Challenge
Through a sale leaseback transaction, the Safeway owner in Lake Havasu City, AZ, acquired a $1 billion grocery store portfolio directly from Albertson’s. The seller was motivated to fulfill the exit strategy of their original business plan, which involved capturing the arbitrage value created by selling the assets individually at compressed cap rates. Amid the pandemic and national lockdown, investors were questioning the viability of nearly every asset class and business model, making it difficult to locate a confident buyer.

 

Strategy
By leveraging industry knowledge, consistent communication, and advisement, the Matthews™ team successfully navigated the challenges presented by COVID-19. The buyer was sourced from the Matthews™ industry-leading platform and was in a 1031 Exchange after selling a multifamily building in Los Angeles, CA. The buyer was referred by the Matthews™ Multifamily Division and a Matthews™ specialized retail expert provided an immense amount of value to the clients. By marketing corporate-backed grocery stores as recession resilient, e-commerce resistant, and pandemic-proof assets, the team successfully closed an off-market transaction at a phenomenal price.

 

Results
Thanks to the diligent effort of Matthews™, the property closed all-cash in under 30 days, 45 days earlier than the originally scheduled close date. Matthews™ entered the client into a 20-year absolute NNN lease with annual rent escalation, leaving the buyer with an asset that will provide security. An excellent price was achieved for the seller and the team exceeded the buyer’s expectations by fulfilling their original investment criteria.