10100 E WT Harris Blvd Charlotte NC 28212
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AutoZone 10100 E W.T. Harris Blvd | Charlotte, NC ™ OFFERING MEMORANDUM ™ 2 | Offering Memorandum ™ CONTENTS exclusively listed by PROPERTY Bruce Eversole OVERVIEW Associate 4 [email protected] DIR (214) 692-2102 MOB (409) 256-3370 LIC # 686482 (TX) FINANCIAL OVERVIEW JOSH BISHOP 5 VP & Director [email protected] DIR (214) 692-2289 MOB (315) 730-6228 TENANT LIC # 688810 (TX) OVERVIEW 7 chad kurz SVP & National Director [email protected] AREA DIR (214) 692-2927 MOB (562) 480-2937 12 OVERVIEW LIC # 01911198 (CA) Kyle Matthews BROKER OF RECORD LIC # C27092 (NC) investment highlightsexecutive summary Property Highlights • Charlotte, NC is the 15th largest city in the United States • 12% Increase in Base Term • Extremely Rare Fee Simple AutoZone Deal – subject property offers depreciable fee simple interest • Ideal 1031 Exchange Candidate – paying below $15 a square foot • High Quality – All Brick Construction location Highlights • Dense infill location, more than 100,000 residents in 3-mile radius • 5-mile radius of 223,605 residents and growing • Booming Demographics – Population expected to rise nearly 10% by 2022 • Traffic counts exceed 55,000 vehicles per day on East W.T. Harris Blvd and Idlewild Rd combined • Close proximity to car dealerships indicates exceptional location performance – such as Porsche, BMW, Land Rover, Jaguar, Nissan, Mazda, and Honda tenant Highlights • Top Sales Producer – AutoZone concluded 2016 with ± $10.64 Billion in revenue compared to Advance Auto Parts and O’Reilly Auto Parts closing with $9.57 Billion and $8.6 Billion respectively • INCREASING sales - AutoZone reported net sales of $3.5 billion for its fourth quarter (16 weeks) ended August 26, 2017, an increase of 3.3% from the fourth quarter of fiscal 2016 • Company Expansion - As of August 26, 2017, the Company had 5,465 stores in 50 states in the U.S., the District of Columbia and Puerto Rico, 524 stores in Mexico, 26 IMC branches, and 14 stores in Brazil for a total count of 6,029 • Excellent Investment Grade Credit – AutoZone holds an investment grade credit rating of BBB (S&P) Representative Photo 4 | Offering Memorandum financial overview Annualized Operating Data property name address Monthly Rent Annual Rent Rent/SF Cap Rate Current $7,665 $91,980 $13.21 5.93% AutoZone 10100 E W.T. Harris Blvd Option 1 $9,615 $115,380 $16.57 7.21% Option 2 $10,769 $129,228 $18.56 8.08% location zip code Option 3 $12,061 $144,732 $20.79 9.05% Charlotte, NC 28212 Option 4 $13,508 $162,096 $23.28 10.05% Tenant Summary List Price Cap Rate Tenant Trade Name AutoZone Type of Ownership Fee Simple $1,550,000 5.93% Lease Guarantor Corporate LEase type term remaining Roof and Structure Landlord Responsibility NN ± 7.75 Years Original Lease Term 20 Years Lease Commencement Date 6/1/2005 year built Square Footage Lease Expiration Date 6/30/2025 2005 ± 6,962 Increases 12% Increase in Base Term and Options Options Four, 4-Year Options DOWNTOWN CHARLOTTE IDLEWILD RD ± 25,400 VPD FUTURE RETAIL REDEVELOPMENT 6 | Offering MemorandumE W.T. HARRIS BLVD ± 34,000 VPD Tenant overview Company Name AutoZone Ownership Public No. of Locations ± 5,465 No. of Employees ± 84,000 Headquartered Memphis, Tennessee Website www.autozone.com Year Founded 1979 Tenant Overview For more than 30 years, AutoZone has been committed to providing the best parts, prices and customer service in the automotive aftermarket industry. To stay out of the no-driving zone, DIY car repairers with auto problems often enter the AutoZone. With more than 5,465 stores in the US and Puerto Rico, AutoZone is the nation’s #1 auto parts chain. The company also operates 24 Interamerican Motor Corporation (parts distribution) branches in the US. AutoZone stores sell hard parts (alternators, engines, batteries), maintenance items (oil, antifreeze), accessories (car stereos, floor mats), and non-automotive merchandise under brand names, as well as under private labels. AutoZone’s commercial sales program distributes parts and other products to garages, dealerships, and other businesses. OPERATIONS As part of its business, AutoZone operates through one reportable segment: Auto Parts Stores. Besides being a retailer and distributor of auto parts and accessories, AutoZone produces, sells, and maintains diagnostic and repair information software used in the auto repair industry through its ALLDATA business and sells directly to customers through its e-commerce site, autozone.com. SALES AND MARKETING AutoZone relies on targeted advertising and promotions to build its brand, offer advice about the overall importance of vehicle maintenance, and position its business as a great value. To drive traffic to its stores, the retailer advertises on broadcast and Internet media. It works to educate consumers about which products they need through the use of in-store signage and circulars, as well as creative product placement and promotions. STRATEGY AutoZone has grown quickly through a series of acquisitions over the past several years but now is focused on internal growth and development. Among the factors AutoZone considers when opening new stores is how many cars in an area are OKVs or “our kind of vehicles,” that is, cars older than seven years and no longer under their manufacturers’ warranty. The company’s core strategy includes expanding its stores network with a focus on new-store development and enhancement of existing stores. GEOGRAPHIC REACH Based in Tennessee, AutoZone sells auto and light truck parts, chemicals, and accessories through more than 5,814 AutoZone stores in 50 US, the District of Columbia, and Puerto Rico. Texas, California, Florida, Ohio, and Illinois represent the company’s largest markets and together account for more than a third of locations. AutoZone has distribution centers in more than half a dozen US states and Mexico, and has store support centers in California and Tennessee, as well as in Mexico and Brazil. The company’s fast-growing subsidiary in Mexico, AutoZone de México, operates more than 450 stores. AutoZone, Charlotte, NC | 7 property overview THE OFFERING PARCEL MAP Property Name AutoZone 10100 E W.T. Harris Blvd Property Address Charlotte, NC 28212 Assessor’s Parcel Number 165-033-19 Site Description ZEBULON RD Number of Stories One Year Built 2005 Type of Ownership Fee Simple Gross Leasable Area (GLA) ± 6,962 SF Lot Size ± 0.78 (33,977 SF) Construction Parking ± 36 Surface Spaces Exterior Brick Parking Ratio 5.17 : 1,000 SF Foundation Concrete Slab Landscaping Professional Framing Steel Topography Generally Level Roof Flat 8 | Offering Memorandum AutoZone, Charlotte, NC | 9 regional map 10 | Offering Memorandum AutoZone, Charlotte, NC | 11 area overview 12 | Offering Memorandum charlotte demographics 2,489,479 ESTIMATED POPULATION IN 2017 2,819,076 PROJECTED POPULATION IN 2025 13.24% CHANGE IN POPULATION HOUSEHOLDS 1 Mile 3 Mile 5 Mile demographics 2022 Projection 4,714 42,330 95,112 POPULATION 1 Mile 3 Mile 5 Mile 2017 Estimate 4,519 39,928 89,302 2022 Projection 13,865 107,803 237,605 2010 Census 4,277 36,711 80,915 2017 Estimate 13,329 101,920 223,927 Percent Change: 2017 - 2022 4.32% 6.02% 10.37% 2010 Census 12,676 94,207 204,558 Percent Change: 2010 - 2017 5.66% 8.76% 6.51% Percent Change: 2017 - 2022 4.02% 5.77% 6.11% INCOME 1 Mile 3 Mile 5 Mile 2017 Estimated Average Percent Change: 2010 - 2017 5.15% 8.19% 9.47% Household Income $52,328 $56,823 $72,280 CHARLOTTE, NC Charlotte is the largest city in North Carolina and the second largest Banking Center in the country. It is known for being a world-class city through a variety of art, science, and historical attractions, all while retaining its small-town charm. Referred to as the Queen City, Charlotte is the home of NASCAR and the Charlotte Motor Speedway. 90 percent of the NASCAR Sprint Cup Series teams are headquartered within 50 miles of Charlotte. The quality of life enjoyed by residents of Metropolitan Charlotte is an important factor in the tremendous growth of the city and surrounding rural acreage. An undisputed hub for entertainment and culture, the city draws regional audiences to performances and events at the North Carolina Blumenthal Performing Arts Center and other venues. Recreational opportunities are abundant from Atlantic Ocean water and whitewater rafting at the U.S. National Whitewater Center to roller coasters at Carowinds and hiking in one of the many surrounding national parks and reserves. 14 | Offering Memorandum economy Charlotte has become a major U.S. financial center with the third most banking assets after New York City and San Francisco. The nation’s second largest financial institution by total assets, Bank of America, calls the city home. 2,431,300 Charlotte has become the regional headquarters for East Coast operations of Wells Fargo, which is headquartered Total Population in San Francisco, California. Charlotte also serves as the headquarters for Wells Fargo’s capital markets activities including sales and trading, equity research, and investment banking. Bank of America’s headquarters, along with other regional banking and financial services companies, are located primarily in the Uptown central business district. Microsoft’s East Coast headquarters are in Charlotte as well. Charlotte has six Fortune 500 companies in its metropolitan area. Listed in order of their rank, they are Bank of America, Lowe’s in suburban Mooresville, Duke Energy, Nucor (steel producer), Sonic Automotive and Sealed Air Corp. The Charlotte area includes a diverse range of businesses, such as Chiquita Brands International, Harris $53,274 Teeter, Snyder’s-Lance, Carolina Foods Inc, Bojangles’, Food Lion, Compass Group USA, and Coca-Cola Bottling Co. Median Household Income Consolidated (Charlotte being the nation’s second-largest Coca-Cola bottler); motor and transportation companies such as RSC Brands, Continental Tire the Americas, LLC., Meineke Car Care Centers, Carlisle Companies (along with several other services), along with a wide array of other businesses.