DISCIPLINED INVESTMENT APPROACH: THE MICRO MARKET
The Phillips Edison Acquisitions team sources deals nationwide through market expertise and industry relationships. The team executes detailed due diligence including on-site interviews with tenants, local municipalities and third party representatives, and also performs thorough financial reviews and property underwriting to evaluate risks, opportunities and achievable returns.
Primary focus on the three-mile trade area — the micro market — surrounding each shopping center with the following characteristics:
- Geographically diverse, growing markets
- Market-leading grocery anchor
- 70-80% national and regional creditworthy tenants
- Diversification by tenancy, industry and lease term
- Least susceptible to online competition
TRADE AREA SPECIFIC
- #1 or #2 grocer in market with favorable health ratio
- Walmart effect established
- Average population target of 55,000+ in three-mile radius
- Average HHI target of $65,000+
- Employment diversity
PROPERTY POWER SCORE*
*Proprietary scorecard that uses a series of algorithms to benchmark individual assets based on a defined set of characteristics including those features listed on this page.
- Proprietary algorithm based on scorecard that ranks over 40 property criteria, including:
- Grocer strength – sales, market share, health ratio**, lease term
- Functionality of site design
- Asset age/quality
- Access and visibility from main roads
- Tenant mix
**Health ratio is the amount of annual rent as a percentage of annual sales.