Autozone OFFERING MEMORANDUM San Antonio, Texas

Home , Bexar County Courthouse, Chief Auto Parts, Downtown San Antonio, Fort Sam Houston, NewTek, Randolph Air Force Base

AutoZone OFFERING MEMORANDUM San Antonio, Texas

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Andrew Bogardus Christopher Sheldon Douglas Longyear Ed Colson, Jr. 415-677-0421 415-677-0441 415-677-0458 858-546-5423 [email protected] [email protected] [email protected] [email protected] Lic #00913825 Lic #01806345 Lic #00829911 TX Lic #635820 Disclaimer

The information contained in this marketing brochure (“Materials”) is proprietary The information contained in the Materials has been obtained by Agent from sources and confidential. It is intended to be reviewed only by the person or entity receiving believed to be reliable; however, no representation or warranty is made regarding the the Materials from Cassidy Turley Northern California (“Agent”). The Materials are accuracy or completeness of the Materials. Agent makes no representation or warranty intended to be used for the sole purpose of preliminary evaluation of the subject regarding the Property, including but not limited to income, expenses, or financial property/properties (“Property”) for potential purchase. performance (past, present, or future); size, square footage, condition, or quality of the land and improvements; presence or absence of contaminating substances The Materials have been prepared to provide unverified summary financial, property, (PCB’s, asbestos, mold, etc.); compliance with laws and regulations (local, state, and and market information to a prospective purchaser to enable it to establish a preliminary federal); or, financial condition or business prospects of any tenant (tenants’ intentions level of interest in potential purchase of the Property. The Materials are not to be regarding continued occupancy, payment of rent, etc). A prospective purchaser must considered fact. The information contained in the Materials is not a substitute for independently investigate and verify all of the information set forth in the Materials. A thorough investigation of the financial, physical, and market conditions relating to the prospective purchaser is solely responsible for any and all costs and expenses incurred Property. in reviewing the Materials and/or investigating and evaluating the Property.

By receiving the Materials you are agreeing to the Confidentiality and Disclaimer set forth herein.

AutoZone, Inc. i HILDEBRAND FAMILY DENTAL CARE AT AUTOMOTIVE Grant Avenue

ALAMO CITY PARTY RENTS

EVERGREEN GARDEN NURSERY

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venue W Hildebrand A AT AUTOMOTIVE Investment Offering & Highlights

The Offering • A retail building located in San Antonio, Texas leased to AutoZone West, LLC, through August 31, 2025

• Price: $1,430,000 – 6.00% Cap Rate

Lease / Tenant • Fortune 500 Investment Grade Tenant — Rated “BBB”

• AutoZone, Inc. Guaranty

• AutoZone’s lease has 11 years remaining

Real Estate • Not a ground lease (improvements included) — depreciation benefits

• Strong sales that are trending up

Area Strengths • Dense infill San Antonio location, within minutes of Downtown San Antonio

• Well-established AutoZone store operating at this location since 1997

AutoZone,FedExSKF USA, Ground Inc. iv2 i AutoZone, Inc. Table of Contents

Disclaimer i

Aerials ii, iii

Investment Offering & Highlights iv

Investment Overview 1

AutoZone, Inc. 2

Site Plan 3

Location Map 4

Area Map 5

San Antonio 6 Economy 7 Colleges and Universities 8 Air Transporation 9

Demographics 10

Location Annual Rent 2223 Blanco Road, San Antonio, Texas Years Annual Rent Return 1 – 11 $ 85,800 6.00% Lot Size Option 1 $ 96,096 6.72% Approximately 0.55 acre – 23,958± square feet Option 2 $107,628 7.53% Option 3 $118,392 8.28% Improvements Constructed in 1997, a 5,418+/– square foot freestanding AUTOZONE retail store (formerly Chief Auto Parts) ) with ample on site parking. Price: $1,430,000 – 6.00% Cap Rate

*THIS IS NOT A GROUND LEASE Rent Per Square Foot Lease $15.84 net per year – $1.32 net per month Leased to AUTOZONE WEST, LLC, and guaranteed by AUTOZONE, INC., for 11 years until August 31, 2025 at the annual net rent of $85,800. The lease is net with the tenant responsible for taxes, insurance and maintenance. The landlord Financing is responsible for roof and structure. There are three 5-year renewal options with The property will be delivered free and clear of permanent financing. 12% rental increases each option period.

Store Sales History Tenant is no longer required to provide sales information, per the 4th Amendment of the lease. Below is the sales history for the past five years.

Year Sales 2009 $1,423,100 2010 $1,531,407 2011 $1,645,387 2012 $1,645,209 2013 $1,841,786

AutoZone, Inc. 1 AutoZone, Inc.

AUTOZONE, INC. (NYSE: “AZO”) is the leading retailer and a leading distributor of automotive replacement parts and accessories with 4,984 retail stores in 49 states, the District of Columbia and Puerto Rico in the U.S., 402 stores in Mexico, and five stores in Brazil for a total count of 5,391 (as of August 30, 2014). Each store carries an extensive line of maintenance items and accessories for cars, sport utility vehicles, vans and light trucks. Headquartered in Memphis, the company has been in business since 1979 and has over 70,000 employees.

AutoZone serves two markets:

• DIY — Do It Yourself: Individual consumers who come to the store to purchase the merchandise and who, typically, work on their own vehicles.

• DIFM — Do It For Me: Auto repair professionals and service shops working on an individual’s vehicle, who usually order by phone, fax, or e-mail. Many service shops order daily from the store for same- or next-day delivery.

• Strong DIFM sales depend upon a good distribution/inventory system. If the ordered item is in stock, there is next-day availability to the ultimate consumer; if not; the objective is to ship from an AutoZone warehouse overnight, providing second-day delivery. To that end, AutoZone has developed a system of warehouses, such that any parts order placed by a given store will be delivered the next morning. To achieve these efficiencies, there are different sizes of highly computerized warehouses, all within an overnight drive of every store.

For the fiscal year ended August 30, 2014, sales were $9.5 billion, an increase of 5.6% from the prior year, while domestic same store sales were up 2.8% for the year. Operating profit increased 5.6% on an operating margin of 19.3%. For fiscal 2014, net income, excluding the extra week, increased 7.7% to $1.1 billion, while diluted earnings per share for the period increased 16.3% to $31.57 from $27.15. Including results from the additional week last fiscal year, sales increased 3.6% from the prior year, and operating profit increased 3.2%. Total stockholder’s deficit was $1.6 billion.

The company is ranked #300 in the 2014 Fortune 500. Standard & Poor’s rates the company as “BBB”, investment grade.

More information is available at www.autozone.com

Representative Photo AutoZone, Inc. 2 RIDGEWOOD COURT

PYLON SIGN BLANCO ROAD

± 5,418 SF

FedExAutoZone, Ground Inc. 73 San Antonio International Location Airport 537

The subject property is a single tenant, freestanding AutoZone store leased on a double-net basis. This AutoZone store (formerly Chief Auto Parts) has been established at this location since 1997. 87 10 The subject property has direct street frontage along Blanco Road 410 with daily average traffic counts of 18,410. The site is three miles north of downtown and 5 miles southwest of San Antonio International Airport. et re St National and local tenants in the immediate area include a Chevron y wa ad Gas, Walgreens, McDonald’s, H-E-B Supermarkets, Bank of America, ro Chase Bank, Family Dollar, Advance345 Auto Parts, Xtreme Auto Sound, Avenue Pedro San B Hog Haus Motorcycles, Bill Miller Bar-B-Q, Valero Gas and more. 281

There are 365,233 residents with an average household income of $51,000 located within a five mile radius of the subject property. One half mile west is 410Interstate 10, which connects San Antonio with other Texas cities including El Paso, Beaumont, and Houston. Frederi

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W Hildebrand Avenue Joint Base San Antonio

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537 Joint Base 281 San Antonio 35

W Commerce Str eet Buen a Vista Street

90W E Commerce Street AutoZone, Inc. 4 35W

Area Map Fort Worth Dallas

20 20 35E

45 10 Austin

Houston 10

San Antonio

Laredo

AutoZone, Inc. 5 San Antonio

San Antonio, in Bexar County, is the seventh most populous city in the United States and the second most populous city in Texas, with a population of 1,409,019. The city is located in the American Southwest, the south–central part of Texas, and the southwestern corner of an urban region known as the Texas Triangle.

San Antonio is the center of the San Antonio–New Braunfels Metropolitan Statistical Area. Commonly referred to as Greater San Antonio, the metropolitan area has a population of over 2.27 million based on the 2013 U.S. Census estimate, making it the 25th- largest metropolitan area in the United States and third-largest in the state of Texas. Growth along the Interstate 35 and Interstate 10 corridors to the north, west and east make it likely that the metropolitan area will continue to expand.

The US armed forces have numerous facilities here: Fort Sam Houston, Lackland Air Force Base, Randolph Air Force Base, and Lackland AFB/Kelly Field Annex, with Camp Bullis and Camp Stanley located outside the city. San Antonio is home to six Fortune 500 companies and the South Texas Medical Center, the only medical research and care provider in the South Texas region.

Downtown San Antonio AutoZone, Inc. 6 Economy

San Antonio has a diversified economy with an approximately $96.8

billion metropolitan GDP, ranking 4th among Texas metropolitan areas and 38th in the United States. San Antonio’s economy is focused primarily within military, health care, government civil service, financial services, oil and gas and tourism sectors. Within the past twenty years, San Antonio has become a significant location for American-based call centers and has added a significant manufacturing sector centered around automobiles.

Located about 10 miles northwest of Downtown is the South Texas Medical Center, which is a conglomerate of various hospitals, clinics, and research and higher educational institutions. The city is also home to one of the largest military concentrations in the United States. The defense industry in San Antonio employs over 89,000 and provides a $5.25 billion impact to the city’s economy.

Over twenty million tourists visit the city and its attractions every year, contributing substantially to the city’s economy, primarily due to The Alamo and Riverwalk. The Henry B. Gonzalez Convention Center alone hosts more than 300 events each year with over 750,000 convention delegates from around the world. Tourism employs 94,000 citizens and makes an economic impact of over $10.7 billion in the local economy. Tourism also brings new annual revenues to San Antonio and other governmental entities with the hotel & motel tax, sales taxes and other revenues from hospitality agreements and contracts. This number exceeded over $300 million in March 2014.

San Antonio is home to six Fortune 500 companies: Valero Energy Corp, Tesoro Corp, USAA, Clear Channel Communications, NuStar Energy and CST Brands, Inc. H-E-B, the 14th largest private company in the United States is also headquartered in San Antonio. Other companies headquartered in San Antonio include: Bill Miller Bar-B-Q Enterprises, Carenet Healthcare Services, Eye Care Centers of America, Frost Bank, Harte-Hanks, Kinetic Concepts, NewTek, Rackspace, Taco Cabana and Whataburger.

Other large companies that operate regional headquarters in the city include: Nationwide Mutual Insurance Company, Kohl’s, Allstate, Chase Bank, Philips, Wells Fargo, Toyota, Medtronic, Sysco, Caterpillar, AT&T, West Corporation, Citigroup, Boeing, QVC and Lockheed.

In 2013, San Antonio ranked No. 11 on Forbes’ list of the Best Places for Business and Careers, boasting a ranking of 9th best market for job growth.

Tesoro Corporation Headquarters University of Texas Health Science Center at San Antonio

Colleges and Universities San Antonio over 100,000 students in its 31 higher-education institutions. Publicly supported schools include the University of Texas Health Science Center at San Antonio, the University of Texas at San Antonio, Texas A&M University–San Antonio, and the Alamo Community College District. The University of Texas at San Antonio is San Antonio’s largest university.

Private universities include top-rated Trinity University, St. Mary’s University, Our Lady of the Lake University, University of the Incarnate Word, Wayland Baptist University - San Antonio, Baptist University of the Américas, and the Southwest School of Art which brought in its first BFA class in 2014. The San Antonio Public Library serves all of these institutions along with the 19 independent school districts within the Bexar County/ San Antonio metropolitan area.

San Antonio is also home to U.S. Air Force Basic Military Training (AFBMT). The Air Force only has one location for enlisted basic training: the 737th Training Group, at Lackland Air Force Base. Each year, over 35,000 new recruits go through AFBMT. In addition, METC (Military Education and Training Campus), which provides the medical training for the U.S. military at Fort Sam Houston, hosts 30 programs and over 24,000 annual graduates. It is the largest medical education center in the world. Air Transportation

The San Antonio International Airport (SAT) is located in Uptown San

Antonio, approximately eight miles north of Downtown. San Antonio International is the 6th busiest airport in Texas. It is served by 21 airlines serving 44 destinations including six in Mexico. Stinson Municipal Airport is a reliever airport located six miles south of Downtown San Antonio.

San Antonio International Airport Terminal AutoZone, Inc. 9 Demographics

2014 Summary 1 mile 3 miles 5 miles

Population 20,414 147,918 365,233 Households 7,508 53,983 133,393 Families 4,514 31,435 80,482 Average Household Size 2.68 2.54 2.60 Owner Occupied Housing Units 3,891 25,685 63,287 Renter Occupied Housing Units 3,617 28,298 70,106 Median Age 35.3 35.9 34.5 Median Household Income $32,328 $32,363 $32,255 Average Household Income $44,932 $50,157 $50,999

2019 Summary

Population 21,102 153,479 379,486 Households 7,815 56,524 139,531 Families 4,653 32,540 83,355 Average Household Size 2.66 2.53 2.59 Owner Occupied Housing Units 3,988 26,402 65,244 Renter Occupied Housing Units 3,826 30,122 74,288 Median Age 36.4 36.7 35.4 Median Household Income $37,287 $37,910 $37,758 Average Household Income $52,814 $59,935 $60,246

Trends: 2014-2019 Annual Rate

Population 0.67% 0.74% 0.77% Households 0.80% 0.92% 0.90% Families 0.61% 0.69% 0.70% Owner Households 0.49% 0.55% 0.61% Median Household Income 2.90% 3.21% 3.20%

San Antonio Riverwalk

FedExAutoZone, Ground Inc. 1210 Demographics (continued)

1 mile 3 miles 5 miles 2014 Households by Income Number Percent Number Percent Number Percent

<$15,000 1,509 20.1% 12,833 23.8% 31,578 Percent $50,000 - $74,999 1,229 16.4% 8,049 14.9% 19,202 14.1% $75,000 - $99,999 466 6.2% 3,300 6.1% 8,250 14.4% $100,000 - $149,999 417 5.6% 3,434 6.4% 9,152 6.2% $150,000 - $199,999 67 0.9% 1,119 2.1% 3,375 6.9% $200,000+ 140 1.9% 1,676 3.1% 4,102 2.5% 3.1% Median Household Income $32,328 $32,363 $32,255 Average Household Income $44,932 $50,157 $50,999 Per Capita Income $16,325 $19,468 $19,508 2019 Households by Income Number Percent Number Percent Number Percent

<$15,000 1,562 20.0% 13,066 23.1% 32,191 23.1% $15,000 - $24,999 1,085 13.9% 7,011 12.4% 17,375 12.5% $25,000 - $34,999 998 12.8% 6,061 10.7% 15,370 11.0% $35,000 - $49,999 1,277 16.3% 8,402 14.9% 20,145 14.4% $50,000 - $74,999 1,322 16.9% 8,571 15.2% 20,245 14.5% $75,000 - $99,999 692 8.9% 4,881 8.6% 11,818 8.5% $100,000 - $149,999 565 7.2% 4,488 7.9% 11,899 8.5% $150,000 - $199,999 115 1.5% 1,625 2.9% 4,853 3.5% $200,000+ 198 2.5% 2,420 4.3% 5,635 4.0%

Median Household Income $37,287 $37,910 $37,758 Average Household Income $52,814 $59,935 $60,246 Per Capita Income $19,354 $23,477 $23,211

Tower of the Americas AutoZone, Inc. 11 Demographics (continued)

1 mile 3 miles 5 miles 2014 Race and Ethnicity Number Percent Number Percent Number Percent

White Alone 15,503 75.8% 111,857 75.6% 268,382 73.5% Black Alone 319 1.6% 4,808 3.3% 17,524 4.8% American Indian Alone 262 1.3% 1,700 1.1% 4,144 1.1% Asian Alone 158 0.8% 1,189 0.8% 4,128 1.1% Pacific Islander Alone 7 0.0% 97 0.1% 262 0.1% Some Other Race Alone 3,442 17.3% 23,881 16.1% 59,328 16.2% Two or More Races 618 3.1% 4,386 3.0% 11,465 3.1% Hispanic Origin (Any Race) 16,673 83.1% 112,875 76.3% 268,345 73.5% 2019 Race and Ethnicity Number Percent Number Percent Number Percent

White Alone 16,069 76.1% 116,344 75.8% 279,492 73.7% Black Alone 353 1.7% 5,133 3.3% 18,532 4.9% American Indian Alone 279 1.3% 1,805 1.2% 4,394 1.2% Asian Alone 181 0.9% 1,321 0.9% 4,597 1.2% Pacific Islander Alone 8 0.0% 105 0.1% 277 0.1% Some Other Race Alone 3,561 16.9% 24,201 15.8% 60,162 15.9% Two or More Races 651 3.1% 4,570 3.0% 12,032 3.2% Hispanic Origin (Any Race) 17,790 84.3% 118,952 77.5% 283,444 74.7%

The Alamo AutoZone, Inc. 12 Cassidyu

Cassidy Turley Net Leased Investment Services www.thinknnn.com