J.P. Morgan Real Estate Income Trust, Inc. Acquires Grocery-Anchored Retail Shopping Center in Queens, New York

Rhea-AI Summary

J.P. Morgan Real Estate Income Trust (JPMREIT) has acquired a 95% interest in Shops at Grand Avenue, a 99,837-square-foot, fully-leased, Class A grocery-anchored shopping center in Maspeth, Queens, NY. The acquisition, valued at $48 million, is part of a strategic joint venture with Acadia Realty Trust (NYSE: AKR). This deal boosts JPMREIT's portfolio to over $400 million and marks its first last-mile retail investment. The center, anchored by Stop & Shop, is situated in a dense residential area with nearly one million people within a three-mile radius. Doug Schwartz, Co-President of JPMREIT, emphasizes the investment's alignment with their 'New Economy' strategy, focusing on consumer proximity in densely populated areas.

Positive

• Acquisition of a fully-leased, Class A grocery-anchored shopping center.
• Investment valued at $48 million, enhancing the portfolio to over $400 million.
• First last-mile retail investment for JPMREIT.
• Located in a densely populated area with nearly one million residents within a three-mile radius.
• Strategic joint venture with Acadia Realty Trust (NYSE: AKR).

Negative

• High acquisition cost of $48 million.
• Potential market risks associated with retail investments in a post-pandemic environment.

Real Estate Analyst

J.P. Morgan Real Estate Income Trust, Inc.'s acquisition of the Shops at Grand Avenue is an intriguing move within the retail real estate sector. The type of property acquired, a grocery-anchored shopping center, holds inherent stability due to the consistent demand for grocery necessities, making it an attractive investment. The location in the Maspeth neighborhood of Queens, NY, further strengthens the asset's potential, given the dense population of roughly 1 million people within a three-mile radius. This demographic detail highlights the strong consumer base that can support sustained foot traffic and sales.

Additionally, the $48 million price tag, adding to a portfolio now valued at over $400 million, indicates a significant capital allocation towards strategically valuable assets. The choice to partner with Acadia Realty Trust, a known entity in retail REITs, alongside the mention of focusing on 'last-mile' retail strategies, suggests a thoughtful approach to capturing consumer demand in densely populated urban areas. The emphasis on 'last-mile' refers to the final segment of the supply chain, which is critical for prompt delivery and direct consumer access, aligning with current trends towards local and convenient shopping experiences.

This acquisition could potentially bolster J.P. Morgan Real Estate Income Trust's income stream and portfolio stability, but it also signifies a heavy reliance on the ongoing strength of the retail sector and consumer behavior in urban locales post-pandemic.

Financial Analyst

From a financial standpoint, this acquisition aligns with J.P. Morgan Real Estate Income Trust's broader strategy of investing in high-demand, stable assets. The $48 million purchase price for a Class A, 100% leased property indicates a strong valuation basis. Given that the total asset value of the JPMREIT portfolio now exceeds $400 million, this acquisition represents approximately 12% of their portfolio by value, underscoring its significance.

A grocery-anchored center, particularly one in a densely populated area, tends to generate reliable rental income due to the essential nature of its anchor tenant, Stop & Shop. This provides a steady cash flow, which is appealing for investors seeking consistent returns. However, investors should consider the broader market conditions. While retail real estate has shown resilience, especially in essential goods sectors, the overall retail landscape remains susceptible to economic shifts and changing consumer behaviors.

It is important to monitor how this acquisition impacts the REIT's financial performance over the coming quarters, particularly in terms of rental income, occupancy rates and any potential appreciation in property value. Furthermore, investors should keep an eye on the debt levels and financing terms used to acquire such properties to ensure that the portfolio remains financially healthy.

NEW YORK, May 16, 2024 /PRNewswire/ -- J.P. Morgan Real Estate Income Trust, Inc. (JPMREIT) announced today it acquired a 95% interest in Shops at Grand Avenue, a 99,837-square foot, 100% leased, Class A grocery–anchored shopping center in the Maspeth neighborhood of Queens, NY. This acquisition is part of a strategic joint venture to pursue retail opportunities with Acadia Realty Trust (NYSE: AKR), an equity real estate investment trust. The total purchase price was $48 million (exclusive of closing costs), bringing the total asset value of the JPMREIT portfolio to more than $400 million.

This investment represents the first last-mile retail investment for JPMREIT. The Shops at Grand Avenue is a neighborhood retail center anchored by Stop & Shop, a major supermarket. The property is located in the heart of a dense residential neighborhood with roughly one million people residing within a three-mile radius.

"Driven by a resilient consumer and the increasing importance of service consumption, the neighborhood shopping center sector continues to be a bright spot in commercial real estate. We believe our focus on assets close to the consumer in supply-constrained, densely populated areas is a valuable component of our last-mile retail strategy," said Doug Schwartz, Co-President of JPMREIT. "The Shops at Grand Avenue represents execution of our 'New Economy' strategy, which focuses on a post-pandemic perspective of consumption, housing and work."

For more information about this investment and other JPMREIT properties, please visit the Resources page on its website.

About JPMREIT

JPMREIT leverages J.P. Morgan Asset Management's more than 60 years of real estate investment experience and invests in stabilized, income-producing assets and development positioned to benefit from the way people live, work and consume in the new economy. JPMREIT is externally advised and sponsored by J.P. Morgan Investment Management Inc.

Forward-Looking Statements. This press release contains forward-looking statements about the business of JPMREIT. These forward-looking statements can be identified by the use of forward-looking terminology such as "expect," "continue," "may," "will," "should," "anticipate," "intend" or other similar words or the negatives thereof. These may include statements about plans, objectives, intentions and expectations with respect to JPMREIT's real estate investments and expected real estate acquisitions. Such forward-looking statements are inherently uncertain and there are or may be important factors that could cause actual outcomes or results to differ materially from those indicated in such statements. We believe these factors include but are not limited to those described under the section entitled "Risk Factors" in JPMREIT's annual report for the most recent fiscal year, and any such updated factors included in JPMREIT's periodic filings with the SEC, which are accessible on the SEC's website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in JPMREIT's public filings. Except as otherwise required by federal securities laws, JPMREIT undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities.

About J.P. Morgan Asset Management

J.P. Morgan Asset Management, with assets under management of $3.2 trillion as March 31, 2024, is a global leader in investment management. J.P. Morgan Asset Management's clients include institutions, retail investors and high-net-worth individuals in every major market throughout the world. J.P. Morgan Asset Management offers global investment management in equities, fixed income, real estate, hedge funds, private equity and liquidity. For more information: www.jpmorganassetmanagement.com. J.P. Morgan Asset Management is the marketing name for the asset management businesses of JPMorgan Chase & Co. and its affiliates worldwide.

JPMorgan Chase & Co. (NYSE: JPM) is a leading financial services firm based in the United States of America ("U.S."), with operations worldwide. JPMorgan Chase had $4.1 trillion in assets and $337 billion in stockholders' equity as of March 31, 2024. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. Under the J.P. Morgan and Chase brands, the Firm serves millions of customers in the U.S., and many of the world's most prominent corporate, institutional and government clients globally. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.

 

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SOURCE J.P. Morgan Asset Management

FAQ

What did JPMREIT acquire in May 2024?

JPMREIT acquired a 95% interest in Shops at Grand Avenue, a grocery-anchored retail shopping center in Queens, NY.

What is the significance of the Shops at Grand Avenue acquisition?

The acquisition represents JPMREIT's first last-mile retail investment and enhances its portfolio value to over $400 million.

Who is the joint venture partner with JPMREIT in the Shops at Grand Avenue acquisition?

The joint venture partner is Acadia Realty Trust (NYSE: AKR).

What is the total purchase price of the Shops at Grand Avenue?

The total purchase price is $48 million, exclusive of closing costs.

Where is the Shops at Grand Avenue located?

The Shops at Grand Avenue is located in the Maspeth neighborhood of Queens, New York.