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Landlords Prefer Mergers to Liquidations

Although retail landlords realize that the Office Depot/OfficeMax deal will likely hit them where it hurts, with potentially hundreds of store closures, they view it as the best alternative for the troubled chains, according to an article in the Wall Street Journal. The reason? If the merger didn't happen, they would be anxiously looking for news of bankruptcies and liquidations--meaning even more store closures, within a shorter period of time.

According to the Journal:

Landlords see the benefits of a deal that would produce a stronger combined company.

"Both companies have had their issues, and we certainly think that a combination makes for a stronger business," said Drew Alexander, chief executive of Houston-based Weingarten Realty Investors, WRI +0.87% which counts 23 Office Depots and 11 OfficeMaxes in its 292 U.S. shopping centers. "We see this, on balance, as being a good thing for the industry and an opportunity for us."

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