OFFERING MEMORANDUM 2620 Blanco Rd, San Antonio, TX 78212 Advance Auto Parts
EXCLUSIVELY LISTED BY Conrad Sarreal National Auto Parts Specialist Conrad.Sarreal@matthews.com DIR (310) 919-5760 MOB (626) 230-1006 LIC # 01982875 Chad Kurz SVP & National Director CONTENTS 1 INVESTMENT OVERVIEW Investment Highlights 6 FINANCIAL ANALYSIS Executive Summary Annualized Operating Data Tenant Summary Chad.Kurz@matthews.com DIR (310) 919-5850 MOB (562) 480-2937 LIC # 01911198 8 TENANT OVERVIEW Advance Auto Parts Kyle Matthews Broker of Record LIC #678067 10 PROPERTY OVERVIEW The Offering Site Description Bird s Eye Tenant Map 14 AREA OVERVIEW San Antonio, TX Demographics Regional Map
INVESTMENT OVERVIEW 4 Advance Auto Parts
Investment Highlights PROPERTY HIGHLIGHTS Minimal landlord responsibilities Tenant is responsible for roof, insurance, taxes, and HVAC Expansion opportunities Landlord owns vacant ± 0.33 AC parcel adjacent to subject property and offers an opportunity to extend existing building Excellent Visibility Positioned on a signalized intersection with a traffic count of more than 20,000 ADT LOCATION HIGHLIGHTS Tax-free State Texas is one of the few states with no state income tax Major MSA San Antonio-New Braunfels, TX ( Greater San Antonio ) is a top 25 MSA in the United States with a population of nearly 2.4 million Dense Infill Market Robust demographics with 3-mile and 5-mile populations more than 155,000 and 380,000 respectively Blue-collar Area Average household income between $69,000 and $75,000 within a 3-mile and 5-mile radius falls within Advance Auto Parts target demographics of Do-it-Yourself consumers TENANT HIGHLIGHTS Advance Stores Company, Inc. (NYSE:AAP) has strong investment grade credit with a S&P rating of BBB- As of January 2, 2016 Advance Auto Parts operated a total of 5,171 stores and 122 branches primarily under the trade names Advance Auto Parts Autopart International, Carquest, and Worldpac Advance Stores Company, Inc. has a current market cap of $12.55 billion and revenue of $9.7 billion MATTHEWS RETAIL ADVISORS 5
FINANCIAL ANALYSIS 6 Advance Auto Parts
Advance Auto Parts 2620 Blanco Rd, San Antonio, TX 78212 List Price... $1,431,000 CAP Rate - Current... 7.60% Gross Leasable Area...± 7,000 SF Lot Size...± 1.17 AC Year Built... 2004 Annualized Operating Data Monthly Rent Annual Rent Rent/SF Current: $9,064 $108,773 $15.54 Option 1: $9,426 $113,115 $16.16 Option 2: $9,804 $117,658 $16.81 Option 3: $10,295 $123,544 $17.65 Tenant Summary Tenant Trade Name Advance Auto Parts Type of Ownership Fee Simple Lease Guarantor Corporate Lease Type NN+ Roof Tenant Responsible Original Lease Term 15 years Lease Commencement Date July 3, 2004 Lease Expiration Date July 31, 2019 Term Remaining on Lease ± 2.75 years Increases 4% Every Five (5) Years Options Three (3), Five (5) Year MATTHEWS RETAIL ADVISORS 7
TENANT OVERVIEW 8 Advance Auto Parts
Company Name Ownership Advance Auto Parts Public No. of Locations ± 5,171 No. of Employees ± 74,000 Headquartered Web Site Roanoke, Virginia www.advanceautoparts.com Year Founded 1929 Tenant Overview Credit Rating (S&P) Source: hoovers.com BBB- Headquartered in Roanoke, VA., Advance Auto Parts, Inc., the largest automotive aftermarket parts provider in North America, serves both the professional installer and do-it-yourself customers. Advance Auto Parts operates over 5,171 stores, over 127 Worldpac branches and serves approximately 1,250 independently owned CARQUEST branded stores in the United States, Puerto Rico, the U.S. Virgin Islands and Canada. Employing approximately 74,000 Team Members, the company works hard to create an environment of honesty, integrity, mutual trust and dedication. These values have remained the same since Advance Auto Parts founding in 1929. Advance Auto Parts operates stores that primarily offer auto parts such as alternators, batteries, belts and hoses, chassis parts, clutches, engines and engine parts. STRATEGY AAP continues to expand its store network in both new and existing markets to grow its commercial and DIY customer base. In a move that created the largest automotive aftermarket parts provider in North America and surpassed rival AutoZone in sales, AAP acquired privately-held General Parts International, a distributor and supplier of original equipment and aftermarket replacement products for commercial markets operating under the CARQUEST and WORLDPAC brands. The company has also been moving into the commercial market in recent years. To better serve commercial customers, AAP has added more parts from key manufacturers to its inventory and expanded its workforce with parts professionals, delivery drivers, and sales representatives. SALES AND MARKETING Advance Auto Parts builds it marketing and advertising campaigns around radio, television, direct marketing, mobile and social media, and local in-store marketing. Its Speed Perks customer loyalty campaign targets core DIY customers and emphasizes service. The company also employs Spanish-language television, radio, and outdoor ads to reach Latinos. GEOGRAPHIC OUTREACH The auto parts chain has stores in all 50 states, as well as Puerto Rico, the US Virgin Islands, and Canada. Florida is the company s largest market with more than 500 stores. North Carolina, New York, Ohio, Pennsylvania, and Georgia are also major markets for Advance Auto Parts, each home to more than 250 stores. MATTHEWS RETAIL ADVISORS 9
PROPERTY OVERVIEW 10 Advance Auto Parts
The Offering Advance Auto Parts Property Address Advance Auto Parts 2620 Blanco Rd San Antonio, TX 78212 Assessor s Parcel Number 07263-016-0301 Zoning Commercial Site Description Number of Stories One Year Built 2004 Gross Leasable Area (GLA) ± 7,000 SF Lot Size ± 1.17 AC Type of Ownership Fee Simple Parking ± 40 Surface Spaces Parking Ratio 5.71 : 1,000 SF N Landscaping Professional Topography Generally Level Construction Foundation Framing Exterior Parking Surface Roof Concrete Slab Steel Concrete Block Asphalt Flat MATTHEWS RETAIL ADVISORS 11
Bird s Eye Blanco Rd ± 20,000 ADT W Olmos Rd ± 2,000 ADT 12 Advance Auto Parts
Tenant Map MATTHEWS RETAIL ADVISORS 13
AREA OVERVIEW 14 Advance Auto Parts
San Antonio, TX Local & Regional Map San Antonio, officially the City of San Antonio, is the seventh-most populated city in the United States and the second-most populous city in the state of Texas, with a population of 1.4 million. It was the fastest growing of the top 10 largest cities in the United States from 2000 to 2010. San Antonio is the center of the San Antonio-New Braunfels Metropolitan Statistical Area, commonly referred to as Greater San Antonio. REGIONAL MAP With a population of over one million and second only to Houston as Texas s most populated city, San Antonio, Texas is big in every way. With varied historical, cultural and fun attractions, San Antonio sees well over 20 million visitors to the city every year. From its friendly residents, Texas home-style cooking and renowned Mexican fare to exciting nightlife, it s no wonder that so many people call San Antonio home and so many more travel to Texas to visit this timeless city on the river. Accolades Top 10 most family-friendly cities in the nation (Movoto) One of the best US Housing Markets (Forbes) Top 10 Best US City to Retire In (Wall Street Journal) #3 Best US Cities for Affordable Getaways (Travel + Leisure) #1 romantic city (Amazon.com) One of the nation s fastest-growing cities (Forbes) One of the nation s best-performing cities (The Milken Institute) Nation s New IT Destination (PR Newswire) LOCAL MAP MATTHEWS RETAIL ADVISORS 15
Demographics Population 1 Mile 3 Mile 5 Mile 2021 Projection 21,603 155,414 380,982 2016 Estimate 21,070 150,383 366,338 2010 Census 20,856 146,060 353,390 Growth 2016-2021 2.53% 3.35% 4.00% Growth 2010-2016 1.02% 2.96% 3.66% Economy San Antonio s economy continues to stand out as one of the top three strongest metropolitan areas in Texas and eleventh overall in America. The reason for the city s constant growth is its economic diversity. Major industries in San Antonio include healthcare and biosciences, tourism, military and manufacturing. San Antonio is a city that will continue to see steady growth and tremendous investment opportunities, both nationally and globally. A highly qualified, educated workforce and unmatched cultural mix also position San Antonio as a hot spot for international business. Households 1 Miles 3 Mile 5 Mile 2021 Projection 7,876 59,345 144,998 2016 Estimate 7,576 56,492 137,335 2010 Census 7,313 53,205 128,732 Growth 2016-2021 3.96% 5.05% 5.58% Growth 2010-2016 3.59% 6.18% 6.68% Income 1 Miles 3 Mile 5 Mile 2016 Est. Average Household Income $59,558 $69,611 $75,501 Transportation San Antonio s airport is only 8.5 miles from the downtown business district -- about a 15-minute drive -- which is unusual for a major metropolitan area. San Antonio International is the 6th busiest airport based on passenger boardings in Texas. San Antonio s public transportation system is called VIA Metropolitan and includes 89 bus lines and a small streetcar service downtown. Service is extensive and convenient, and many of San Antonio s popular attractions are easily accessible with public transportation, including: The Alamo, The Japanese Tea Gardens, The Majestic Theater, Mission Conception, and Mission San Jose. 16 Advance Auto Parts
San Antonio Top Employers Employer # of Employees H-E-B 20,000 USAA 17,000 Cullen/Frost Bankers 3,982 Bill Miller Bar-B-Q 3,540 Rackspace 3,300 CPS Energy 3,022 Toyota Motor Manufacturing 2,900 Clear Channel Communications, Inc. 2,800 Southwest Research Institute 2,715 Valero Energy 1,653 Education San Antonio hosts over 100,000 students in its 31 higher-education institutions. Government funded 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. San Antonio is 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. All new Air Force recruits go through the same basic training at Lackland. Each year, over 35,000 new recruits go through AFBMT. In addition, METC (the 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. MATTHEWS RETAIL ADVISORS 17
Greater San Antonio Overview Referred to as Greater San Antonio, the metropolitan area is an eight-county metropolitan area that straddles South Texas and Central Texas. San Antonio is the third-largest metro area in Texas and is the second-fastest growing large metropolitan area in the state. The metro area is one of 16 metro areas in the U.S. that gained more than 50,000 people from July 2014 to July 2015. 18 Advance Auto Parts
Local Attractions SAN ANTONIO RIVER WALK SEAWORLD SAN ANTONIO SAN ANTONIO ZOO Also known as Paseo del RIo, the River Walk is a network of walkways along the banks of the San Antonio River, one story beneath the streets of San Antonio. Lined by bars, shops, restaurants, nature, and public art the River Walk is an important part of the city s urban fabric and a tourist attraction in its own right. SeaWorld San Antonio is a 250-acre marine mammal park, oceanarium, and animal theme park, located in the Westover Hills District of the City of San Antonio in Texas. It is the largest of the three parks in the SeaWorld chain owned by SeaWorld Entertainment, a division of Blackstone Group, and the world s largest marine-life theme park. The San Antonio Zoo is an Association of Zoos and Aquariums-accredited zoo in Midtown San Antonio. It is located in the city s Brackenridge Park. The 35-acre zoo has a collection of over 3,500 animals representing 750 species. The zoo s annual attendance exceeds 1,000,000. THE ALAMO SAN ANTONIO MUSEUM OF ART MISSION SAN JOSE More than 2.5 million people a year visit the 4.2 acre complex known worldwide as The Alamo. The Alamo Mission in San Antonio, commonly called the Alamo and originally known as Misión San Antonio de Valero, is part of the San Antonio Missions World Heritage Site. Today the Alamo is the heart of San Antonio and it is Texas most visited historic landmark. The San Antonio Museum of Art s global collection represents 5,000 years of history and cultures from around the world. Housed in a complex of buildings that was once the Lone Star Brewery, the Museum is renowned for its collections of Latin American, Asian, and Ancient Mediterranean Art, and includes a notable contemporary collection. Founded in 1720 and known as the Queen of the Missions due to its size and elaborate sculptures that adorns it. The compound walls reveal the importance of community living, which made the missions selfsufficient. The park s Visitor s Center is in Mission San José, where you can view Gente de Razon, which tells the story of life in the missions during the 1700s. MATTHEWS RETAIL ADVISORS 19
CONFIDENTIALITY & DISCLAIMER STATEMENT This Offering Memorandum contains select information pertaining to the business and affairs of Advance Auto Parts located at 2620 Blanco Rd, San Antonio, TX 78212 ( Property ). It has been prepared by Matthews Retail Advisors. 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 Retail Advisors. 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 Retail Advisors 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 Retail Advisors 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. 20 Advance Auto Parts
MATTHEWS RETAIL ADVISORS 21
OFFERING MEMORANDUM EXCLUSIVELY LISTED BY Conrad Sarreal National Auto Parts Specialist Chad Kurz SVP & National Director Kyle Matthews Broker of Record Conrad.Sarreal@matthews.com DIR (310) 919-5760 MOB (626) 230-1006 LIC # 01982875 Chad.Kurz@matthews.com DIR (310) 919-5850 MOB (562) 480-2937 LIC # 01911198 LIC #678067 Advance Auto Parts 2620 Blanco Rd, San Antonio, TX 78212