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Grocery-Anchored Real Estate

CHARACTERISTICS OF GROCERY-ANCHORED SHOPPING CENTERS

There are few things in life as habitual as grocery shopping. In a time when on-demand shopping services, free shipping and other emerging trends are changing the face of retail commercial real estate, grocery stores and supermarkets are still as relevant as ever.
 
Phillips Edison Grocery Center REIT III invests primarily in grocery-anchored shopping centers, taking full advantage of the stability and demand powered by the supermarket anchor, being necessity-based, and the growth opportunity provided by the national, regional and local small shop tenants. We believe this blend of consistency and opportunity is market resilient and will endure recessions and disruptions.

 

NECESSITY-BASED1

  • Most common purchases are perishable items: milk, bananas, bread
  • Avg. customer trips/week = 1.5

HIGH TRAFFIC

  • 18,000 avg. total trips per week

CONVENIENT5

  • Proximity to home is important
  • Most grocery shopping within 4 miles of home

E-COMMERCE RESISTANT3

  • Most common grocery items not conducive to internet shopping
  • Online = approximately 1% of total food sales
  • Projected category growth by 2018 represents 1-3% of total food sales

RECESSION RESILIENT4

  • $650 billion industry
  • Employs 3.4 million people in the U.S.
  • Grocery sales have proven resilient in recessions (e.g. people eat at home more often vs. dining out)

STABILITY AND GROWTH

  • Grocery anchor powers demand
  • Retailers want to be near top grocers
  • Small shop tenants provide income, diversity and growth
SOURCES:
  1. International Council of Shopping Centers Research and CoStar Realty Information, Inc., June 2016, U.S. Square Footage. 
  2. Food Marketing Institute, Supermarket Facts.
  3. Business Intelligence Insider.
  4. Progressive Grocer’s 80th and 83rd Annual Reports.
  5. USDA, Economic Research Service

THE GROCERY-ANCHORED MODEL

Grocery-anchored properties have a unique advantage in the market. In these properties, the grocery anchor provides reliable income stability, while the small shop tenants drive income growth. The rental income from this diversified tenant base at each center, combined with effective property operations to reduce expenses and generate additional revenue streams, enable us to deliver on our shareholders’ goals. 

grocery-anchored shopping center benefits infographic

THIS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES DESCRIBED HEREIN. AN OFFERING IS MADE ONLY BY THE PROSPECTUS. THIS SALES AND ADVERTISING LITERATURE MUST BE READ IN CONJUNCTION WITH THE PROSPECTUS IN ORDER TO UNDERSTAND FULLY ALL OF THE IMPLICATIONS AND RISKS OF THE OFFERING OF SECURITIES TO WHICH IT RELATES. A COPY OF THE PROSPECTUS MUST BE MADE AVAILABLE TO YOU IN CONNECTION WITH THIS OFFERING. NO OFFERING IS MADE TO NEW YORK RESIDENTS EXCEPT BY A PROSPECTUS FILED WITH THE DEPARTMENT OF LAW OF THE STATE OF NEW YORK. NEITHER THE SECURITIES AND EXCHANGE COMMISSION, THE ATTORNEY GENERAL OF THE STATE OF NEW YORK NOR ANY OTHER STATE SECURITIES REGULATOR HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THE PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. AN INVESTMENT IN PHILLIPS EDISON GROCERY CENTER REIT III, INC. INVOLVES A HIGH DEGREE OF RISK AND THERE CAN BE NO ASSURANCE THAT THE INVESTMENT OBJECTIVES OF THIS PROGRAM WILL BE ATTAINED.

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