Grocery Chains Buy Up Shopping Centers in a Defensive Play

As more grocery-anchored center owners decide to put their properties on the market to take advantage of strong investor demand, grocery chains are stepping in and claiming the centers they anchor to avoid risking the uncertainty of a new owner.

“In many cases, grocery chains have the first right of refusal when a property is for sale, and when they want to control their destiny, they’ll take advantage of the opportunity to purchase the center,” says Kris J. Cooper, managing director of capital markets in Jones Lang LaSalle’s Atlanta office.

The biggest grocery chains in the U.S. have invested nearly $450 million in grocery-anchored center purchases during the past 24 months, according to Real Capital Analytics (RCA), a New York City-based research firm. Lakeland, Fla.-based Publix, which operates 1,058 stores in five southeastern states, has been the most active buyer during this period. The chain spent $187.2 million to gain control of 17 grocery-anchored centers, making it one of the 10 most active buyers of this asset class. It owns roughly 170 of its stores overall in addition to some of shopping centers in which they’re located. Dutch conglomerate Ahold, which operates the Stop & Shop and Giant chains, during the same time also purchased 17 properties for $118.4 million.

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