Strong Corporate Credit – Revenues Over $6.2B – One of the Top Retailers in the U.S. – The Property is leased to Safeway Inc., a subsidiary of Albertsons Companies, Inc. (NYSE: ACI). Headquartered in Boise, Albertsons Companies is one of the largest food and drug retailers in the United States, reporting revenues of over $62B (2020) and operating 2,252 stores across 34 states and the District of Columbia.
High Performing Store – Below Market Rent – Extremely Low 1.3% Occupancy Cost – Mitigated Future Vacancy Risk – This Safeway store is performing at a very high level with estimated gross sales of $35,100,000 ($625 psf) annually and an unprecedented 1.3% (est.) occupancy cost. Safeway is currently paying $8.35 per square foot in rent, which is approximately 25%-30% below the average market rent for a national grocery store in both Pueblo and the State of Colorado. The lower rent and extremely high store performance ensure that Safeway will continue to profitably operate long-term at this site for many years to come.
Limited Grocery Competition in the Trade Area – Long Term Operating History – Safeway has been successfully operating at this location for 20 years. Safeway is dominating this quadrant of the Pueblo market due to a lack of competition. This store has benefitted from the closure of two other Safeway stores in the Pueblo market: a sister Safeway store in 2016 and an Albertson’s store in 2018.
Early Lease Extension – Safeway Investing in Online Sales with “Drive Up & Go” at this Location – Commitment to the Site – Safeway exercised their 1st lease renewal option early in February of 2020, extending their lease an additional five years in addition to increasing their rent by 6%. Additionally, Albertsons Companies has selected this Safeway store location to be part of its new “Drive Up & Go” program to capture the online grocery sales market which has seen 276% increase in FY2020. The early lease option extension/rent increase and the new improvements related to the online sales component confirms Safeway is profitable at this location and confirms their commitment to this site.
Strong National Tenant Mix Provides Strong Draw to the Subject Property – Located in the Pueblo West Marketplace Shopping Mall which, features strong national co-tenants such as Dollar Tree, McDonald’s, O’Reilly Auto Parts, T-Mobile, Safeway Fueling Center, Grease Monkey and Supercuts. Nearby retailers include Walgreens, Auto Zone, Parkview Medical Center, Prairie Sporting Goods, and Boardman RV.
New On/Off Ramp Construction at Purcell Blvd & Hwy 50 – Improved Visibility & Access to the Subject Property – Construction started in July 2020 on a new overpass at the signalized intersection of Purcell Blvd. and Highway 50 to allow for a new on/off ramp directly from HWY 50 onto Purcell Blvd. This will provide the subject property and shopping center improved traffic flow to the site while increasing the overall visibility to a combined 41,000+ cars per day. The project is slated for completion in September 2022.