SAFEWAY (Albertsons Companies, Inc Guaranty) · M.B. doubled the size of his business in 1926, when...

1451 Ritchie Highway - ARNOLD, MARYLAND 21012

SAFEWAY (A lbertsons Companies , Inc Guaranty)O F F E R I N G M E M O R A N D U M

ACTUAL PROPERTYThis information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of © 2016 Marcus & Millichap. Activity ID: Z0331252 1


Financia l Overv iew

PRICE $18,533,000

CAP RATE 5.50%

NOI $1,004,250

PRICE PER SQUARE FOOT $408.77

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 Fee Simple

LEASE GUARANTORAlbertsons Companies, Incorporated (Inc)

LEASE TYPE Absolute-Net

ROOF AND STRUCTURE Tenant Responsible

OFFERING SUMMARY

LEASE COMMENCEMENT DATE 11/1/2017

LEASE EXPIRATION DATE 10/31/2037

LEASE TERM 20 Years

TERM REMAINING 20 Years

INCREASES1.5% Years 2-5, 7.5% Every 5 Starting Year 11

OPTIONS TO RENEW 8, 5-Year

FIRST RIGHT OF REFUSAL Yes - Commencing in Year 5

LEASE SUMMARY

PRIMARY TERM

Lease Year Increase Monthly Rent Annual Rent

11/1/2017 10/31/2018 - $83,688 $1,004,250

11/1/2018 10/31/2019 1.50% $84,943 $1,019,314

11/1/2019 10/31/2020 1.50% $86,217 $1,034,603

11/1/2020 10/31/2021 1.50% $87,510 $1,050,123

11/1/2021 10/31/2022 1.50% $88,823 $1,065,874

11/1/2022 10/31/2023 - $88,823 $1,065,874

11/1/2023 10/31/2024 - $88,823 $1,065,874

11/1/2024 10/31/2025 - $88,823 $1,065,874

11/1/2025 10/31/2026 - $88,823 $1,065,874

11/1/2026 10/31/2027 - $88,823 $1,065,874

11/1/2027 10/31/2028 7.50% $95,485 $1,145,815

11/1/2028 10/31/2029 - $95,485 $1,145,815

11/1/2029 10/31/2030 - $95,485 $1,145,815

11/1/2030 10/31/2031 - $95,485 $1,145,815

11/1/2031 10/31/2032 - $95,485 $1,145,815

11/1/2032 10/31/2033 7.50% $102,646 $1,231,751

11/1/2033 10/31/2034 - $102,646 $1,231,751

11/1/2034 10/31/2035 - $102,646 $1,231,751

11/1/2035 10/31/2036 - $102,646 $1,231,751

11/1/2036 10/31/2037 - $102,646 $1,231,751

OPTIONS

Lease Years Increase Monthly Rent Annual Rent

11/1/2037 10/31/2042 7.50% $110,344 $1,324,132

11/1/2042 10/31/2047 7.50% $118,620 $1,423,442

11/1/2047 10/31/2052 7.50% $127,517 $1,530,200

11/1/2052 10/31/2057 7.50% $137,080 $1,644,966

11/1/2057 10/31/2062 7.50% $147,361 $1,768,338

11/1/2062 10/31/2067 TBD FMV/12 FMV

11/1/2067 10/31/2072 TBD FMV/12 FMV

11/1/2072 10/31/2077 TBD FMV/12 FMV

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of © 2016 Marcus & Millichap. Activity ID: Z0331252 2


Investment Overv iew

ACTUAL PROPERTY

• 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

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.



Tenant Overv iew - 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 well-known 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 GUARANTORAlbertsons Companies, Incorporated

(Inc)

NUMBER OF LOCATIONS 2,324

HEADQUARTERED Boise, Idaho

WEB SITE http://www.albertsons.com/#1

SALES VOLUME $59.7 Billion (2016)

RANK#49 on Fortune 500 (2017), #3 Forbes

America’s Largest Private Companies

ACTUAL PROPERTYThis information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of © 2016 Marcus & Millichap. Activity ID: Z0331252 4

C O M PA N Y H I G H L I G H T S

Albertsons Companies , Inc

ACTUAL PROPERTY

Founded in 1939 and based in Boise, Idaho, Albertsons Companies, LLC (“Albertsons”, or the “Company”) is the 2nd largest traditional grocer in the UnitedStates serving over 34 million customers per week and generating $60 billion in sales annually. In January 2015, Albertsons merged with Safeway, creating abest-in-class organization dedicated to bringing a better shopping experience to customers across the country. The Company’s powerful combination of stronglocal 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 grownstrategically 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 Q1 2017the Company had already generated $771.7 million in adjusted EBITDA.

COMPANY BANNERS

2,300+retail stores

Operates in35 states

including Washington, DC$59.7 billion

annual sales

34 millioncustomers

per week

One of the largest retail employers

273,000 jobs

Home delivery in8 of top 10US marketsby end of FY 2017

1,700+ in-storepharmacies

380+ fuelstations

28 distributioncenters

18 food andbeverage plants

Nation’s largest brandof USDA-certified

organic products

By market sharein 66% of the

122 MSAsin which it operates

#1 / #2

4th largeste-commerce

platform in the US

2nd largesttraditional

grocer in the US

$2.8 billionadj. EBITDA

in FY 2016

$Ex perienced management

with 32 years in retail on average

Currently ex ecuting$800 million

synergy realization plan

500 new itemslaunched every year

Founded in 1939 and based in Boise, Idaho, Albertsons Companies, Inc (“Albertsons”, or the “Company”) is the 2nd largest t radi t ional grocer in the Uni ted States serv ing over 34 mi l l ion customers per week and generat ing $60 b i l l ion in sales annual ly. In January 2015, Albertsons merged with Safeway, creat ing a best- in-class organizat ion dedicated to br inging a bet ter shopping exper ience to customers across the country. The Company’s powerful combinat ion of s t rong local presence and nat ional scale , vast range of brands and products , and serv ice-or iented staf f enable them to meet evolv ing shopping preferences.

As of June 2017, the Company operated 2 ,329 stores across 35 states under 20 wel l-known banners with long operat ing h istor ies . A lbertsons has grown strategical ly through a ser ies of s t rategic acquis i t ions in recent years into a $2.8 b i l l ion adjusted EBITDA company as of f iscal year 2016 ended February 25, 2017, and as of Q1 2017 the Company had a l ready generated $771.7 mi l l ion in adjusted EBITDA.

#1 / #2



Albertsons Credi t Prof i le

ACTUAL PROPERTYACTUAL PROPERTY

Note :• S to re counts based on pub l i ca l l y ava i l ab le in fo rmat ion• Wa lmar t , Cos tco , and Trage t g rocer ysa les based on a percen tage o f to ta l sa les as o f the la tes t f i sca l year.• Kroger and A lber tsons sa les exc lude fue l sa les o f ~$14 b i l l i on and ~$3 b i l l i on , respec t i ve l y

COMPETIT IVE LANDSCAPE

Albertsons Companies, Inc is one of the largest food reta i lers and the second largest t radi t ional grocers in the Uni ted States.



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



Aer ia l Overv iew



5 MILE RADIUS

3 MILE RADIUS

1 MILESITE

50

50

50

50

50

50

97

97

97

174

170

100

177

178

178

179

552

450

424

424

424

450450

665

2

2

2

8

18

3

3

3

32

32

70

Fort Meade

Odenton

Gambrills Arden-On-The-Severn

Herald Harbor

Crownsville

Crofton

The Downs

RivaDonovans

Riva

Edgewater

LondontowneHillsmereShores

Annapolis

Parole

SherwoodForest

SevernaPark

Pasadena

Jacobsville

ManresaWhitehall

Manor

Skidmore

Cape St Claire

Woods Landing

StevensvilleChester

Kent Island

Gibson Island

Area Overview & Demographics

1-Mile 3-Mile 5-Mile

P o p u l a t i o n2000 Population 3,570 43,107 106,093

2010 Population 3,648 44,709 112,851

2017 Population 3,867 45,510 117,774

2022 Population 3,648 44,709 112,851


H o u s e h o l d s


H o u s e h o l d ( H H ) I n c o m e s2000 Households 1,191 15,009 39,212

2010 Households 1,243 15,735 42,076

2017 Households 1,316 15,960 43,887

2022 Households 1,363 16,404 45,339

2017 Average HH Income $146,913 $128,566 $123,830 2017 Median HH Income $124,691 $106,526 $101,214 2017 Per Capita Income $49,997 $45,087 $46,144



Market Overview - Arnold/Annapol is

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 1783–1784. 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 1845.

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.


Marcus & Mi l l ichap hereby advises al l prospect ive purchasers of Net Leased property as fol lows:

The i n f o rma t i on con t a i ned i n t h i s Ma r ke t i ng B rochu re has been ob t a i ned f r om sou rces we be l i e ve t o be r e l i ab l e. Howeve r, Ma rcus & M i l l i c hap has no t and w i l l no t ve r i f y an y o f t h i s i n f o rma t i on , no r has Ma rcus & M i l l i c hap conduc ted any i n ves t i ga t i on r ega rd i ng t hese ma t t e r s . Ma rcus & M i l l i c hap makes no gua ran t ee, wa r r an t y o r r ep resen t a t i on wha t soeve r abou t t he accu racy o r comp le t eness o f an y i n f o rma t i on p ro v i ded .

As t he Buye r o f a ne t l e a sed p rope r t y, i t i s t he Buye r ’s r e spons i b i l i t y t o i ndependen t l y con f i rm t he accu racy and comp le t eness o f a l l ma te r i a l i n f o rma t i on be fo re comp le t i ng any pu r chase. Th i s Ma rke t i ng B rochu re i s no t a subs t i t u t e f o r you r t ho rough due d i l i gence i n ves t i ga t i on o f t h i s i n ves tmen t oppo r t un i t y. Ma rcus & M i l l i c hap e xp ress l y den i e s any ob l i ga t i on t o conduc t a due d i l i gence e xam ina t i on o f t h i s P rope r t y f o r Buye r.

Any p ro j ec t i ons , op i n i ons , a s sump t i ons o r e s t ima tes used i n t h i s Ma r ke t i ng B rochu re a r e f o r e xamp le on l y and do no t r ep resen t t he cu r r en t o r f u t u r e pe r f o rmance o f t h i s p rope r t y. The va l ue o f a ne t l e a sed p rope r t y t o you depends on f ac to r s t ha t shou l d be e va l ua t ed by you and you r t a x , f i n anc i a l and l ega l adv i so r s .

Buye r and Buye r ’s t a x , f i n anc i a l , l ega l , and cons t r uc t i on adv i so r s shou l d conduc t a ca re f u l , i ndependen t i n ves t i ga t i on o f an y ne t l e a sed p rope r t y t o de t e rm ine t o you r sa t i s f ac t i on w i t h t he su i t ab i l i t y o f t he p rope r t y f o r you r needs .

L i ke a l l r ea l e s t a t e i n ves tmen t s , t h i s i n ves tmen t ca r r i e s s i gn i f i c an t r i s k s . Buye r and Buye r ’s l ega l and f i n anc i a l adv i so r s mus t r eques t and ca re f u l l y r e v i ew a l l l ega l and f i n anc i a l documen t s r e l a t ed t o t he p rope r t y and t enan t . Wh i l e t he t enan t ’s pas t pe r f o rmance a t t h i s o r o t he r l oca t i ons i s an impo r t an t cons i de r a t i on , i t i s no t a gua r an t ee o f f u t u r e success . S im i l a r l y, t he l ease r a t e f o r some p rope r t i e s , i n c l ud i ng new l y -cons t r uc t ed f ac i l i t i e s o r new l y - acqu i r ed l oca t i ons , may be se t based on a t enan t ’s p ro j ec t ed sa l e s w i t h l i t t l e o r no r eco rd o f ac t ua l pe r f o rmance, o r compa rab l e r en t s f o r t he a r ea . Re tu r ns a r e no t gua r an t eed ; t he t enan t and any gua r an to r s may f a i l t o pay t he l ease r en t o r p rope r t y t a xes , o r may f a i l t o comp l y w i t h o t he r ma te r i a l t e rms o f t he l ease ; cash f l ow may be i n t e r r up t ed i n pa r t o r i n who l e due t o ma rke t , econom ic, env i r onmen ta l o r o t he r cond i t i ons . Rega rd l e s s o f t enan t h i s t o r y and l ease gua r an t ees , Buye r i s r e spons i b l e f o r conduc t i ng h i s /he r own i n ves t i ga t i on o f a l l ma t t e r s a f f ec t i ng t he i n t r i n s i c v a l ue o f t he p rope r t y and t he va l ue o f an y l ong- t e rm l ease, i n c l ud i ng t he l i k e l i hood o f l oca t i ng a r ep l acemen t t enan t i f t he cu r r en t t enan t shou l d de f au l t o r abandon t he p rope r t y, and t he l ease t e rms t ha t Buye r may be ab l e t o nego t i a t e w i t h a po ten t i a l r ep l acemen t t enan t cons i de r i ng t he l oca t i on o f t he p rope r t y, and Buye r ’s l ega l ab i l i t y t o make a l t e r na t e use o f t he p rope r t y.

By accep t i ng t h i s Ma r ke t i ng B rochu re you ag ree t o r e l ease Ma rcus & M i l l i c hap Rea l E s t a t e I n ves tmen t Se r v i ces and ho l d i t ha rm less f r om any k i nd o f c l a im , cos t , e xpense, o r l i ab i l i t y a r i s i ng ou t o f you r i n ves t i ga t i on and /o r pu r chase o f t h i s ne t l e a sed p rope r t y.


Broker of RecordBryn Mer rey

7200 Wiscons in Ave, Su i te 1101Bethesda, MD 20814

L icense: 646476

SAFEWAY (A lbertsons Companies , Inc Guaranty)

SAFEWAY (Albertsons Companies, Inc Guaranty) · M.B. doubled the size of his business in 1926, when...

Documents

Transcript of SAFEWAY (Albertsons Companies, Inc Guaranty) · M.B. doubled the size of his business in 1926, when...