1100 E Williams St, Apex, NC 27502 Autozone

OFFERING MEMORANDUM 1100 E Williams St, Apex, NC 27502 AutoZone

™ EXCLUSIVELY LISTED BY CONRAD SARREAL CHAD KURZ KYLE MATTHEWS Associate SVP & National Director BROKER OF RECORD [email protected] [email protected] LIC # C27092 ™ DIR (310) 919-5760 DIR (214) 692-2927 MOB (626) 230-1006 MOB (562) 480-2937 LIC # 01982875 (CA) LIC # 01911198 (CA) CONTENTS

4 EXECUTIVE SUMMARY

5 FINANCIAL OVERVIEW

6 TENANT OVERVIEW

12 AREA OVERVIEW

™ EXECUTIVE SUMMARY

Investment Highlights

PROPERTY • High-Quality Construction – Brick exterior with metal canopies

• Low Rent/SF – AutoZone is only paying $12.92/SF which is lower than most of their other fee simple build-to-suit rents

• Minimal Landlord Responsibilities – Tenant responsible for parking lot, maintenance of HVAC, taxes, and insurance

LOCATION

• Top 2 MSA – Apex is a suburb of Raleigh and located in the 2nd largest MSA in North Carolina

• Explosive Growth – 1-mile population grew by ±110% between ’00 and ’10 and ±46% between ’10 and ’17

• Affluent Suburb – Average household incomes within a 3-mile and 5-mile radius exceed $117,000 (above Top 2 MSA)

• Excellent Retail Synergy – E Williams St is anchored by a Walmart Supercenter and features other notable tenants such as Dunkin Donuts, Family Dollar, Firestone, Arby’s, BB&T Bank, McDonald’s, and more

• Busy Traffic Counts – E Williams St sees an average traffic count of ± 38,000 VPD and is located off of US Highway 1 which has an average traffic count of ± 33,000 VPD

• Upcoming Developments – Upcoming Apex Developments include a 92-acre tract consisting of 900 homes and 550,000 SF of commercial space and West Village which is a 163-acre mixed-use development

TENANT • Strong Investment Grade Credit – AutoZone boasts investment grade credit of BBB (S&P)

• Largest Auto Parts Retailer – As of August 2016, AutoZone is the largest auto parts retailer with a total of 5,814 stores globally: 5,297 in the United States, 483 in Mexico, 8 in Brazil, and 26 IMC Branches

• 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

4 | Offering Memorandum FINANCIAL OVERVIEW

AutoZone Annualized Operating Data 1100 E Williams St, Apex, NC 27502 Monthly Rent Annual Rent Rent/SF Cap Rate List Price...... $1,440,000 Current $7,500 $90,000 $13.00 6.25% CAP Rate - Current �� 6.25% Option 1 $8,250 $99,000 $14.30 6.88% Option 2 $9,075 $108,900 $15.73 7.56% Gross Leasable Area �� ± 6,921 SF Option 3 $9,983 $119,790 $17.31 8.32% Lot Size �� ± 1.11 Acres Option 4 $10,981 $131,769 $19.04 9.15% Year Built...... 2004

Tenant Summary

Tenant Trade Name AutoZone Type of Ownership Fee Simple Lease Guarantor Corporate Lease Type NN Roof and Structure Landlord Responsible Original Lease Term 20 years Lease Commencement Date 2/1/2005 Rent Commencement Date 2/1/2005 Lease Expiration Date 1/31/2025 Term Remaining on Lease ± 6.75 years Increases 10% in Options Options Four, 5-Year Options

AutoZone, Apex, NC | 5 TENANT OVERVIEW

6 | Offering Memorandum Company Name AutoZone Ownership Public No. of Locations ± 5,814 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 5,814 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, Apex, NC | 7 PROPERTY OVERVIEW

8 | Offering Memorandum The Offering

Property Name AutoZone 1100 E Williams St Property Address Apex, NC 27502 Assessor’s Parcel Number 0741.11-67-2067 0318843 Zoning PC-CU

Site Description Number of Stories One Year Built 2004 Gross Leasable Area (GLA) ± 6,921 SF Lot Size ± 1.11 Acres (48,352 SF) Type of Ownership Fee Simple Parking ± 32 Surface Spaces Parking Ratio 4.74 : 1000 SF Landscaping Professional Topography Generally Level Construction Foundation Concrete Slab Framing Metal Exterior Brick Parking Surface Asphalt Roof Flat

AutoZone, Apex, NC | 9 Bird’s Eye

E Williams St ±38,000 ADT

10 | Offering Memorandum Tenant Map

AutoZone, Apex, NC | 11 AREA OVERVIEW

12 | Offering Memorandum Apex, NC Regional Map The Town of Apex, North Carolina is located in Wake County which is situated within the Research Triangle area and has a well-deserved reputation for being one of the best places to live in the United States. Apex is less than 30 minutes from three Tier 1 Research Universities: University of North Carolina at Chapel Hill, North Carolina State University and Duke University.

It is 15 miles from Raleigh-Durham International Airport which is home to nine commercial air carriers and their regional partners. Combined, they fly customers to more than 40 destinations on 400 flights daily. Lastly, Apex is located less than 20 minutes from the prestigious Research Triangle Park placing innovation and creativity at the fingertips of any business that chooses to locate in Apex.

Apex Accolades • 6th Safest City in North Carolina (February, 2016) • Best Places to Live: #1 in America (August, 2015) • #2 Best City in NC to get a Job (June, 2015) Top County Employers

• 4th Safest Place to Live in North Carolina (January, 2015) Employer Wake County Public Schools EMC North Carolina Accolades Cooper Industries • #5 America’s Top States for Business (July, 2016) Town of Apex • #2 Best State Business Climate (November, 2015) Target • #2 Best State for Business and Careers (October, 2015) ATI Industrial Automation • #3 Best State for Business (May, 2015) Bland Landscaping • Top Ten Most Innovative States in the U.S (April, 2015) Rex Healthcare • #5 State for Clean Sector Job Creation (November, 2014) Walmart • #3 Fastest-Growing State for Tech Jobs (August, 2014) Lowes Home Improvement

AutoZone, Apex, NC | 13 Economy Demographics

The population of Apex has grown from 5,000 people in 1990 to more than 46,000 Population 1 Mile 3 Mile 5 Mile people today. This 800% surge in population is caused by a strong regional 2022 Projection 7,357 52,373 149,781 economy, access to world-class healthcare, top-notch educational opportunities, a 2017 Estimate 6,645 47,654 137,899 charming downtown and wonderful weather. 2010 Census 4,523 39,041 118,037 2000 Census 2,151 22,468 83,340 High-paying tech-industry jobs that help make the quality of life second to none. Population Growth 1 Mile 3 Mile 5 Mile And unlike that other technology hub on the West Coast, Apex is still affordable. A three-bedroom home costs an average of $265,000, vs. more than $1 million for a Percent Change: 2017 to 2022 10.71% 9.90% 8.62% comparable house in Silicon Valley. Percent Change: 2010 to 2017 46.92% 22.06% 16.83% Percent Change: 2000 to 2010 110.27% 73.76% 41.63% The engine powering the local job market is the 7,000-acre Research Triangle Park. Households 1 Mile 3 Mile 5 Mile More than 200 companies, including IBM, Cisco, and pharma giant GlaxoSmithKline, 2022 Projection 2,743 18,454 53,954 have offices there and employ upwards of 50,000 workers. 2017 Estimate 2,478 16,823 49,669 2010 Census 1,676 13,867 42,544 Transportation 2000 Census 775 7,892 29,726 Household Growth 1 Mile 3 Mile 5 Mile Apex is located near the intersection of US Highways 1 and 64, only minutes from Percent Change: 2017 to 2022 10.65% 9.51% 8.59% Interstate 40 and connected to Interstate 540, Apex offers residents and businesses Percent Change: 2010 to 2017 46.84% 20.10% 16.40% excellent access to one of the fastest growing regions in the nation. Percent Change: 2000 to 2010 92.01% 69.60% 40.75% Income 1 Mile 3 Mile 5 Mile Raleigh-Durham International Airport is located 15 minutes from Apex, easily 2017 Est. Average accessible via Interstate 540. This part of the region’s “Outer Loop” provides Apex $80,631 $117,067 $122,176 Household Income residents 6 lanes of interstate-quality access, reducing drive time by offering a more direct route free of traffic lights.

RALEIGH, NC - 14 MI FROM APEX, NC DOWNTOWN APEX

14 | Offering Memorandum CONFIDENTIALITY & DISCLAIMER STATEMENT

This Offering Memorandum contains select information pertaining to the business and affairs of AutoZone located at 1100 E Williams St, Apex, NC 27502 (“Property”). It has been prepared by Matthews Real Estate Investment Services. This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Matthews Real Estate Investment Services. The material is based in part upon information supplied by the Seller and in part upon financial information obtained from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence.

By acknowledging your receipt of this Offering Memorandum for the Property, you agree:

1. The Offering Memorandum and its contents are confidential;

2. You will hold it and treat it in the strictest of confidence; and

3. You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Seller.

Owner and Matthews Real Estate Investment Services expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered.

If you wish not to pursue negotiations leading to the acquisition of the Property or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum.

A prospective purchaser’s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Matthews Real Estate Investment Services or any of their affiliates or any of their respective officers, Directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property.

This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum. OFFERING MEMORANDUM

EXCLUSIVELY LISTED BY CONRAD SARREAL CHAD KURZ KYLE MATTHEWS Associate SVP & National Director BROKER OF RECORD [email protected] [email protected] LIC # C27092 DIR (310) 919-5760 DIR (214) 692-2927 MOB (626) 230-1006 MOB (562) 480-2937 LIC # 01982875 (CA) LIC # 01911198 (CA)

AutoZone 1100 E Williams St, Apex, NC 27502