offering memorandum - Matthews Real Estate Investment Services

Pep Boys
5658 S Transit Rd, Lockport, NY 14094
OFFERING MEMORANDUM
™
CONFIDENTIALITY & DISCLAIMER STATEMENT
This Marketing Brochure contains select information pertaining to the business
and affairs of Pep Boys located at 5658 S Transit Rd, Lockport, NY 14094 here to
referred to as “Property”. Information in this Marketing Brochure is confidential
and provided solely for the purpose of a review by a prospective purchaser of the
Property. It is not to be used for any other purpose and may not be made available
to any other person without the written consent of the Seller or Matthews Retail
Group, Inc.
This Marketing Brochure has been prepared by Matthews Retail Group, Inc. (also
known as Matthews Retail Advisors) based in part upon information supplied by
the Seller and in part upon financial information obtained from sources deemed
reliable by Matthews Retail Group, Inc. However, Matthews Retail Group, Inc. has
not and will not verify any of this information, nor has Matthews Retail Group, Inc.
conducted any investigation regarding these matters. Matthews Retail Group, Inc.
makes no guarantee, warranty or representation whatsoever about the accuracy
or completeness of any information provided.
It is the Buyer’s responsibility to independently confirm the accuracy and
completeness of all material information before completing any purchase. This
Marketing Brochure is not a substitute for the Buyer’s thorough due diligence
investigation of this investment opportunity. Matthews Retail Group, Inc. expressly
denies any obligation to conduct a due diligence examination of this Property for
the Buyer. Any projections, opinions, assumptions or estimates used in this
Marketing Brochure are for example only and do not represent the current or
future performance of this Property. The value of a net leased property to the
Buyer depends on factors that should be evaluated by the Buyer and their tax,
financial and legal advisors. Buyer and Buyer’s tax, financial, legal, and construction
advisors should conduct a careful, independent investigation of any property to
determine to their satisfaction the suitability of the Property for their investment
goals.
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Like all real estate investments, this investment carries significant risks. Buyer and
Buyer’s legal and financial advisors must request and carefully review all legal and
financial documents related to the Property and tenant. While the tenant’s past
performance at this or other locations is an important consideration, it is not a
guarantee of future performance.
Similarly, the lease rate for some properties, including newly-constructed facilities or
newly-acquired locations, may be set based on a tenant’s projected sales with little
or no record of actual performance, or comparable rents for the area. Returns are
not guaranteed; the tenant and any guarantors may fail to pay the lease rent or
property taxes, or may fail to comply with other material terms of the lease; cash
flow may be interrupted in part or in whole due to market, economic, environmental
or other conditions. Regardless of tenant history and lease guarantees, Buyer is
responsible for conducting his/her own investigation of all matters affecting the
intrinsic value of the Property and the value of any long-term lease, including the
likelihood of locating a replacement tenant if the current tenant should default or
abandon the Property, and the lease terms that Buyer may be able to negotiate with
a potential replacement tenant considering the location of the Property, and Buyer’s
legal ability to make alternate use of the Property.
By accepting this Marketing Brochure you agree to release the Seller and Matthews
Retail Group, Inc. of any and all liability and hold the parties harmless from any kind
of claim, cost, or expense arising out of your investigation and/or purchase of this
Property.
NON-ENDORSEMENT NOTICE
Matthews Retail Group, Inc. is not affiliated with, sponsored by, or endorsed by any
commercial tenant or lessee identified in this Marketing Brochure. The presence of
any corporation’s logo or name is not intended to indicate or imply affiliation with, or
sponsorship or endorsement by, said corporation of Matthews Retail Group, Inc., its
affiliates or subsidiaries, or any agent, product, service, or commercial listing of
Matthews Retail Group, Inc., and is solely included for the purpose of providing
tenant lessee information about this listing to prospective customers.
TABLE OF CONTENTS
PRICING AND FINANCIAL ANALYSIS
Investment Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Financial Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Company Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
PROPERTY DESCRIPTION
Property Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Bird’s Eye . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Tenant Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Regional Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
DEMOGRAPHICS
Demographics Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
City Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
PRESENTED BY
Josh Bishop
VP & Director
License No. 01940394
O 310.919.5823
M 315.730.6228
[email protected]
Braden Crockett
Senior Associate
License No. 01946071
O 310.919.5814
M 714.345.6206
[email protected]
VA Granchelli
Broker of Record
License No. 35GR0267775
™
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Investment Overview
INVESTMENT HIGHLIGHTS
• Strong 7.50% return on a stable investment
• Tenant recently extended their lease for an additional 5-years, proving their
commitment to the location
• 4.5 Years remaining on a NN lease
• Minimal landlord responsibility
• One, Five-Year extension option with a 22% rent increase
• Replaceable rent of only $52,272
• Very cheap Price Per SF of only $175/SF compared to KFC, Rite Aid, Wendy’s,
and First Niagara Bank, which sold or are under contract above $300/SF
• More than 33,700 residents located within a 3-mile radius
• Property is located on a signalized corner along South Transit Road which boasts
over 20,000 vehicles per day
• Transit Road is the major thoroughfare which runs north and south through the
heart of Lockport
• Transit Road is home a long list of national retailers including The Home Depot,
Walmart, Panera Bread, PetSmart, Dollar Tree, Save-A-Lot, Wendy’s, Denny’s,
ALDI, Pizza Hut, Arby’s, Dunkin’ Donuts, T.J. Maxx, Applebee’s, Tim Hortons,
McDonald’s, Big Lots, Tractor Supply, and many more
• Less than 1/2 mile from a 185K SF Super Walmart, which is owned by Wal-Mart;
This was finalized in 2015 and was a relocation of their old 100K SF location
• Transit North claims to offer retailer the opportunity to capture over $1 Billion in
new retail sales
• Lockport is a suburb of Buffalo, the Second largest city in the state of New York
2
Financial Overview
EXECUTIVE SUMMARY
5658 S Transit Rd
Lockport, NY 14094
List Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$703,030
Gross Leasable Area . . . . . . . . . . . . . . . . . . . . . . . . ±4,025 SF
CAP Rate - Current . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.50%
Year Built . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1979
Lot Size . . . . . . . . . . . . . . . . . . . . . . . . ±0.34 Acres (14,810 SF)
ANNUALIZED OPERATING DATA
Monthly Rent
Annual Rent
Increases
CAP Rate
Current - 1/31/2021
$4,393.94
$52,727.22
$13.10
7.50%
Option 1 - 1/31/2026
$5,360.60
$64,327.21
$15.98
9.15%
TENANT SUMMARY
Tenant Trade Name
Pep Boys
Type of Ownership
Fee Simple
Lease Guarantor
Lease Type
Roof and Structure
Original Lease Term
Lease Commencement Date
Rent Commencement Date
Lease Expiration Date
Term Remaining on Lease
Increases
Options
™
Corporate
NN
Landlord Responsible
5 years
11/30/2010
2/1/2011
1/31/2021
±4.50 years
±22% In Option
One (1), Five (5) Year Option
3
Company Overview
Tenant
Company Name
Parent Company Trade Name
Ownership
No. of Locations
No. of Employees
Headquartered
Web Site
Year Founded
Pep Boys
The Pep Boys - Manny, Moe & Jack
Icahn Enterprises L.P.
Private
±800
±18,646
Philadelphia, Pennsylvania
http://www.pepboys.com
1921
Philadelphia-based Pep Boys has operations in 35 US states and Puerto
Rico. Major markets for the company include California, Florida,
Pennsylvania, and Texas, home to nearly half of its stores. Pep Boys
also has warehouses in California, Georgia, Texas, Indiana, New York,
and Pennsylvania.
An automotive paradise for do-it-yourselfers, Pep Boys stock about
25,000 car parts and accessories, including tires, and combined,
operate more than 7,500 service bays for vehicle repairs, inspections,
and parts installations. It also offers credit and parts delivery to
commercial customers, such as repair shops, fleet operators, schools,
and municipalities. Founded in 1921 by Philadelphians Manny, Moe, and
Jack, Pep Boys was acquired by billionaire investor Carl Icahn’s Icahn
Enterprises in February 2016.
In late 2015, Pep Boys found itself the target of a bidding war between
Japanese tire company Bridgestone and activist investment firm Icahn
Enterprises. After originally accepting an $835 million offer from
Bridgestone, the auto parts retailer eventually agreed to a $1 billionplus purchase by Icahn (which completed in February 2016). The
investment firm plans to combine Pep Boys with the Auto Plus chain,
which it acquired earlier in 2015.
4
Property Overview
THE OFFERING
Property Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pep Boys
Property Address . . . . . . . . . . . . . . . . . . . . . . 5658 S Transit Rd
Lockport, NY 14094
Assessor’s Parcel Number . . . . . . . . . 292600-123-013-0001-004-000
SITE DESCRIPTION
Number of Stories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . One
Year Built . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1979
Gross Leasable Area (GLA) . . . . . . . . . . . . . . . . . . . . ±4,025 SF
Lot Size . . . . . . . . . . . . . . . . . . . . . . . . ±0.30 Acres (14,810 SF)
Type of Ownership . . . . . . . . . . . . . . . . . . . . . . . . Fee Simple
Parking . . . . . . . . . . . . . . . . . . . . . . . . . . ±20 Surface Spaces
Parking Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . 5.93 : 1,000 SF
Landscaping . . . . . . . . . . . . . . . . . . . . . . . . . . . Professional
Topography . . . . . . . . . . . . . . . . . . . . . . . . . . Generally Level
CONSTRUCTION
Foundation . . . . . . . . . . . . . . . . . . . . . . . . . . . Concrete Slab
Exterior . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Brick
Parking Surface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Asphalt
Roof . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Flat
6
PROPERTY DESCRIPTION
Bird’s Eye
7
™
S Transit Rd ± 26,000 VPD
Ruhlmann Rd
Tenant Map
8
PROPERTY DESCRIPTION
Regional Map
™
9
Demographics Report
Population
1-Mile
3-Mile
5-Mile
2021 Projection
6,057
33,500
44,606
2016 Estimate
6,074
33,764
44,826
2010 Census
6,166
34,618
45,720
2000 Census
6,403
35,661
46,084
2021 Projection
2,685
14,890
19,113
2016 Estimate
2,661
14,797
18,989
2010 Census
2,639
14,782
18,960
2000 Census
2,528
14,712
18,474
Households
Income
$0 - $15,000
14.79%
14.34%
12.43%
$15,000 - $24,999
13.08%
13.10%
12.03%
$25,000 - $34,999
12.52%
13.01%
12.23%
$35,000 - $49,999
14.53%
14.86%
14.45%
$50,000 - $74,999
17.62%
18.15%
18.05%
$75,000 - $99,999
12.16%
12.27%
12.88%
$100,000 - $124,999
6.71%
6.42%
7.40%
$125,000 - $149,999
4.76%
3.94%
4.72%
$150,000 - $199,999
2.09%
2.62%
4.03%
$200,000 - $249,999
0.77%
0.73%
1.06%
$250,000 - $499,999
0.89%
0.50%
0.66%
$500,000+
0.09%
0.05%
0.06%
2016 Est. Average Household Income
$58,133
$56,691
$62,359
2016 Est. Median Household Income
$44,929
$44,632
$48,812
11
DEMOGRAPHICS
City Overview
LOCKPORT, NEW YORK
Lockport is a city located in the center of Niagara County, New York, that is
approximately 18 miles east of Niagara Falls. The city grew from the banks
of the nineteenth century engineering marvel, the Erie Canal. As a friendly
community with rich, historic roots, Lockport is New York State’s premier
Erie Canal community.
It is the fastest growing town in upstate New York as a result of the city’s
commitment to spurring economic development, creating jobs, and
bettering the quality of life for its residents.
The Niagara Frontier, traditionally a major center for industry and commerce,
has become significant for its range of moderate to light and researchoriented manufacturing as well as heavy industrial manufacturing.
Visitors have numerous places to venture, from the heart of downtown and
numerous art studios to the Flight of Five Winery and the popular Canal
Street Historic District. Outdoor enthusiasts also have plenty to choose
from such as hiking and biking along the Canalway Trail to launching
canoes and kayaks at the Nelson Goehle Widewaters Marina.
TOP EMPLOYERS - NIAGARA COUNTY
1. Niagara Falls Air Reserve Station
2. Seneca Niagara Casino & Hotel
3. Delphi Thermal
4. Niagara County
5. Fashion Outlets of Niagara
6. Niagara Falls City School District
7. Niagara Falls Memorial Medical Center
8. Eastern Niagara Health System
9. Mount St. Mary’s Hospital
10. Lockport City School District
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Pep Boys
5658 S Transit Rd, Lockport, NY 14094
OFFERING MEMORANDUM
Josh Bishop
VP & Director
License No. 01940394
O 310.919.5823
M 315.730.6228
[email protected]
Braden Crockett
Senior Associate
License No. 01946071
O 310.919.5814
M 714.345.6206
[email protected]
VA Granchelli
Broker of Record
License No. 35GR0267775
841 Apollo Street, Suite 150 | El Segundo, CA 90245 | www.matthews.com
™