Tenant Description

Whole Foods Market operates natural and organic foods supermarkets, offering produce, seafood, grocery, meat and poultry, bakery, prepared foods and catering, coffee and tea, nutritional supplements, and vitamins, as well as specialty products such as beer, wine, and cheese, body care, educational products, floral, pet and household products. As of Sep 24, 2017, Whole Foods operated 470 stores, with 448 stores in 42 states and the District of Columbia, 13 stores in Canada and 9 stores in the UK. NOTE: On Aug 28, 2017, the company was acquired by Amazon.

As of Sep 24, 2017, Whole Foods operated 470 stores, with 448 stores in 42 states and the District of Columbia, 13 stores in Canada and 9 stores in the UK.

In fiscal 2017, the company opened 31 new stores, 7 stores were relocated and closed 9 stores.

The company owns 17 stores and the remainder are leased. Most stores range from 35,000 to 45,000 square feet and average 39,800 sq. ft., are located in high-traffic shopping areas on premier real estate sites, and are either freestanding or in strip centers. There are also a number of urban stores located in high-density, mixed-use developments. In fiscal 2015, the company announced plans to launch a second, more affordable, store format, 365 by Whole Foods Market, which the company believes can grow to beyond 1,200 stores.

Real Estate Summary

Under Construction.

Pros
Cons
  • Industry-leading investment-grade credit
  • Compressed cap rates due to high investor demand
  • Rental escalations in base term
  • Generally high rental rates PSF that could prove hard to replace in the event 7-Eleven vacates
  • Low price point relative to similarly strong investment-grade tenants
  • Investor unable to depreciate improvements in ground-leased locations
  • Predominantly Absolute to Modified NNN ground leases with zero to limited landlord responsibilities
  • Widely considered "recession proof"
    and "Amazon proof"
  • Industry-leading market share and track record of profitability
  • Predominantly corner locations in urban markets with excellent demographics and population density
  • One of the lowest relocation rates in the net lease industry
  • Development Criteria Highlights

    • 50,000 +/- square feet of Land
    • Corner or corner wrap w/signage on two major streets.
    • Signalized intersection.
    • Ability to build up to 4,000 sq. ft.
    • Parking to meet all applicable codes.
    • Ability to build to a minimum height of 23’4″.




    Average Cap Rate
    4.27%
    National 12-mo avg.
    (Source: CoStar & proprietary comp data -
    updated quarterly)
    Credit Rating
    BBB+
    Baa1
    Standard & Poor's
    Moody's
    Company Snapshot
    Company Name

    McDonalds Corp.

    Ownership Type

    Public

    Stock Symbol

    NYSE:MCD

    Headquarters

    Oak Brook, IL

    Locations Worldwide

    37,000+

    Locations in the U.S.

    14,000+

    Website

    mcdonalds.com

    Average Property & Lease
    Sales Price

    $1,721,828

    Annual Base Rent

    $73,148

    Annual Rent PSF

    $15.89

    Building SF

    4,603

    Price PSF

    $374

    Lot Size

    1.15 Acres

    Ownership Interest

    Fee Simple Land
    (Ground Lease)

    Lease Structure

    Absolute NNN

    Lease Term

    20 Years

    Escalations

    10% Every 5 Years

    Guarantor

    McDonald's Corp.

    National 12-mo avg.
    (Source: CoStar & proprietary comp data -
    updated quarterly)