Google Inc (GOOG) Follows in the Footsteps of…McDonald’s Corporation (MCD)?

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It’s been said that McDonald’s Corporation (NYSE:MCD) is really a real-estate holding company that just happens to hawk a few burgers on the side. Whether your local Mickey D’s is a franchise operation or a company-owned location, McDonald’s itself likely owns the building and the land it stands on. The company puts a ton of effort into finding top-notch locations with all the right demographics, traffic patterns, and long-term viability. Sites are chosen as much for long-term resale value as for immediate burger-selling prospects.

McDonald's Corporation (NYSE:MCD)

McDonald’s has crushed its peers in the Dow Jones Industrial Average index over the long haul, largely thanks to its acumen in land selection and development. Fellow Dow component Wal-Mart Stores, Inc. (NYSE:WMT) is also keen on reaping cash value from its enormous real-estate holdings, and it has beaten the Dow by a similarly large margin. Non-Dow retailer Walgreen Company (NYSE:WAG) happily pays a large premium for corner lots, knowing that easy access makes for spectacular returns on the investment — and yes, that’s another tremendous market-beater:


McDonald’s data by YCharts.

Google Inc (NASDAQ:GOOG) may not seem like an obvious copycat of this strategy, but Big G is indeed ripping that page right out of the McDonald’s playbook.

You may have noticed when Google sank $1.9 billion into a 15-story city block in the Manhattan borough of Chelsea. That property was bought in 2010, while property values were still reeling from the impact of the real-estate-powered financial crisis of 2008. Google Inc (NASDAQ:GOOG) has spruced the area up with free Wi-Fi access for all, and it hopes to cultivate the site into a seriously valuable property over time.

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