AutoZone - Stan Johnson Company

Subject Property
AutoZone
S79W18907 Janesville Rd | Muskego (Milwaukee), WI 53150
Strong Investment Grade AutoZone (NYSE: AZO) | 10% Rental Escalations | Milwaukee MSA
Outstanding Upside to Leasing Vacant Space with 12.70% Unleveraged Return | Highly Visible, Easily Accessible Location
Confidentiality and Restricted Use Agreement
Offered Exclusively by
This Confidential Offering Memorandum (“COM”) is provided by Stan Johnson Company (“SJC”), solely for your
consideration of the opportunity to acquire the commercial property described herein (the “Property”). This COM
may be used only as stated herein and shall not be used for any other purpose, or in any other manner, without
prior written authorization and consent of SJC.
This COM does not constitute or pertain to an offer of a security or an offer of any investment contract. This
COM contains descriptive materials, financial information and other data compiled by SJC for the convenience
of parties who may be interested in the Property. Such information is not all inclusive and is not represented to
include all information that may be material to an evaluation of the acquisition opportunity presented. SJC has
not independently verified any of the information contained herein and makes no representations or warranties
of any kind concerning the accuracy or completeness thereof. All summaries and discussions of documentation
and/or financial information contained herein are qualified in their entirety by reference to the actual documents
and/or financial statements, which upon request may be made available. An interested party must conduct its
own independent investigation and verification of any information the party deems material to consideration of
the opportunity, or otherwise appropriate, without reliance upon SJC.
The Property may be financed or withdrawn from the market without notice, and its owner(s) reserve(s) the right
to negotiate with any number of interested parties at any time. The Property is offered and sold by its owner(s)
Brad Feller
Senior Director
[email protected]
P: +1 312.240.0194
WI Lic #57176-90
Isaiah Harf
Director
[email protected]
P: +1 312.777.2437
Blaise Bennett
Associate
[email protected]
+1 312.777.2449
as is, where is, and with all faults, without representation or warranty of any kind except for any customary
warranties of title.
BY ACCEPTING THIS COM, YOU AGREE THAT: (1) all information contained herein, and all other information you
Brandon Duff
Regional Director
have received or may hereafter receive from SJC relating to the Property, whether oral, written or in any other
form (collectively, the “Information”), is strictly confidential; (2) you will not copy or reproduce, and claim as your
own without attribution to SJC, all or any part of this COM or the Information; (3) upon request by SJC at any
time, you will return and/or certify your complete destruction of all copies of this COM and the Information; (4)
for yourself and all your affiliates, officers, employees, representatives, agents and principals, you hereby release
and agree to indemnify and hold harmless SJC all of its affiliates, officers, employees, representatives, agents
and principals, from and with respect to any and all claims and liabilities arising from or related to the receipt or
use of this COM and/or any other Information concerning the Property; (5) you will not provide this COM or any
of the Information to any other party unless you first obtain such party’s acceptance and approval of all terms,
conditions, limitations and agreements set forth herein, as being applicable to such party as well as to you; and
(6) monetary damages alone will not be an adequate remedy for a violation of these terms and that SJC shall be
entitled to equitable relief, including, but not limited to, injunctive relief and specific performance, in connection
with such a violation and shall not be required to post a bond when obtaining such relief.
Stan Johnson Company
303 East Wacker Drive | Suite 1111
Chicago, IL 60601
P: +1 312.240.0127 | F: +1 312.240.0158
stanjohnsonco.com
Table of Contents
Section 1 - About the Investment
The Offering........................................................................................................................................................5
Investment Highlights...................................................................................................................................6
Pricing and Property Overview..............................................................................................................7
Rent Roll................................................................................................................................................................8
Pro Forma NOI Underwriting...................................................................................................................9
Site Plan...............................................................................................................................................................10
Section 2 - Tenant Information
Lease Abstract & Rent Schedule..........................................................................................................12
Tenant Overview............................................................................................................................................ 13
Section 3 - Location Information
Location Overview.........................................................................................................................................15
Strip Map............................................................................................................................................................ 16
Subject Property Photos...........................................................................................................................17
Surrounding Retail........................................................................................................................................ 18
Demographics................................................................................................................................................. 19
Section One
About the Investment
SW
Subject Property
The Offering
Stan Johnson Company is pleased to exclusively offer for
sale to qualified investors, the opportunity to purchase a
100% fee-simple interest in the AutoZone Retail Center
located at S79W18907 Janesville Rd in Muskego, WI (the
“Property”). The Property is located on Janesville Road
directly next to a highly trafficked Walgreens property
and is approximately 20 miles southwest of downtown
Milwaukee.
Built in 2006, the Property is 12,905 square feet on
1.30 acres. The Property currently has one tenant
in place, AutoZone Development Corporation, who
occupies 7,370 square feet. The Property also includes
approximately 5,535 square feet of vacant space which
offers outstanding value-add potential. If leased at
market rates, this could add an additional $106,206 to
current in-place NOI, bringing the “stabilized NOI” to
$203,279 and pro-forma cap rate to 12.70%.
AutoZone is operating under a twenty (20) year base
lease term with ten (10) years of base term remaining,
immediately followed by four, 5-year option periods.
The lease features 10.00% rental escalations every five
years throughout the base term and at the beginning of
each option period. Additionally, the lease is NNN with
the Tenant responsible for its pro rata shares of taxes,
insurance and CAM. Subject to reimbursement by Tenant,
the Landlord is responsible for exterior and structural
components of the building, roof and parking lot.
Positioned next to a highly trafficked Walgreens that is on
the intersection of Janesville Road and Racine Avenue,
the Property benefits from combined traffic counts of
30,320 VPD. The asset is surrounded by dense residential
neighborhoods and is near a strong retail corridor. The
demographics are excellent, with a population of 18k+
within 3 miles/46k+ within 5 miles, and an average
household income of $89k+ within 1 mile/$102k+ within
5 miles.
AutoZone, Inc. (NYSE: AZO) is the nation’s #1 leading
automotive retailer. The company operates over 5,589
stores worldwide and currently employs approximately
46,980 full-time employees. As of August 29, 2015,
AutoZone, Inc. reported total revenues of $10.19 billion
and a net income of more than $1.16 billion. The company
currently holds an S&P credit rating of BBB/Stable.
SE
Subject Property
Section 1 • AutoZone • Muskego, WI • 5
Investment Highlights
Strong Investment Grade Tenant
AutoZone Inc., is the nation’s #1 leading automotive retailer with $10.19
billion in revenues, an EBITDA of $2.26 billion and a current S&P rating of
BBB/Stable
Outstanding Value-Add Potential
Opportunity to lease the 5,535 square-foot vacant space which could add
an additional $106,206 to current in-place NOI, bringing the “stabilized
NOI” to $203,279 and pro-forma cap rate to 12.70%
Rental Escalations
Lease features 10% rental increases every five years through the base term
and at the beginning of each renewal option period
10 Years Base Lease Term Remaining
AutoZone is operating under a 20 year base lease term, followed by four,
5-year renewal option periods
NNN Lease Structure
Property offers investors a truly passive investment with no landlord
responsibilities, aside from capital expenses for exterior and structural
portions of Premises, inclusive of roof and parking which are subject to
reimbursement by Tenant
Highly Visible, Easily Accessible Location
The Property is located less than 20 miles southwest of downtown
Milwaukee, and is less than three miles south of I-43, one of Wisconsin’s
major north/south thoroughfares with daily traffic counts of 33,333 VPD
Newly Constructed Janesville Road in Highly Trafficked Area
Due to increased demand, Janesville Road was recently expanded to a
four-lane divided roadway with sidewalks on both sides of the road, curb
and gutter and a new storm sewer system. Property is next to the newly
constructed road, benefitting from its high traffic counts (30,320 VPD)
Section 1 • AutoZone • Muskego, WI • 6
Pricing Overview
AutoZone
Offering Price:
$1,600,000
Current In-Place NOI:
$97,073
Current In-Place Cap
Rate:
6.07%
Stabilized NOI:
$203,279
Pro-Forma Cap Rate on
Stabilized NOI:
12.70%
Current Tenant:
AutoZone Development Corporation
d/b/a AutoZone (S&P Rated: BBB/Stable)
Property Type:
Multi-Tenant Retail
Property Overview
S79W18907 Janesville Rd | Muskego, WI 53150
Total Building Size (SF):
12,905 SF
Lot Size (Acres):
1.30 Acres
Year Built:
2006
Property ID:
MSKC-2225-987-001
Encumbrances:
None, Delivered Free & Clear
Parking:
35+ Spaces
Occupancy:
Vacancy:
N
Approx. 57.11%
AutoZone – 7,370 SF
Approx. 42.89%
5,535 SF – FMR: $15/SF NNN
Section 1 • AutoZone • Muskego, WI • 7
Rent Roll
Lease Term
Current Rent
Expense Reimbursement Revenues*
SF
%
Share
Begins
Ends
Annual
Monthly
PSF
7,370
57.11%
4/1/2006
3/31/2026
$118,800
$9,000
$16.12
Vacant
5,535
42.89%
Total
12,905
100%
$118,800
$9,000
$9.21
Tenant
CAM
Admin Fee*
Taxes
Insurance
Total
Annual
$15,071
$830
$13,428
$1,537
$30,867
PSF
$2.04
$0.11
$1.82
$0.21
$4.19
$15,071
$830
$13,428
$1,537
$30,867
*Admin Fee is equal to 5% of AutoZone’s proportionate share of CAM and Insurance
Subject Property Photos
Section 1 • AutoZone • Muskego, WI • 8
Pro Forma NOI Underwriting
2016 Stabilized NOI
Building
Allocation
Vacancy
No Vacancy
AutoZone Base Rent
7,370
$118,800.00
$118,800.00
Vacant space leased @
$15/SF
5,535
-
$83,025.00
12,905
$118,800.00
$201,825.00
57.11%
$15,071.02
$15,071.02
42.89%
-
$11,318.61
$830.40
$830.40
-
$623.65
Base Rent
Total Base Rent
CAM Reimbursement
AutoZone CAM
New Tenant CAM
Administrative Fee*
AutoZone Admin Fee
New Tenant Admin Fee
Taxes Reimbursement
AutoZone Taxes
New Tenant Taxes
$13,428.10
$13,428.10
-
$10,084.74
$1,537.04
$1,537.04
-
$1,154.35
Insurance Reimbursement
AutoZone Insurance
New Tenant Insurance
Total Additional Rent
$30,866.57
$54,047.91
TOTAL INCOME
$149,666.57
$255,872.91
Recoverable Expenses
Real Estate Taxes
($23,512.84)
($23,512.84)
CAM
($26,389.63)
($26,389.63)
($2,691.39)
($2,691.39)
($52,593.86)
($52,593.86)
$97,073
203,279
6.07%
12.70%
Insurance
Total Expenses
NOI
Cap Rate
*Admin Fee is equal to 5% of AutoZone’s proportionate share of CAM and Insurance
All 2016 numbers are based off of 2015 Income Statement increased at 3%
Subject Property Photos
Section 1 • AutoZone • Muskego, WI • 9
JANESVILLE RD (12,500 VPD)
Site Plan
NE
Section 1 • AutoZone • Muskego, WI • 10
Section Two
Tenant Information
W
Subject Property
Lease Abstract
Tenant:
AutoZone Development Corporation, d/b/a
AutoZone
Lease Guarantor:
Corporate Guarantee (Corporate Store)
Address:
S79W18907 Janesville Rd, Muskego, WI
Building Size (SF):
7,370
Lot Size (Acres):
1.30 Acres
Pro Rata Share:
57.11%
Year Built:
2006
Lease/Rent
Commencement:
4/1/2006
Lease/Rent Expiration:
3/31/2026
Base Lease Term:
20 years
Base Lease Term
Remaining:
10 years
Annual Base Rent:
$118,800
Annual Base Rent PSF:
$19.50
Rental Increases:
10% increases every 5 years
Renewal Options:
4, 5-Year renewal options
Renewal Notice:
6 Months
Renewal Option
Increases:
10% at the beginning of each option
Lease Type:
NNN
Landlord Responsibilities:
Exterior and structural components of the
building, roof and parking lot (subject to
Tenant reimbursement)
Parking:
+/- 35 spaces
Property ID:
MSKC-2225-987-001
Ownership Interest:
Fee-Simple
Encumbrances:
None, Delivered Free & Clear
Subject Property
Rent Schedule
Years
Dates
Annual
Rent
Monthly
Rent
Rent PSF
1-10
4/1/2006 - 3/31/2016
$108,000
$9,000.00
$14.65
11-15
4/1/2016 - 3/31/2021
$118,800
$9,900.00
$16.12
10.0%
16-20
4/1/2021 - 3/31/2026
$130,680
$10,890.00
$17.73
10.0%
21-25
(Option 1)
4/1/2026 - 3/31/2031
$143,748
$11,979.00
$19.50
10.0%
26-30
(Option 2)
4/1/2031 - 3/31/2036
$158,123
$13,176.90
$21.45
10.0%
31-35
(Option 3)
4/1/2036 - 3/31/2041
$173,935
$14,494.59
$23.60
10.0%
36-40
(Option 4)
4/1/2041 - 3/31/2046
$191,329
$15,944.05
$25.96
10.0%
Increase
Section 2 • AutoZone • Muskego, WI 12
Tenant Overview
AutoZone, Inc. (NYSE: AZO) is the nation’s leading retailer and a leading distributor of automotive
replacement parts and accessories. The company’s stores offer various products for cars, sport utility
vehicles, vans, and light trucks, including new and remanufactured automotive hard parts, maintenance
items, accessories and nonautomotive products. AutoZone was founded in 1979 and is headquartered
in Memphis, Tennessee.
As of fiscal year ending 2015, AutoZone operates 5,609 stores—5,141 units in 49 states, the District
of Columbia, and Puerto Rico in the U.S.; 441 stores in Mexico; and 7 stores in Brazil. In addition, the
company currently employs over 71,000 personals, approximately 58 percent of whom are employed
full-time (FYE15).
Originally a division of Memphis-based wholesale grocer Malone & Hyde, the company initially operated
under the name Auto Shack. After the sale of the grocery operation to the Fleming Companies of
Oklahoma City, the name of the company was changed to AutoZone to reflect the new focus. Since
then, AutoZone has joined the New York Stock Exchange (NYSE: AZO) and earned a spot in the
Fortune 500.
For fiscal year ending 2015, AutoZone, Inc. reported total revenues of $10.19 billion and a net income
of more than $1.16 billion. The company currently holds an S&P credit rating of BBB/Stable.
Corporate Profile
Company:
AutoZone, Inc. (“AutoZone”)
Number of Locations:
5,609 worldwide (FYE15)
Stock Symbol:
AZO
Exchange:
NYSE
Total Revenue:
$10.19 billion (FYE15)
Net Income:
$1.16 billion (FYE15)
Tenant Industry:
Auto Parts
Year Founded:
1979
Headquarters:
Memphis, Tennessee
Website:
autozone.com
Section 2 • AutoZone • Muskego, WI 13
Section Three
Location Information
SE
Subject Property
Location Overview
Muskego is located in Waukesha County, Wisconsin, nestled between two major
thoroughfares and the major cities of Milwaukee and Madison, Muskego. Muskego has
been experiencing steady growth with new developments, high-quality residential
subdivisions, business districts, beautiful lakes and improved roads that have added to
the appeal for many businesses and potential homeowners. Muskego is located just 20
Muskego, WI
miles west of downtown Milwaukee. Muskego is the fifth largest community in Waukesha
County, easily accessible by Interstate Highway 43 (located immediately north of the
city), U.S. Highway 45, WI Highway 36 and county highways G, L, O, Y, HH and OO.
The city of Muskego and the Waukesha County Department of Public Works completed
a reconstruction project on June 26, 2014, of the 2.5-mile section of Janesville Road
from Racine Avenue to Moorland Road through downtown Muskego. Due to increased
demand, Janesville Road was expanded to a four-lane divided roadway with sidewalks
on both sides of the road, curb and gutter and a new storm sewer system that runs
the entire length of the roadway. The Subject Property is located directly next to this
reconstructed road, signalizing high traffic counts on a daily basis.
Muskego Economic Development promotes Muskego as a vibrant business location to
Muskego, WI
new businesses and works to provide opportunities to retain current businesses. The
economic base is very diverse, with retail, commercial districts and major distribution
and manufacturing centers. Responsible economic growth and preservation of its
natural resources enables Muskego citizens to enjoy a superior quality of life. To maintain
Muskego’s natural appeal, discrete business and industrial parks have been established.
Muskego is a spot for recreation enthusiasts where they can fish, boat, tube, hike, bike,
snowmobile and cross-country ski throughout the entire area.
Muskego, WI
Section 3 • AutoZone • Muskego, WI 15
MUSKEGO
ELEMENTARY
SCHOOL
E
AV
NU
E(
13
,02
0V
PD
)
VETERANS
MEMORIAL
PARK
PARKLAND DRIVE
LANNON DRIVE (3,395 VPD)
NE
BASS BAY
(5
,1
1
3V
PD
MUSKEGO INDUSTRIAL
PARK
O
O
DS
RO
AD
SATURN DRIVE
W
MUSKEGO PARK
HARDWOODS
STATE NATURAL AREA
MUSKEGO RECREATION TRAIL
PIONEER DRIVE (1
CI
RA
HORN
FIELD
)
BAY LANE
MIDDLE SCHOOL
)
E
R OA
VPD
,949 VPD)
JAN
LLE
SVI
0
7,30
1
(
D
MANCHESTER
HILL PARK
BAY LANE DRIVE
LITTLE MUSKEGO LAKE
Section 3 • AutoZone • Muskego, WI 16
Subject Property Photos
Section 3 • AutoZone • Muskego, WI 17
Surrounding Retail Photos
Section 3 • AutoZone • Muskego, WI 18
Demographics
S79W18907 Janesville Rd | Muskego, WI
0 - 1 mi.
0 - 3 mi.
0 - 5 mi.
Population
2015 Population
4,924
18,522
46,652
2020 Population
4,889
18,803
47,283
2000-2010 Annual Rate
0.26%
1.12%
1.05%
2010-2015 Annual Rate
-0.44%
0.20%
0.22%
2015-2020 Annual Rate
-0.14%
0.30%
0.27%
2015 Median Age
43.1
43.5
44.8
2015 Total Households
2,106
7,123
17,716
2020 Total Households
2,107
7,270
18,063
2000-2010 Annual Rate
1.19%
1.74%
1.79%
2010-2015 Annual Rate
-0.23%
0.34%
0.40%
2015-2020 Annual Rate
0.01%
0.41%
0.39%
2015 Average Household Income
$89,200
$98,037
$102,023
Households
N
Section 3 • AutoZone • Muskego, WI 19
Offered Exclusively by
Brad Feller
Senior Director
[email protected]
+1 312.240.0194
WI Lic #57176-90
going beyond
Isaiah Harf
Director
[email protected]
+1 312.777.2437
Blaise Bennett
Associate
[email protected]
+1 312.777.2449
Brandon Duff
Regional Director
Stan Johnson Company
303 East Wacker Drive | Suite 1111
Chicago, IL 60601
P: +1 312.240.0127 | F: +1 312.240.0158
stanjohnsonco.com
The information contained herein was obtained from sources believed reliable, however,
Stan Johnson Company makes no guaranties, warranties or representations as to the
completeness thereof. The presentation of this property for sale, rent or exchange is
submitted subject to errors, omissions, change of price or conditions, or withdrawal
without notices.