Cincinnati-based Phillips Edison & Company announced Monday that it has closed a new $350 million unsecured term loan facility, a financing move the grocery-anchored shopping center owner says extends its debt maturity profile and gives it more flexibility to fund its investment activity.
The term loan has a three-year term maturing October 23, 2029, and will initially bear interest at an annual rate of SOFR plus 0.80%, with future pricing subject to adjustment based on the company’s credit ratings and leverage ratio. Phillips Edison Grocery Center Operating Partnership I, L.P., a subsidiary of the company, is the borrower under the facility.
The company borrowed $175 million of the facility at closing, with the remaining $175 million available to draw on or before April 21, 2027. The loan also carries an uncommitted accordion feature allowing the borrower to take on up to an additional $450 million in term loans, for a total of up to $800 million.
Proceeds from the initial $175 million borrowing were used to pay down the borrower’s outstanding $161.8 million term loan, along with outstanding balances under its $1 billion revolving credit facility. The new loan can be prepaid at any time before maturity without premium or penalty.
“PECO continues to have one of the best balance sheets in the Shopping Center REIT sector, which positions us well for continued external growth,” said John Caulfield, the company’s Executive Vice President, Chief Financial Officer and Treasurer. “We appreciate the continued support of our banking partners. This attractively priced term loan extends our debt maturity profile and provides additional flexibility to match-fund our investment activity and execute our growth strategy.”
Phillips Edison, which trades on Nasdaq under the symbol PECO, describes itself as one of the nation’s largest owners and operators of high-quality, grocery-anchored neighborhood shopping centers. Its centers are typically anchored by grocery stores — the kind of everyday retail that keeps drawing foot traffic even as other shopping formats struggle.
For the Cincinnati region, the deal is another sign of a hometown real estate company financing growth from a position its leadership calls strength: cheaper, longer-dated debt, room to borrow more if acquisitions appear, and no prepayment penalty if conditions change.
The company did not announce specific acquisitions tied to the new facility. The remaining $175 million draw window runs through April 21, 2027, giving Phillips Edison a defined period to put the second half of the loan to work.
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