I’ve never been to a Publix but I spent a long time talking about the supermarket chain over the weekend with some friends from Florida. My interest was piqued by a story we wrote in Monday’s issue about a CMBS deal that refinances debt on a portfolio of assets owned by DDR. The deal was broken into three tranches, with a group of Publix-backed shopping centers in Florida expected to receive substantially higher pricing.
Our friends love Publix; it’s an institution in Florida and one of the things they miss most about living in New York. Intrigued, I turned a casual conversation into an interview. Is it like Whole Foods? What’s the lighting like? What about the aisles? Are there samples? What made you want to keep going back? Why do you miss it so much?
The answers were fascinating, particularly for someone who’s ordered her groceries online via FreshDirectfor more than 10 years. Don’t judge – it’s hard to schlep a week’s worth of groceries. And unless you live near Whole Foods or Trader Joe’s, even harder to find a grocery store that isn’t disgusting.
But I learned that Publix is more democratic than Whole Foods. Prices are lower but the quality is still very good. The aisles are super-wide. The carts work. It’s bright and clean, with a knowledgeable staff. Our friends would drive past Winn-Dixies and Stop N Shops for the Publix experience. There were always samples and a really good bakery and deli. It made me want to get on a plane and see it for myself.
The expectation that the Publix-backed CMBS tranches will see more investor demand made me think of another recent deal that had the sector’s first green tranche. The $72m tranche was tied to 85 Broad Street and was priced substantially tighter than similar bonds from the rest of the deal. Again, it’s a small data point. But sometimes small things effect bigger change.