Jim and I spent several days in Salt Lake City reviewing both the Phillips Edison Companies and Cottonwood Residential Inc.  Many of you are familiar with Phillips Edison, which is the “PE” in the PECO I Grocery Store Anchored Shopping Center REIT (now closed to new investors) and the PECO II REIT Fund, which was recently approved for new investors.

American Realty Capital has a number of investments that it creates and self-manages, and it is also attempting to provide a platform for “best in class” managers of other types of portfolios.  The PECO Grocery Store REIT, which is jointly managed in Cincinnati and Salt Lake City, is the first of those offerings.  Since one of the “liquidity” possibilities for PECO I is a listing on the NYSE or NASDAQ, Jim and I wanted to meet the executives and managers who will continue to run the day-to-day operations of the investment.  We also wanted to hear from them about their “traded” REIT competitors, since that will form the basis of AOG setting a price expectation if PECO lists on an index.

We had similar discussions with the executives of Cottonwood Residential Inc.  Jim and I have known their principals for five years, and have been impressed with how they have built their company.  Many of the cost saving practices that ARC implemented over the last five years are incorporated in the Cottonwood structure.  As demand for apartment rentals has risen over the last five years, so has the price of the buildings.  It was important for Jim and me to understand their process for selecting new investments with the goal of producing a positive outcome for investors.

All in all it was a successful week.  It is always tough to keep up with office work while we are out on the road, but our team mates that stayed behind in Great Falls kept the trains on the track.  We have a very robust education schedule this spring, and hope to see you there or in client meetings to update you on all of our portfolio information.