NNN Profile: Safeway

Safeway, Inc. is an American supermarket chain that offers many in-house private label brands as well as name brands across all product categories. Following the healthy foods trend, the stores have expanded the number of organic fruits and vegetables in the produce section. Other department sections include deli and meat, flowers, bakery, pharmacy, liquor, and many aisles of nonperishable items. Safeway, Inc. is a publicly owned company with a market cap of $8 billion.

Headquartered in Pleasanton, California, with 900 stores internationally, Safeway is a trophy net leased investment because of their B+ credit rating, and parent company Albertsons having the largest market share of supermarkets in the U.S. Albertsons is planning a merger with Rite Aid, which will help both companies increase their purchasing power, lower costs, and increase annual sales to $80 billion for the newly formed food and drug store merger. Primary lease terms are typically 20 year triple net leases with 5-year renewal options. For 2017, cap rates and sales prices averaged 5% and $12,000,000 respectively.