Publix paid a combined $83M for two Davie shopping centers where it is the anchor tenant.
Affiliates of PGIM Real Estate, the asset management arm of Prudential Financial, sold the shopping centers in southwest Broward County to the grocer, which has for years sought to buy shopping centers where it has a store.
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In the larger of the two deals, Publix paid $50.7M for the Davie Shopping Center at 4601-4777 S. University Drive. The 114K SF shopping center was built on 12 acres in 1979. Tenants include Baptist Health Urgent Care, Verizon, Amerant Bank and UPS.
Publix bought the property back from PGIM after having sold it for $11.5M in 2003, property records indicate.
The smaller sale saw Publix pay $32.3M for the Regency Square Shopping Plaza at 4801-4995 and 4997 SW 148th Ave. The 106K SF shopping center was built in 1991 and spans 14 acres.
Other tenants at Regency Square include Dairy Queen, Goodwill and Wunderbar German Kitchen & Biergarten. The sale is the first recorded for the property. Deed records compiled by property intelligence platform Vizzda confirmed the sales data.
Publix has 1,377 locations across eight Southeastern states — 870 in Florida — and employs more than 255,000 people.
The grocer has scooped up the shopping centers it occupies for at least the last decade. It paid $35M last month for a plaza it anchors in Chesterfield, Virginia, $59M in May for the 158K SF Ramblewood Square in Coral Springs, Florida, and $63M for shopping centers around the Tampa metro area in late 2023.
By purchasing its real estate, Publix not only eliminates rent payments but also gains control over the tenant mix at the properties.
Publix reported $14.5B in revenue for the quarter ending June 29, up 3.1% from the same period a year earlier. Same-store sales for the first half of 2024 were up 2%.
Investor demand for grocery-anchored shopping centers remained resilient during the pandemic, and the sector continues to draw capital. The stock price of Kimco Realty Corp., a REIT focused on grocery-anchored plazas, is up nearly 25% in the last year.
The U.S. retail market has largely bucked predictions of a collapse that was supposed to be driven by the adoption of e-commerce or shifting habits from the pandemic.
Leasing activity is at a five-year high, according to JLL, with overall vacancy at 4.1%. The neighborhood center vertical, typically anchored by a grocery store, had the highest year-over-year rent growth of any retail property at the end of the second quarter at 3.5%, according to CoStar data cited by JLL.
“Increasingly, we are seeing the focus turn toward strip centers, particularly from an investment perspective,” Keisha Virtue, senior analyst for retail research at JLL, wrote in the report.
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