OFFERING MEMORANDUM O’Reilly Auto Parts - Matthews · This Offering Memorandum contains select information pertaining to the business and affairs of O’Reilly Auto Parts located

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O F F E R I N G M E M O R A N D U M

O ’ R e i l l y A u t o P a r t s1 8 2 1 M A D I S O N S T | C L A R K S V I L L E , T N

Representative Photo

2 | M a t t h e w s R e a l E s t a t e I n v e s t m e n t S e r v i c e s™

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E X C L U S I V E LY L I S T E D B Yc o n r a d s a r r e a l

Associate

[email protected] (310) 919-5760MOB (626) 230-1006LIC # 01982875 (CA)

c h a d k u r z

SVP & National Director


J o s h B i s h o p

VP & Director

[email protected] (214) 692-2289MOB (315) 730-6228LIC # 688810 (TX)

Kyle MatthewsBroker of Record

Lic # 263667


O ’ R e i l l y A u t o P a r t s , C l a r k s v i l l e , T N | 3

C O N T E N T S

4 INVESTMENT OVERVIEWInvestment Highl ights

6 FINANCIAL ANALYSISExecut ive SummaryAnnual ized Operat ing DataTenant Summary

8 TENANT OVERVIEWO’Rei l ly Auto Parts Overview

1 4 AREA OVERVIEWCity Overview

1 0 PROPERTY OVERVIEWSite Descr ipt ion Parcel MapSurrounding TenantsRegional Map

Representative PhotoRepresentative Photo

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I n v e s t m e n t H i g h l i g h t s

Property Highlights

• Ideal 1031 Candidate – Nearly 19 years remaining on the lease

• Rare 20-year Corporate Lease – O’Reilly Auto Parts is one of the few investment grade credit tenants with 20-year corporate leases

• Rent Increases – Attractive rent increases of 6% in years 11 and 16 help hedge against inflation

• Upgraded High Quality Construction – Brand new building featuring unique brick and concrete block design

• Roof Warranty – Roof installation comes with 20-year limited warranty

Location Highlights

• Income Tax-free State – Tennessee is one of the few states with no state income tax

• Strong Tenant Mix – nearby tenants include Walmart Supercenter, Food Lion, Lowe’s, Publix, Kroger, Chick-Fil-A, IHOP, and many more

• Main Thoroughfare – Subject property sits on Highway 41 with a traffic count of nearly ±20,000 VPD

• College Town – Clarksville is home to Austin Peay State University (±10,344

students)

• Top 5 Largest City – Clarksville is the 5th largest city in Tennessee with over 150,000 residents reported in 2016

Tenant Highlights

• Most Stable Outlook – O’Reilly Automotive Stores, Inc. (NYSE:ORLY) has the highest investment credit rating of all auto parts retailers (S&P BBB+)

• Expansion Mode – ±190 new stores are planned for 2017 in addition to current ±4,712 stores in 45 states

• Billion Dollar Revenue – Reported Revenue for 2016 was ±$8.6 Billion




f i n a n c i a l a n a ly s i s



List Price .................................................................................................................. $2,047,685

CAP Rate - Current ..........................................................................................................5.25%

Gross Leasable Area ..............................................................................................± 7,225 SF

Lot Size ................................................................................................................ ± 0.75 Acres

Year Built ...............................................................................................................................2016

Annualized Operating DataMonthly Rent Annual Rent Rent/SF Cap Rate

Current $8,958 $107,503 $14.88 5.25%

Years 11-15 $9,496 $113,954 $15.77 5.57%

Years 16-20 $10,065 $120,791 $16.72 5.90%

Option 1 $10,669 $128,038 $17.72 6.25%

Option 2 $11,310 $135,721 $18.78 6.63%

Option 3 $11,988 $143,864 $19.91 7.03%

Option 4 $12,708.00 $152,496 $21.11 7.45%

Tenant Summary

Tenant Trade Name O’Reilly Auto Parts

Type of Ownership Fee Simple

Lease Guarantor Corporate

Lease Type NN

Original Lease Term 20 Years

Roof, Structure, Parking Lot LL Responsible

Lease Commencement Date 6/27/2016

Rent Commencement Date 6/27/2016

Lease Expiration Date 6/30/2036

Term Remaining on Lease ± 19 Years

Increases 6% Increase Year 11, 16 and Every Option

Options Four, 5-Year Options

O ’ R e i l ly A u t o P a r t s1821 Madison St Clarksville, TN 37043


T e n a n t O v e r v i e w



Property Name O’Reilly Auto Parts

Ownership Public

Revenue $8.6B

Net Income $1.04B

No. of Locations ± 4,712

No. of Employees ± 71,943

Headquartered Springfield, MO

Website http://www.oreillyauto.com

Year Founded 1957

TENANT OVERVIEW

The fast-growing company sells automotive aftermarket parts (both new and remanufactured), maintenance supplies, professional service equipment, tools, and accessories through some 4,712 stores across some 45 US states and online. Many O’Reilly stores also offer customers a range of services, including oil and battery recycling, battery testing, paint mixing, and tool rental. The family founded and operated company wheels and deals with automotive professionals, as well as do-it-yourself customers.

STRATEGY

O’Reilly is a company dedicated to providng their customers with amazing service. Their customer service culture is their greatest competitive advantage and the driving force behind their marketing strategy. Their constant priority is to identify, hire, and develop exceptional team members, while teaching them the culture values of hardwork, enthusiasm, professionalism, teamwork, respect, and honesty.

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t h e o f f e r i n gProperty Name O’Reilly Auto Parts

Property Address 1821 Madison St

Clarksville, TN 37043

Site DescriptionNumber of Stories One

Year Built 2016

Gross Leasable Area (GLA) ± 7,225 SF

Lot Size ± 0.75 Acres ( 32,625 SF)

Type of Ownership Fee Simple

Parking ± 36 Surface Spaces

Landscaping Professional

Topography Generally Level

Construction Brick and Block

Parking Lot Asphalt

p r o p e r t y O v e r v i e w


O ’ R e i l l y A u t o P a r t s , C l a r k s v i l l e , T N | 1 1

p a r c e l m a p

Madison Street ± 19,000 ADT


S U R R O U N D I N G T E N A N T S


Future Shopping Center

R e g i o n a l M a p

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A r e a O v e r v i e w C l a r k s v i l l e , T N

E c o n o m y

Also known as “The Queen City,” Clarksville, Tennessee is the fifth-largest city in the state. It is located in Montgomery county, just an hour outside of Nashville. The town has a long history and has grown steadily throughout the years. What was once a nameless settlement area has grown into a striving city.

The Clarksville area was founded as settlement ground in 1779, by James Robertson. The land was used as a home base during the American Revolutionary War. As the war ended, many soldiers and settlers stayed and created a small town. Clarksville was a fully functional town before Tennessee was founded as a state in 1796.

The population kept growing throughout the years. The town has rebuilt throughout the 20th century, and each time, they built the town even bigger than before. By 1980, the population had more than doubled.

Today, the most popular industries are still within manufacturing and retail trade. Most residents’ occupations within these fields are in production and administrative support. There are several stable industrial employers in Clarksville. Fort Campbell is the largest public employer while Tran is the largest private employer within the region. Other major employers include American Standard and Google.


p r o p e r t y d e m o g r a p h i c s

POPULATION 1 Mile 3 Mile 5 Mile

2022 Projection 5,955 32,776 70,654

2017 Estimate 5,773 31,606 66,666

2010 Census 5,583 30,137 60,314

2000 Census 5,583 30,137 60,314

Growth 2017 - 2021 3.15 3.70 5.98

Growth 2010 - 2017 3.40% 4.87% 10.53%

Growth 2000 - 2010 -2.40% 5.67% 17.49%

HOUSEHOLDS 1 Mile 3 Mile 5 Mile

2022 Projection 2,975 13,926 28,746

2017 Estimate 2,856 13,315 26,882

2010 Census 2,594 11,515 20,147

Growth 2017 - 2022 4.17% 4.59% 6.93%

INCOME 1 Mile 3 Mile 5 Mile

2017 Est. Average Household Income

$58,785 $59,273 $62,632

p o i n t s o f i n t e r e s t Roxy Theatre:

Located in downtown Clarksville, the Roxy Theatre has been a main attraction in the town since 1947. It was built after the 1913 Lilian Theatre burned down in 1945. The iconic theatre has been a backdrop for many different films, music videos, and photo shoots. The theatre is still active today, producing live shows. The Roxy Regional School of the Arts was created in 1995 and offers teens training by professionals in modern theatre.

McGregor Park Riverwalk:

If you want to catch a glimpse of Clarksville’s natural side, head down to McGregor Park Riverwalk. Take a stroll along the Cumberland River and explore the beautiful scenery. You can also take a steam boat ride up the river or slowly paddle with paddle boats. It is a great way to watch the sun come up or relax at the end of the day.


624,261

$64,688

33.9

POPULATION

AVERAGE HOUSEHOLD INCOME

MEDIAN AGE

NASHVILLE BY THE NUMBERS

N a s h v i l l e , T N

Economy

Located along the Cumberland River, Nashville is not only Tennessee’s capital, but also the largest city in the state. It is the center for many different industries including music, healthcare, banking, publishing, and transportation. Nashville is particularly known as the center for country music and has been nicknamed, “Music City, U.S.A.”

You can find history throughout the city. Nashville has everything from the Johnny Cash Museum to sites that pertained to the Battle of Nashville during the Civil War. It has the perfect mix of southern charm and modern art.

Today, Nashville is best known as the “home of country music,” so it makes sense that much of its economy is based off recording and production of music. There are many different corporate and independent recording labels throughout the area. Nashville has also been the headquarters for Gibson, a major guitar company, since 1984.

Although Nashville is the second-largest music production area, the city’s largest industry is in health care. It holds over 300 health care companies, including the largest private hospital operator, Hospital Corporation of America. The health care industry has brought 200,000 jobs to Nashville in recent years. Other company headquarters in Nashville include Nissan North America, Bridgestone, UBS, and Dollar General.


p o i n t s o f i n t e r e s t

Natchez Trace PArkway Nashville Food Tour The District

Founded in 1925, the Grand Ole Opry is a

historical country music hall that has hosted the

best of the best in music. The Opry showcases

chart-topping country, bluegrass, folk, gospel,

and comedic performances and skits. It is a

staple in Nashville and brings in millions of

guests each year.

To escape the big city, head down to Natchez

Trace Parkway. It has a beautiful scenic route with

many different natural features and historical

sites. Explore everything from the Double Arch

Bridge, Jackson Falls, and Meriwether Lewis

Gravesite.

Take a tour of one of the last historic mansions

in Tennessee. It will give you an idea of how

the rich lived during the 1800’s, and how they

treated people during this time. Specifically,

learn how the Acklen family lived in the house

and how Adelicia Hayes Franklin strived after

the death of her husband.

Not only is Nashville known for its music, but

also its food! There are many different tours

that will take you around the city, trying all the

different types of food Nashville has to offer. If

you are craving great southern cooking, do not

miss out.

The Country Music Hall of Fame and Museum

holds over 2.5 million artifacts from country

music legends. With permanent and temporary

exhibits, there is always something new and

exciting to see. If you love country music, this is

a must-see.

As for Nashville’s night life, the District is the

place to be. Bands and a variety of music echo’s

Broadway Street. With countless clubs and bars,

there is something to do every night of the week.

Belmont MansionGrand ole Opry Country Music Hall of Fame and Museum

This Offer ing Memorandum contains select informat ion pertaining to the business and af fa i rs of O’Reilly Auto Parts located at 1821 Madison St , Clarksville, TN 37043 (“Property”) . I t has been prepared by Matthews Real Estate Investment Services. This Offer ing Memorandum may not be al l - inclusive or contain a l l of the informat ion a prospect ive purchaser may desire. The informat ion contained in th is Offer ing Memorandum is conf ident ia l and furnished solely for the purpose of a review by a prospect ive purchaser of the Property. I t is not to be used for any other purpose or made avai lable to any other person without the wri t ten consent of Sel ler or Matthews Real Estate Investment Services. The mater ia l is based in part upon informat ion suppl ied by the Sel ler and in part upon f inancial informat ion obtained from sources i t deems rel iable. Owner, nor their of f icers , employees, or agents makes any representat ion or warranty, express or impl ied, as to the accuracy or completeness of th is Offer ing Memorandum or any of i ts contents and no legal l iabi l i ty is assumed or shal l be impl ied with respect thereto. Prospect ive purchasers should make their own project ions and form their own conclusions without rel iance upon the mater ia l contained herein and conduct their own due di l igence.

By acknowledging your receipt of th is Offer ing Memorandum for the Property, you agree:

1 . The Offer ing Memorandum and i ts contents are conf ident ia l ;

2 . You wi l l hold i t and treat i t in the str ictest of conf idence; and

3. You wi l l not , d i rect ly or indirect ly, d isclose or permit anyone else to disclose this Offer ing Memorandum or i ts contents in any fashion or manner detr imental to the interest of the Sel ler.

Owner and Matthews Real Estate Investment Services expressly reserve the r ight , at their sole discret ion, to reject any and al l expressions of interest or of fers to purchase the Property and to terminate discussions with any person or ent i ty reviewing this Offer ing Memorandum or making an of fer to purchase the Property unless and unt i l a wr i t ten agreement for the purchase and sale of the Property has been ful ly executed and del ivered.

I f you wish not to pursue negot iat ions leading to the acquis i t ion of the Property or in the future you discont inue such negot iat ions, then you agree to purge al l mater ia ls relat ing to th is Property including this Offer ing Memorandum.

A prospect ive purchaser ’s sole and exclusive r ights with respect to th is prospect ive t ransact ion, the Property, or informat ion provided herein or in connect ion with the sale of the Property shal l be l imited to those expressly provided in an executed Purchase Agreement and shal l be subject to the terms thereof. In no event shal l a prospect ive purchaser have any other c la ims against Sel ler or Matthews Real Estate Investment Services or any of their af f i l iates or any of their respect ive of f icers , Directors , shareholders, owners, employees, or agents for any damages, l iabi l i ty, or causes of act ion relat ing to th is sol ic i tat ion process or the market ing or sale of the Property.

This Offer ing Memorandum shal l not be deemed to represent the state of af fa i rs of the Property or const i tute an indicat ion that there has been no change in the state of af fa i rs of the Property s ince the date this Offer ing Memorandum.

C O N F I D E N T I A L I T Y & D I S C L A I M E R S TAT E M E N T


BROKER OF RECORD

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e x c l u s i v e ly l i s t e d b y

O F F E R I N G M E M O R A N D U M

O ’ R e i l l y A u t o P a r t s

1 8 2 1 M A D I S O N S T | C L A R K S V I L L E , T N

c o n r a d s a r r e a l

Associate


c h a d k u r z

SVP & National Director


J o s h B i s h o p

VP & Director

[email protected] (214) 692-2289MOB (315) 730-6228LIC # 688810 (TX)

Kyle MatthewsBroker of Record

Lic # 263667

Documents

OFFERING MEMORANDUM O’Reilly Auto Parts - Matthews · This Offering Memorandum contains select information pertaining to the business and affairs of O’Reilly Auto Parts located