September 4, 2017

Phillips Edison Grocery Center REIT I, II End ARC Advisory Contracts

September 4, 2017 | James Sprow | Blue Vault

Phillips Edison Grocery Center REIT I Inc. and Phillips Edison Grocery Center REIT II Inc. terminated their contractual and economic ties with their respective external advisers, American Realty Capital II Advisors LLC and American Realty Capital PECO II Advisors LLC, on September 1.

On behalf of the companies, Phillips Edison LP paid $9.5 million and $6.0 million to AR Global Investments LLC as part of the terminations. In exchange, ARC II Advisors and ARC PECO II, together with their affiliates, agreed to sell all of their class B OP units to the operating partnership; to redeem all of their interests in Phillips Edison Special Limited Partner LLC and Phillips Edison Special Limited Partner II LLC; and to terminate their fee sharing arrangements with the companies’ advisers, Phillips Edison NTR LLC and Phillips Edison NTR II LLC.

Accordingly, Phillips Edison Grocery Center REIT I and II amended their operating partnership agreements to decrease by 15% the amount of class B units to be issued on a quarterly basis in line with services provided by the advisers, while also removing ARC II Advisors and ARC PECO II as limited partners. The companies also amended their advisory agreements with Phillips Edison NTR and Phillips Edison NTR II to reduce all fees payable to them by 15%.

Phillips Edison Grocery Center REIT I shareholders were set to vote September 20 on a proposal to internalize the company’s management.

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