SAFEWAY (Albertsons Companies, Inc Guaranty)

Transcription

1 SAFEWAY (Albertsons Companies, Inc Guaranty) OFFERING MEMORANDUM ACTUAL PROPERTY Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Z

2 Financial Overview OFFERING SUMMARY PRICE $18,533,000 CAP RATE 5.50% NOI $1,004,250 PRICE PER SQUARE FOOT $ RENT PER SQUARE FOOT $22.15 YEAR BUILT 2008 APPROXIMATE LOT SIZE 3.54 Acres GROSS LEASEABLE AREA 45,338 PARKING SPACES 280 TYPE OF OWNERSHIP LEASE GUARANTOR LEASE TYPE ROOF AND STRUCTURE LEASE SUMMARY Fee Simple LEASE COMMENCEMENT DATE 11/1/2017 Albertsons Companies, Incorporated (Inc) Absolute-Net Tenant Responsible LEASE EXPIRATION DATE 10/31/2037 LEASE TERM TERM REMAINING INCREASES OPTIONS TO RENEW 20 Years 20 Years 1.5% Years 2-5, 7.5% Every 5 Starting Year 11 8, 5-Year FIRST RIGHT OF REFUSAL Yes - Commencing in Year 5 PRIMARY TERM Lease Year Increase Monthly Rent Annual Rent 11/1/ /31/ $83,688 $1,004,250 11/1/ /31/ % $84,943 $1,019,314 11/1/ /31/ % $86,217 $1,034,603 11/1/ /31/ % $87,510 $1,050,123 11/1/ /31/ % $88,823 $1,065,874 11/1/ /31/ $88,823 $1,065,874 11/1/ /31/ $88,823 $1,065,874 11/1/ /31/ $88,823 $1,065,874 11/1/ /31/ $88,823 $1,065,874 11/1/ /31/ $88,823 $1,065,874 11/1/ /31/ % $95,485 $1,145,815 11/1/ /31/ $95,485 $1,145,815 11/1/ /31/ $95,485 $1,145,815 11/1/ /31/ $95,485 $1,145,815 11/1/ /31/ $95,485 $1,145,815 11/1/ /31/ % $102,646 $1,231,751 11/1/ /31/ $102,646 $1,231,751 11/1/ /31/ $102,646 $1,231,751 11/1/ /31/ $102,646 $1,231,751 11/1/ /31/ $102,646 $1,231,751 OPTIONS Lease Years Increase Monthly Rent Annual Rent 11/1/ /31/ % $110,344 $1,324,132 11/1/ /31/ % $118,620 $1,423,442 11/1/ /31/ % $127,517 $1,530,200 11/1/ /31/ % $137,080 $1,644,966 11/1/ /31/ % $147,361 $1,768,338 11/1/ /31/2067 TBD FMV/12 FMV 11/1/ /31/2072 TBD FMV/12 FMV 11/1/ /31/2077 TBD FMV/12 FMV Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Z

3 Investment Overview Marcus & Millichap is pleased to present this Safeway supermarket in Arnold, Maryland; which is just five miles from Annapolis. Safeway is operating under a 20-year absolute-net lease with zero landlord responsibilities. There are 1.50 percent annual rent increases in years two through five, and 7.50 percent rent increases every five years beginning in year 11. The lease is backed by a corporate guaranty from Albertsons Companies, Incorporated (Inc), who registered more than $60 billion in revenue across 2,324 supermarkets nationwide. The subject property is situated at the signalized, hard corner intersection of Governor Ritchie Highway/Route-2 and Arnold Road. More than 67,000 vehicles pass through this intersection daily. Governor Ritchie Highway/Route-2 is the main thoroughfare through Arnold, which provides direct access to both Annapolis and Baltimore. Safeway has been operating at this location for nearly a decade. The tenant reports strong unit level performance with high sales per square foot and a low rent-to-sales ratio; contact the listing broker for more information. This asset also benefits from affluent demographics. The average household income in the one-mile radius is more than $146,900 and more than $123,800 in the five-mile radius. Additional tenants in the immediate vicinity include: CVS, McDonald s, Exxon, Branch Banking & Trust (BB&T), TD Bank, Subway, 84 Lumber, BMW of Annapolis, Mini Cooper of Annapolis, and many more. Safeway Supermarket in Arnold, Maryland Five Miles from Annapolis Brand New 20-Year Absolute-Net Lease Zero Landlord Responsibilities Strong Rent Increases 1.50 Percent Annual Increases in Years Two Through Five 7.50 Percent Rent Increases Every Five Years Beginning in Year 11 Corporate Guaranty Albertsons Companies, Incorporated (Inc) Number 49 on June 2017 Fortune 500 List Number Three on June 2017 Forbes America s Largest Private Companies Healthy Unit Level Financials Low Rent-to-Sales Tenant Reports High Sales Per Square Foot Contact Listing Broker for Details Signalized, Hard Corner Intersection of Governor Ritchie Highway/Route-2 and Arnold Road More Than 67,00 Vehicles Per Day (VPD) Direct Access to Annapolis and Baltimore Affluent Demographics Average Household Income is Greater Than $146,900 in the One- Mile Radius $123,800 in the Five-Mile Radius Additional Tenants in the Immediate Vicinity Include: CVS, McDonald s, Exxon, Branch Banking & Trust (BB&T), TD Bank, Subway, 84 Lumber, BMW of Annapolis, Mini Cooper of Annapolis, and Many More ACTUAL PROPERTY Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Z

4 Tenant Overview - SAFEWAY In 1915, M.B. Skaggs, an ambitious young man in the small town of American Falls, Idaho, purchased a tiny grocery store from his father. M.B. s business strategy, to give his customers value and to expand by keeping a narrow profit margin, proved spectacularly successful. By 1926 he was opening 428 Skaggs stores in 10 states. M.B. doubled the size of his business in 1926, when he merged his company with 322 Safeway (formerly Selig) stores and formed Safeway, Incorporated (Inc). M.B. Skagg s value vision still drives Safeway today, though on a dramatically larger scale. In January 2015, Safeway merged with Albertsons, creating one of the largest food and drug retailers in the country. With Safeway stores in 19 states, the Safeway team is proud to carry on the tradition that M.B. Skaggs began nearly 100 years ago in American Falls, Idaho. Albertsons is one of the largest food and drug retailers in the United States with a strong local presence, but on a national scale. As of February 25, 2017, the company operated 2,324 stores across 35 states and the District of Columbia under 20 wellknown banners, including Albertsons, Safeway, Vons, Jewel-Osco, Shaw s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Carrs and Haggen. Albertsons operates in 122 Metropolitan Statistical Areas (MSAs) in the United States. The company is ranked number one or number two by market share in 66 percent of those Metropolitan Statistical Areas (MSAs). Albertsons focuses on providing their customers with a service-oriented shopping experience, including convenient and value-added services through 1,786 pharmacies, 1,227 in-store branded coffee shops, and 385 adjacent fuel centers. The company employs nearly 273,000 talented and dedicated employees serving on average 34 million customers each week. TENANT PROFILE TENANT TRADE NAME Safeway OWNERSHIP Private TENANT New Albertson s, Incorporated (INC.) LEASE GUARANTOR Albertsons Companies, Incorporated (Inc) NUMBER OF LOCATIONS 2,324 HEADQUARTERED Boise, Idaho WEB SITE SALES VOLUME $59.7 Billion (2016) RANK #49 on Fortune 500 (2017), #3 Forbes America s Largest Private Companies ACTUAL PROPERTY Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Z

5 Albertsons Companies, Inc COMPANY HIGHLIGHTS Founded in 1939 and based in Boise, Idaho, Albertsons Companies, Inc ( Albertsons, or the Company ) is the 2nd largest traditional grocer in the United States serving over 34 million customers per week and generating $60 billion in sales annually. In January 2015, Albertsons merged with Safeway, creating a best-in-class organization dedicated to bringing a better shopping experience to customers across the country. The Company s powerful combination of strong local presence and national scale, vast range of brands and products, and service-oriented staff enable them to meet evolving shopping preferences. As of June 2017, the Company operated 2,329 stores across 35 states under 20 well-known banners with long operating histories. Albertsons has grown strategically through a series of strategic acquisitions in recent years into a $2.8 billion adjusted EBITDA company as of fiscal year 2016 ended February 25, 2017, and as of Q the Company had already generated $771.7 million in adjusted EBITDA. 2 nd largest traditional grocer in the US 2,300+ retail stores Operates in 35 states including Washington, DC $59.7 billion annual sales 34 million customers per week #1 / #2 #1 / #2 By market share in 66% of the 122 MSAs in which it operates $ $2.8 billion adj. EBITDA in FY new items launched every year Ex perienced management with 32 years in retail on average Currently ex ecuting $800 million synergy realization plan 4 th largest e-commerce platform in the US Home delivery in 8 of top 10 US markets by end of FY 2017 One of the largest retail employers 273,000 jobs 1,700+ in-store pharmacies 380+ fuel stations 28 distribution centers 18 food and beverage plants Nation s largest brand of USDA-certified organic products COMPANY BANNERS ACTUAL PROPERTY Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Z

6 Albertsons Credit Profile COMPETITIVE LANDSCAPE Albertsons Companies, Inc is one of the largest food retailers and the second largest traditional grocers in the United States. Note: Store counts based on publically available information ACTUAL Walmart, PROPERTY Costco, and Traget grocerysales based on a percentage of total sales as of the latest fiscal year. Kroger and Albertsons sales exclude fuel sales of ~$14 billion and ~$3 billion, respectively ACTUAL PROPERTY Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Z

7 Safeway Brand New 20-Year Absolute-Net Lease Zero Landlord Responsibilities Healthy Unit Level Financials Low Rent-to-Sales Tenant Reports High Sales Per Square Foot Signalized, Hard Corner Intersection of Governor Ritchie Highway/Route-2 and Arnold Road More Than 67,00 Vehicles Per Day (VPD) Affluent Demographics Average Household Income is Greater Than $146,900 in the One-Mile Radius Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Z

8 Aerial Overview Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Z

9 Area Overview & Demographics 174 Fort Meade Pasadena 100 Jacobsville MILE RADIUS 32 Odenton 2 32 Gambrills Arden-On-The-Severn Severna Park 3 MILE RADIUS Gibson Island Herald Harbor Crofton 97 Crownsville SITE Sherwood Forest The Downs 1 MILE 2 Manresa Woods Landing Cape St Claire Whitehall Manor Skidmore Parole Annapolis 50 Stevensville Chester Riva Donovans Riva Edgewater Londontowne Hillsmere Shores Kent Island 1-Mile 3-Mile 5-Mile Population 2000 Population 3,570 43, , Population 3,648 44, , Population 3,867 45, , Population 3,648 44, ,851 1-Mile 3-Mile 5-Mile Households 2000 Households 1,191 15,009 39, Households 1,243 15,735 42, Households 1,316 15,960 43, Households 1,363 16,404 45,339 1-Mile 3-Mile 5-Mile Household (HH) Incomes 2017 Average HH Income $146,913 $128,566 $123, Median HH Income $124,691 $106,526 $101, Per Capita Income $49,997 $45,087 $46,144 Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Z

10 Market Overview - Arnold/Annapolis Arnold is a suburb of Annapolis, located on the scenic Broadneck peninsula. The city contains many scenic riversides with cliffs and beaches, providing plenty of places for leisure and sightseeing. There are 12 marinas in Arnold. Arnold Park hosts a playground and provides open ball fields for sporting. Additionally, Arnold Park is home to the Wilmer Stone White Oak, Maryland s State Tree. Annapolis served as the seat of the Confederation Congress and was temporarily the national capital from General George Washington came before the body in the Maryland State House and resigned his commission as commander of the Continental Army. A month later, the Congress ratified the Treaty of Paris of 1783, ending the American Revolutionary War, with Great Britain recognizing the independence of the United States. Today, Annapolis is Maryland s State Capital and home of Saint John s College, founded 1696, as well as the United States (US) Naval Academy, established Downtown Annapolis is famous for its historic inns and scenic streets. Along those streets are some of the finest restaurants the region has to offer. Maryland Avenue is long-treasured as one of downtown Annapolis best spots for shopping, dining, and experiencing the culture. Eastport in Annapolis is a place unto itself, with yachts, art galleries, residents, spas, and restaurants. The bridge into Eastport takes travelers from downtown Annapolis into the neighborhood. Additionally, the Annapolis Towne Centre is a consumer-utopia, featuring an assortment of restaurants, shops and more, all in one convenient location. Home to the United States (US) Naval Academy, Naptown is influenced by the military and collegiate traditions that come with having a major military and world class academic institution within the city boundaries. As the undergraduate college of the country s naval service, the Naval Academy prepares young men and women to become professional officers of competence, character, and compassion in the United States (US) Navy and Marine Corps. Naval Academy students are midshipmen on active duty in the United States (US) Navy. They attend the academy for four years, graduating with bachelor of science degrees and commissions as ensigns in the Navy or second lieutenants in the Marine Corps. Naval Academy graduates serve at least five years in the Navy or Marine Corps. From Commissioning Week, to home sporting events including Navy Football, to class reunions that sprinkle the weekends throughout the calendar, Annapolis is never too far from Navy s influence. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Z

11 Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows: The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided. As the Buyer of a net leased property, it is the Buyer s responsibility to independently confirm the accuracy and completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer. Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. The value of a net leased property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors. Buyer and Buyer s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to determine to your satisfaction with the suitability of the property for your needs. Like all real estate investments, this investment carries significant risks. Buyer and Buyer s legal and financial advisors must request and carefully review all legal and financial documents related to the property and tenant. While the tenant s past performance at this or other locations is an important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on a tenant s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in part or in whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his/her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating a replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant considering the location of the property, and Buyer s legal ability to make alternate use of the property. By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this net leased property.

12 SAFEWAY (Albertsons Companies, Inc Guaranty) Broker of Record Bryn Merrey 7200 Wisconsin Ave, Suite 1101 Bethesda, MD License: