Publix Taking Advantage of Commercial Real Estate Disaster

Until recently most all Publix shopping centers were owned by real estate investment trusts or private investor groups. With the glut of commercial real estate going belly up, Publix has two very attractive options.

First, they can purchase shopping centers from their landlords that are strapped for cash. And they can purchase at distressed prices.

Second, they can build their own shopping center and manage complimenting tenants accordingly.

Either way it is another Win-Win for Publix. In fact, Publix can issue bonds at 4-5% and build their own shopping centers, while most landlord REITs need 2-3 times that rate of return, and these REITs depend on Publix for the lion's share of that return.

Let's hope Publix continues to be a great corporate citizen with superb stores, excellent customer service and community involvement. Personally, I hope the community involvement gets cranked up a notch.

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