In a Wall Street Journal story published earlier this week, Karen Short of BMO Capital Markets estimates the property value of the real estate bought by Cerberus Capital Management and its partners from Supervalu to be worth $4.4 billion. The partnership group agreed to pay $3.3 billion for Albertsons, Acme, Jewel-Osco, Star Market and Shaw's grocery stores.
According to the article, about half the 877 stores to be purchased are company-owned or subject to ground leases.
Cerberus' partners in the deal - Kimco Realty, Klaff Realty, Lubert-Adler and Schottenstein Real Estate Group - are all real estate companies, and are the same partners that teamed with Cerberus in 2006 to purchase 650 Albertsons stores. The group sold off some of those stores, closed others and kept several in operation. And they reportedly earned significant profits.
According to Kimco COO Mike Pappagallo, "Even though we recognize that the benefit here is primarily improving the overall operation of the business, we're comfortable with the fact that the real estate value we have, at minimum, supports the purchase price."