Tuesday, March 17, 2015

Publix buying up property across Florida

Publix Super Markets is buying Southwest Florida shopping centers, and it's not done yet.

The state's largest grocery-store chain has been purchasing more in recent years. It has ramped up its buys over the past year, and is looking to do more — setting aside $1.3 billion this year to buy more centers, build new stores and remodel others, according to a report that appeared Monday in the Sarasota Herald-Tribune.

The cash-rich company has become a major player in shopping center acquisitions, betting on revival of the commercial real estate market here and across Florida.

"Publix is buying all the centers that it wants to buy because their cost of capital is cheaper than the landlord's cost of capital, which makes their cost of occupancy less than market rent," Gary Tasman of Cushman & Wakefield Commercial Property Southwest Florida said last month.

Publix recently bought The Shops at Verandah on Palm Beach Boulevard in Fort Myers for $14.4 million.

Publix's acquisitions in recent years, according to Lee County Clerk of the Court records, include centers at 3015 SW Pine Island Road for $10,150,000 in December, and $13 million for The Shoppes at Fiddlesticks off Daniels Parkway in November 2012.

The recent purchases are a sign Publix is making a bet on the future strength of the real estate market here, Tasman said.

In the past year, the Lakeland-based grocer also acquired centers where it operates stores in Port Charlotte, Sarasota, Englewood, Parrish and Lakewood Ranch.

Publix now operates 1,098 stores, and about 20 percent sit in company-owned real estate, spokesman Brian West said.

"We're very fortunate to be in good financial health — no long-term debt and significant cash reserves, enough to allow us to invest in real estate when the situation makes sense," West said.

The company has owned centers where it operates stores for years, but it became a more aggressive buyer the past two years.

The privately owned company is coming off a great financial performance in 2014, one analysts said was especially impressive in light of competition from expanding rivals such as Trader Joe's, Whole Foods and Wal-Mart.

Publix had $30.6 billion in sales last year, a 5.7 percent increase from 2013.

The Sarasota Herald-Tribune and The Associated Press contributed to this report.

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