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Publix Buys Another Florida Shopping Center

As Shopping Center Owner, Grocer Can Control Tenant Mix, Not Bound to a Landlord, Brokers Say
December 21, 2017
Publix Super Markets is at it again, acquiring another Florida shopping center as part of a strategy that brokers say is designed to allow the grocery giant to control its own destiny.

The Lakeland, FL-based company paid $25.45 million, or about $322 per square foot, for the Publix-anchored Lakeview Shopping Center at 1300-1440 Coral Ridge Dr. in Coral Springs, FL. The seller was a firm tied to AEW Capital Management of Boston.

AEW bought the center in 2000 for $11.55 million, or $147 per square foot, according to CoStar data. The 79,060-square-foot center was built in 1995 and includes MetroPCS, H&R Block and a host of other small tenants.

Last month, Publix paid $47 million, or about $443 per square foot, for Mirasol Walk, another Florida neighborhood center at 6231-6271 PGA Blvd. in Palm Beach Gardens, according to CoStar data. The seller was TA Realty of Boston.

Publix has been on a buying spree in recent years to acquire centers anchored by its grocery stores. In some cases, the chain owns just the stores and leases the land.

Last year, Publix disclosed that it owned 331 of its 1,136 stores, according to its annual report filed with the Securities & Exchange Commission (SEC). Publix said it owned 288 stores in 2015 and 251 in 2014. The chain is expected to release its report for 2017 next spring.

While a Publix spokeswoman did not return a phone call or an email for comment, David Restainer, managing director of commercial real estate for Douglas Elliman in South Florida, told CoStar News that the strategy makes sense for a company that generated $34 billion in revenue last year.

Buying its shopping centers allows Publix to lock up desirable locations long term and manage the tenant mixes, he said.

"They control their own destiny," Restainer said. "They're not subject to the whims of a landlord. They have the balance sheet to do it."

At Publix's better-performing stores, the grocer is required under terms of the leases to pay additional rent based on a percentage of sales, said Rafael Romero, a vice president and retail specialist for CREC. In the past, Publix has moved to nearby sites to get out of unfavorable leases, but the company believes that owning the shopping centers is a better deal financially, he noted.

"By owning, their risk is substantially reduced," Romero said. "I don't see this stopping anytime soon."

Editor's Note: The news story was updated from an earlier version to provide new information on the Mirasol Walk sale in Palm Beach Gardens.

Paul Owers, South Florida Market Reporter  CoStar Group   
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