Jones Lang LaSalle Incorporated : Grocery-anchored retail portfolio in the Philadelphia MSA sells for $114.25M

PHILADELPHIA, July 9, 2021 -JLL Capital Markets announced today that it has closed the $114.25 million sale of and secured $80.5 million in acquisition financing for a five-property grocery-anchored retail portfolio throughout the greater Philadelphia metro area.

JLL marketed the portfolio on behalf of the seller, Brandolini Companies. Paramount Realty, in partnership with Medipower Group, purchased the assets. Additionally, working on behalf of the new owner, JLL placed five separate fixed-rate loans with three banks.

'We are excited to increase our footprint within the Philadelphia MSA and we look forward to adding value through capital improvements and procuring a new diverse tenant mix for existing vacancies to cater to the evolving new retail landscape,' said President of Paramount Realty, Maurice Zekaria.

The portfolio garnered significant interest from the investment world, particularly since each asset was anchored by high-performing grocers and a home improvement tenant (Giant, George's Market, ALDI and Lowe's), with increasing or stable historical sales. Other major highlights to the portfolio were long remaining lease terms of the anchor tenants, as well as long tenured small shop tenants with proven history of operations.

All properties are located within highly populated residential neighborhoods and engrained within the communities as destination real estate providing a combination of daily needs and e-commerce resistant businesses. Locations include:

• Lionville Shopping Center in Lionville (Giant anchored)
• Marketplace at Westtown in West Chester (Giant anchored)
• Spring Towne Center in Sinking Spring (Giant and Lowe's anchored)
• Dreshertown Plaza in Dresher (George's Marketplace anchored)
• Limerick Crossing in Limerick (ALDI anchored)

The JLL Capital Markets Investment Sales Advisory team that represented the seller was led by Senior Managing Directors Chris Munley and Jim Galbally, Senior Director Colin Behr and Associate James Graf.

'We continue to see a significant increase in demand for grocery-anchored shopping centers,' Galbally said. 'The investor interest for retail and, specifically, grocery-anchored shopping and dominant power centers has greatly increased in late 2020 and throughout 2021. It was a pleasure to work with both the Brandolini Companies, Paramount and Medipower on a successful transaction.'

'Investor demand within the Mid-Atlantic has grown both in quantity and diversity,' Munley added. 'Much of that interest is being generated from both alternative product-type owners as first-time retail buyers looking for yield, and/or out-of-market capital. With over 20 offers received on the portfolio, many from those segments of the investment community, it is clear to us that we will continue to see exceptional demand and yield compression in the grocery-anchored space.'

'The Philadelphia MSA continues to remain hyperactive in the retail sector,' Behr said. 'With 16 retail asset trades in the first half of 2021, we anticipate the second half of the year to be just as active as fresh capital enters the market.'

The JLL Capital Markets Debt Placement team that represented the new owner included Senior Managing Directors Jon Mikula and Jim Cadranell, Director Michael Pagniucci and Analyst Carlos Silva.

'To ensure the proper debt capitalization of this portfolio, the JLL team conducted a wide marketing campaign to a variety of lenders,' Cadranell said. 'Three regional banks provided the right combination of proceeds, rate and certainty of execution. It was a pleasure to represent two longtime clients of JLL.'

JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm's in-depth local market and global investor knowledge delivers the best-in-class solutions for clients - whether investment advisory, debt placement, equity placement or a recapitalization. The firm has more than 3,700 Capital Markets specialists worldwide with offices in nearly 50 countries.

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