In a strategic move aimed at bolstering its investment portfolio, Cohen & Steers Income Opportunities REIT, Inc. (“CNSREIT”) has joined forces with Phillips Edison & Company, Inc. (“PECO”) to acquire the Des Peres Corners shopping center in Des Peres, Missouri. This high-profile acquisition, valued at approximately $300 million, marks the inception of a programmatic joint venture in which CNSREIT holds an 80% stake and PECO a 20% share. The joint venture will target the acquisition of open-air, grocery-anchored shopping centers, capitalizing on PECO’s extensive industry expertise.

Major Shopping Center Acquisition

Des Peres Corners, a prominent grocery-anchored shopping center located at a prime intersection in Des Peres, Missouri, spans about 121,000 square feet. Built in 2009, this shopping hub is currently 90% occupied. It is anchored by a 74,000 square foot Schnucks grocery store, renowned as a leader in the St. Louis metro area with over 100 locations across the Midwest. The center also features a diverse mix of national and local retailers across various sectors, including medical, beauty, personal care, and food industries.

Strategic Partnership and Investment Goals

The Des Peres Corners acquisition underscores the strategic partnership between CNSREIT and PECO. James S. Corl, Chief Executive Officer of CNSREIT and Head of the Private Real Estate Group at Cohen & Steers, expressed enthusiasm about the joint venture, highlighting PECO’s proven track record in managing grocery-anchored shopping centers. Corl emphasized that the collaboration is expected to deliver significant value and superior returns for CNSREIT shareholders, thanks to PECO’s expertise and robust deal flow.

Jeff Edison, Chairman and Chief Executive Officer of Phillips Edison & Company, echoed Corl’s sentiments, noting that the joint venture enhances PECO’s access to growth capital and expands its acquisition opportunities. Edison anticipates that the partnership will yield attractive returns for both entities involved.

Growing Market and Investment Potential

Des Peres, a growing suburb of St. Louis, is noted for its affluent demographics, proximity to major employers, 30 colleges and universities, and a highly-rated local school system. The submarket is recognized for its robust retail occupancy rates, consistently outperforming regional and national averages. The local retail vacancy rate is at an all-time low, further enhancing the investment appeal of properties like Des Peres Corners.

CNSREIT’s acquisition strategy focuses on high-quality properties that offer promising income potential across the United States, particularly those anchored by essential retailers. Open-air shopping centers, such as Des Peres Corners, are currently experiencing their highest occupancy levels in 16 years, standing at 95.7%, according to data from CoStar Group.

Strategic Moves and Market Trends

Real estate experts suggest that CNSREIT’s partnership with PECO is a prudent move, aligning with current market trends favoring grocery-anchored shopping centers. The joint venture is positioned to leverage PECO’s expertise in the sector while capitalizing on the growing demand for essential retail spaces. The acquisition reflects a broader trend of institutional investors seeking stable, income-generating assets in the retail sector.

  Cohen & Steers Income Opportunities REIT, CoStar Group, Des Peres Corners, James S. Corl, Jeff Edison, Phillips Edison & Company, Schnucks, St. Louis