Advance Auto Parts - OFFERING MEMORANDUM - SULPHUR, LA
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Advance Auto Parts SULPHUR, LA OFFERING MEMORANDUM
Advance Auto Parts
SULPHUR, LA
CONFIDENTIALITY AND DISCLAIMER
The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is
intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made
available to any other person or entity without the written consent of Marcus & Millichap. This Marketing
Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to
establish only a preliminary level of interest in the subject property. The information contained herein is not a
substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and
makes no warranty or representation, with respect to the income or expenses for the subject property, the future
projected financial performance of the property, the size and square footage of the property and improvements,
the presence or absence of contaminating substances, PCB's or asbestos, the compliance with State and Federal
regulations, the physical condition of the improvements thereon, or the financial condition or business prospects
of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The
information contained in this Marketing Brochure has been obtained from sources we believe to be reliable;
however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor
has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or
representation whatsoever regarding the accuracy or completeness of the information provided. All potential
buyers must take appropriate measures to verify all of the information set forth herein.
ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS
& MILLICHAP AGENT FOR MORE DETAILS.
Advance Auto Parts
SULPHUR, LA
NET LEASED DISCLAIMER
Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows:
The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable.
However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap
conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or
representation whatsoever about the accuracy or completeness of any information provided.
As the Buyer of a net leased property, 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 your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies
any obligation to conduct a due diligence examination of this Property for 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 you depends on
factors that should be evaluated by you and your tax, financial and legal advisors.
Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of
any net leased property to determine to your satisfaction with the suitability of the property for your needs.
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 success.
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 Marcus & Millichap Real Estate Investment Services
and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or
purchase of this net leased property.
Advance Auto Parts
TABLE OF CONTENTS
Section 1 PRICING AND FINANCIAL ANALYSIS
Section 2 PROPERTY DESCRIPTION
Section 3 DEMOGRAPHIC ANALYSIS
PRICING AND FINANCIAL ANALYSIS
Advance Auto Parts
SULPHUR, LA
Advance Auto Parts
SULPHUR, LA PRICING AND FINANCIAL ANALYSIS
FINANCIAL OVERVIEW
Location Annualized Operating Data
1380 East Napoleon Street Rent Increases Annual Rent Monthly Rent
Sulphur, LA 70663
Yr 1-10: 09/06/01 - 12/31/11 $84,398.52 $7,033.21
O1: 01/01/12 - 12/31/16 $88,130.04 $7,344.17
Price $979,000 O2: 01/01/17 - 12/31/21 $91,662.48 $7,638.54
Down Payment 100% / $979,000 Base Rent ($12.59/SF) 88,130.04
Net Operating Income $88,130
Rentable Square Feet 7,000
Total Return 9.00% / $88,130
Price/SF $139.86
CAP Rate 9.00%
Year Built 2001
Lot Size 0.70 Acres
Type of Ownership Fee Simple
Tenant Summary
Tenant Trade Name Advance Auto Parts
Ownership Public
Tenant Corporate Store
Lease Guarantor Corporate Guarantee
Lease Type Double Net
Roof and Structure Landlord Responsible
Lease Term 10 Years
Lease Commencement Date 09/06/2001
Rent Commencement Date 09/06/2001
Lease Expiration Date 12/31/16
Term Remaining on Lease 4 Years
Increases In Options
Options Two, Five-Year
Two, (1)
Five-Year
Notes:
1. One, Five-Year Option remaining, Tenant already exercised first option period.
2. In addition to the minimum guaranteed rent, should Tenant's gross sales during any rental year exceed the sums hereinafter set forth then
Tenant shall pay to landlord a sum equal to 2.5% of such excess (the "percentage rental"). The percentage rental shall be determined and payable
on or before the ninetieth (90th) day following the close of each rental year based on the gross sales made from the leased premises for each such
year.
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to
the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any
inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services of
Texas, Inc. © 2012 Marcus & Millichap T0060237
Advance Auto Parts SULPHUR, LA PRICING AND FINANCIAL ANALYSIS TENANT OVERVIEW Roof & Structure: Landlord shall maintain and keep in good order and repair (which shall include replacement, if necessary) the roof, guttering and downspouts, the structural walls and foundations (neither windows nor doors are regarded as walls for the purpose of this paragraph), the electrical wiring (from the utility company's distribution lines to the leased premises) serving the leased premises, the water line (from the city water main to but not including the water meter) serving the leased premises, and the sanitary sewer serving the leased premises (from the ~in city sewer line to the leased premises), and all other structural components of the leased premises. Heating/Air System: Tenant shall maintain and repair the heating/air conditioning system; however, if, as and to the extent that there are major breakdowns in the system then Tenant and Landlord will share equally the expense of replacing the system with a new system or of repairing the same, including labor and parts. A "major breakdown", as used in the preceding sentence, shall mean that if the whole system needs to be replaced or if the cost of any repairs, including labor and parts, shall be equal 11 to or shall exceed $500.00, then a "major breakdown" exists. Landlord shall reimburse Tenant within fifteen (15) days of receipt of notice regarding Landlord's share of the aforesaid costs and should Landlord fail to do so Tenant shall have the right to deduct such share thereof from the rental due hereunder. Parking lot/Sidewalks: Landlord shall maintain and repair the parking lot, the sidewalks and all other areas of the leased premises that are not structurally a part of the building within thirty (30) days after written notice of the necessity of such repairs has been given by Tenant. In the event any of such repairs are. required as a result of negligence or willful act of Tenant, its customers or employees, the cost thereof shall be borne by Tenant. Should Landlord fail to comply with said maintenance and repair obligation after notice, Tenant shall have the right to do so and deduct the cost thereof from the rental due hereunder. Manufacturer's Warranties: Upon TENANT'S acceptance of the leased premises LANDLORD shall promptly assign to TENANT all manufacturer'!i warranties with respect to the mechanical installations within the leased premises, including, without limitation, the heating and air conditioning system(s). This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services of Texas, Inc. © 2012 Marcus & Millichap T0060237
Advance Auto Parts
SULPHUR, LA PRICING AND FINANCIAL ANALYSIS
TENANT OVERVIEW
Property Name Advance Auto Parts
Property Address 1380 East Napoleon Street
Sulphur, LA 70663
Property Type Net Leased Auto Parts
Rentable Square Feet 7,000
Tenant Trade Name Advance Auto Parts
Ownership Public
Tenant Corporate Store
Sales Volume $6.1 Billion (2011)
Net Worth $1 Billion (2011)
Lease Guarantor Corporate Guarantee
Credit Rating BBB-
Rating Agency Standard & Poors
Stock Symbol AAP
Board NYSE
Lease Commencement Date 09/06/2001
Rent Commencement Date 09/06/2001
Lease Expiration Date 12/31/16
Term Remaining on Lease 4 Years
Lease Type Double Net
Roof and Structure Landlord Responsible
Lease Term 10 Years
Increases In Options
Options to Renew Two, Five-Year
Options to Terminate No
Options to Purchase No
First Right of Refusal No
No. of Locations 3,662
Headquartered Roanoke, VA
Web Site https://www.advance-auto.com/
Years in the Business 80 Years
With more than 3,600 stores, Advance is the third-largest aftermarket auto part retailer in the country. Ninety percent of the firm's
stores are east of the Mississippi River, so the company has relatively little exposure to the Western U.S. Advance began as a DIY
specialty retailer, but now operates more than 3,000 commercial delivery programs within existing stores and 200 commercially
oriented Autopart International stores.
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to
the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any
inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services of
Texas, Inc. © 2012 Marcus & Millichap T0060237Advance Auto Parts
SULPHUR, LA PRICING AND FINANCIAL ANALYSIS
FINANCING
Existing Financing
Loan Type Free and Clear
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to
the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any
inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services of
Texas, Inc. © 2012 Marcus & Millichap T0060237PROPERTY DESCRIPTION
Advance Auto Parts
SULPHUR, LAAdvance Auto Parts SULPHUR, LA PROPERTY DESCRIPTION INVESTMENT OVERVIEW Investment Highlights ■ Standard & Poor's Rated BBB- Credit Tenant ■ Nine Percent Cap Rate on Current Income ■ Tenant Recently Exercised Their First Option to Renew ■ One of Nations Largest Auto Parts Supplier ■ Corporate Guarantee ■ Suburb of Lake Charles - Major Cultural, Industrial and Educational Center ■ Major Retail and Shopping Hub for Five-Parish Area Advance Auto Parts is a 7,000-square foot single tenant property located on 0.70 acres in Sulphur, Louisiana. Advance Auto Parts has four years remaining on their double-net lease and has already extended one of their two, five-year options to renew. Advance Auto Parts allows an investor to acquire an investment grade tenant on a double-net lease with minimum landlord responsibility. Advance Auto Parts is one of the largest auto parts retailer in the United States. Founded in Roanoke, Virginia, in 1929, they currently operate more than 3,600 stores under the Advance Auto Parts, Advance Discount Auto Parts, and Western Auto banners in more than 40 states, Puerto Rico, the Virgin Islands as well as an e-commerce site. Its stores carry brand-name replacement parts, batteries, maintenance items and automotive chemicals. Advance Auto Parts is a publicly traded company and is rated a BBB- credit tenant by Standard & Poor's. Sulphur is a city in Calcasieu Parish, Louisiana and a suburb of Lake Charles. Located on the lake for which it is named, Lake Charles is a major cultural, industrial, educational center in the southwest region of the state and is home to McNeese State University and Sowela Technical Community College. Known for its petro-chemical industry, thousands in the lake area are employed by the refineries that include PPG Industries, ConocoPhillips and Citgo Petroleum Corporation. Lake Charles serves as the shopping and retail hub of a five-parish area and is host to a tremendous amount of tourists each year, due to its lake and waterways. Overall, Advance Auto Parts offers an investor the opportunity to acquire a double-net lease, free and clear of existing debt in a major retail hub. This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services of Texas, Inc. © 2012 Marcus & Millichap T0060237
Advance Auto Parts
SULPHUR, LA PROPERTY DESCRIPTION
PROPERTY SUMMARY
The Offering
Property Advance Auto Parts
Property Address 1380 East Napoleon Street
Sulphur, LA 70663
Site Description
Year Built 2001
Rentable Square Feet 7,000
Lot Size 0.70 Acres
Type of Ownership Fee Simple
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to
the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any
inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services of
Texas, Inc. © 2012 Marcus & Millichap T0060237Advance Auto Parts SULPHUR, LA PROPERTY DESCRIPTION PROPERTY PHOTOS This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services of Texas, Inc. © 2012 Marcus & Millichap T0060237
Advance Auto Parts SULPHUR, LA PROPERTY DESCRIPTION AREA MAPS Local Map Regional Map This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services of Texas, Inc. © 2012 Marcus & Millichap T0060237
Advance Auto Parts SULPHUR, LA PROPERTY DESCRIPTION AERIAL PHOTO This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services of Texas, Inc. © 2012 Marcus & Millichap T0060237
DEMOGRAPHIC ANALYSIS
Advance Auto Parts
SULPHUR, LAAdvance Auto Parts
SULPHUR, LA DEMOGRAPHIC ANALYSIS
DEMOGRAPHIC REPORT
1 Mile 3 Miles 5 Miles
1990 Population 6,114 23,476 30,409
2000 Population 5,921 24,200 32,592
2010 Population 6,003 24,550 34,129
2012 Population 6,129 25,063 34,842
2017 Population 6,405 26,195 36,417
1990 Households 2,304 8,433 10,627
2000 Households 2,377 9,280 12,057
2010 Households 2,473 9,672 12,994
2012 Households 2,577 10,076 13,538
2017 Households 2,799 10,948 14,709
2012 Average Household Size 2.37 2.47 2.56
2012 Daytime Population 3,775 11,642 16,770
1990 Median Housing Value $50,601 $55,361 $56,072
2000 Median Housing Value $66,792 $77,426 $79,766
2000 Owner Occupied Housing Units 60.15% 67.80% 70.65%
2000 Renter Occupied Housing Units 30.60% 23.12% 20.49%
2000 Vacant 9.28% 9.10% 8.86%
2012 Owner Occupied Housing Units 54.29% 61.86% 65.78%
2012 Renter Occupied Housing Units 38.07% 30.12% 26.78%
2012 Vacant 7.65% 8.02% 7.44%
2017 Owner Occupied Housing Units 51.99% 59.49% 63.36%
2017 Renter Occupied Housing Units 44.44% 36.25% 32.90%
2017 Vacant 3.57% 4.26% 3.75%
$ 0 - $14,999 20.7% 13.9% 12.4%
$ 15,000 - $24,999 15.5% 13.1% 13.1%
$ 25,000 - $34,999 15.5% 12.5% 11.9%
$ 35,000 - $49,999 11.6% 13.9% 13.6%
$ 50,000 - $74,999 12.8% 16.6% 16.9%
$ 75,000 - $99,999 11.7% 13.6% 14.7%
$100,000 - $124,999 6.5% 8.2% 8.3%
$125,000 - $149,999 2.6% 3.4% 3.8%
$150,000 - $199,999 0.3% 1.7% 2.2%
$200,000 - $249,999 0.1% 0.6% 0.7%
$250,000 + 2.9% 2.4% 2.4%
2012 Median Household Income $33,493 $46,156 $48,759
2012 Per Capita Income $24,251 $25,205 $25,127
2012 Average Household Income $57,948 $61,727 $63,156
Demographic data © 2010 by Experian/Applied Geographic Solutions.
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to
the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any
inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services of
Texas, Inc. © 2012 Marcus & Millichap T0060237Advance Auto Parts SULPHUR, LA DEMOGRAPHIC ANALYSIS SUMMARY REPORT Geography: 1 Miles Population In 2011, the population in your selected geography was 34,842 . The population has changed by 6.90% since 2000. It is estimated that the population in your area will be 36,417 five years from now, which represents a change of 4.51% from the current year. The current population is 48.6% male and 51.3% female. The median age of the population in your area is 36.5 , compare this to the U.S. average which is 36.9. The population density in your area is 443.91 people per square mile. Households There are currently 13,538 households in your selected geography. The number of households has changed by 12.28% since 2000. It is estimated that the number of households in your area will be 14,709 five years from now, which represents a change of 8.64% from the current year. The average household size in your area is 2.56 persons. Income In 2011, the median household income for your selected geography is $48,759 , compare this to the U.S. average which is currently $53,620. The median household income for your area has changed by 25.30% since 2000. It is estimated that the median household income in your area will be $53,683 five years from now, which represents a change of 10.09% from the current year. The current year per capita income in your area is $25,127 , compare this to the U.S. average, which is $28,713. The current year average household income in your area is $63,156 , compare this to the U.S. average which is $73,458. Race & Ethnicity The current year racial makeup of your selected area is as follows: 87.92% White, 7.59% African American, 0.49% Native American and 0.33% Asian/Pacific Islander. Compare these to U.S. averages which are: 72.40% White, 12.60% African American, 0.95% Native American and 4.93% Asian/Pacific Islander. People of Hispanic origin are counted independently of race. People of Hispanic origin make up 3.04% of the current year population in your selected area. Compare this to the U.S. average of 16.90%. Housing The median housing value in your area was $79,766 in 2000, compare this to the U.S. average of $110,796 for the same year. In 2000, there were 9,346 owner occupied housing units in your area and there were 2,710 renter occupied housing units in your area. The median rent at the time was $392 . Employment In 2011, there are 16,770 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed that 51.0% of employees are employed in white-collar occupations in this geography, and 48.9% are employed in blue-collar occupations. In 2011, unemployment in this area is 6.30% . In 2000, the median time traveled to work was 17.3 minutes. Demographic data © 2010 by Experian/Applied Geographic Solutions. This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services of Texas, Inc. © 2012 Marcus & Millichap T0060237
Advance Auto Parts
SULPHUR, LA DEMOGRAPHIC ANALYSIS
TRAFFIC COUNTS
Traffic Count data © 2010 by TrafficMetrix. All rights reserved. Two-way, average daily traffic volumes.
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to
the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any
inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services of
Texas, Inc. © 2012 Marcus & Millichap T0060237Advance Auto Parts
SULPHUR, LA
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