19 May 2017
Reporter: Theo Andrew

Griffin Capital and Phillips Edison plans $1.7 billion non-traded REIT

Phillips Edison and Griffin Capital Company are set to launch Phillips Edison Grocery Centre Real Estate Investment Trust III, a $1.7 billion non-traded REIT.

A registration statement for the venture has been with the US Securities and Exchange Commission, offering $1.5 billion in Class T and Class I shares, valued at $10 and $9.15 per share, respectively.

In addition, Phillips Edison Grocery Centre REIT III will offer $200 million of Class A, I and T shares as part of its distribution reinvestment plan, valued at $9.40 per share.

The REIT will target shopping centres that are over 80 percent occupied, have a mix of regional and national tenants and which are anchored by a leading grocery provider in the region, according to the filing.

The fund raised $9.3 million from the sale of Class A shares in private transactions earlier in the month.

The venture follows a similar strategy enlisted by Phillips Edison Grocery Centre REIT I and II (PECO I and PECO II) which launched in 2010 and 2013, respectively.

As of December 2016, PECO I had acquired 155 shopping centres and had total real estate investment costs of $2.6 billion, while PECO II had acquired 80 shopping centres and with real estate investment costs of $1.6 billion.

Requirements mean the minimum permitted purchase of shares is $2,500, while investors must have a net worth of $250,000, or an annual salary of $70,000 and a net worth of at least $70,000.

Investors in certain areas will have to adhere to their own states suitability requirements.

PECO-Griffin REIT Advisor will be advising the on the venture, of which Phillips Edison owns 75 percent and Griffin Capital Company owns 25 percent.

Griffin Capital Securities will act as deal manager.

Both Griffin Capital Company and Phillips Edison have been approached for comment.

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