The Amazon/Whole Foods Market Transaction: Implications & Impacts on REITs

What impact will Amazon’s Whole Food acquisition have on US consumer shopping habits and, as a result, should real estate investors modify their risk analyses for all retail investments?

Michelle K. Felman, Russell C. Platt  | Fall 2017
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Friday, June 16, 2017, began with a jolt to the US commercial real estate market when Amazon announced its acquisition of Whole Foods for $13.7 billion. Stock prices for Kroger, SuperValu, Publix, and discount stores like Costco and Target tumbled. Real estate equity experts jumped into action to analyze the deal. These experts considered what synergies the Amazon/Whole Foods Market combination would create and what impact the deal would have on consumer shopping habits, retail tenants, commercial real estate developers, and real estate investment trusts (REITs). How will this deal change the risk scenarios for all US retail investments? In this case, students are asked to consider the best course forward for real estate investors in the newly changed retail landscape.

Case ID: 180308
Supplemental Materials: Teaching Note

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