announcement from KeyBank, which arranged the financing. A representative from TH Real Estate declined to provide the interest rate.

The 16 properties, which add up to nearly 2 million square feet, are each anchored by a grocery store. Although the majority are concentrated in the southeastern United States, others are farther afield, including centers in Minnesota and California. Tenants occupy more than 98 percent of the available space across the portfolio.

Ted Norman, head of origination for TH, said that the shopping centers’ fundamentals made the deal a winning investment opportunity.

“The portfolio is predominantly well located in markets with strong demographics, and in high-traffic locations,” Norman said, adding that the malls are “primarily occupied by the dominant grocer in a given location.”

Some of the southern U.S. properties included in the portfolio include the Shoppes at Ardrey Kell in Charlotte, N.C., the Hamilton Village mall in Chattanooga, Tenn., and the West Creek Commons shopping center in Coconut Creek, Fla.

Elsewhere in the country, Phillips Edison has malls in coastal Massachusetts and western Pennsylvania. Walmart, Giant Eagle, and Cub Foods are among the tenants that anchor the shopping centers in the portfolio.

Norman said that while TH has its eye on Amazon’s encroachment into the supermarket business, his company isn’t immediately concerned.

“It’s too early to speculate fully on what the effect will be on the grocery industry,” he said. “We’re certainly watching that very closely—how it might impact the size of grocery stores [and] the number of grocery stores.”

Representatives from Phillips Edison and KeyBank did not respond to requests for comment.