AUTOZONE GROUND LEASE CONFIDENTIAL OFFERING … · 2186 Bloomingdale Avenue | Valrico, Florida 33596 Investment Summary PROPERTY ADDRESS 2186 Bloomingdale Avenue Valrico, Florida

AUTOZONE GROUND LEASE2186 Bloomingdale Avenue | Valrico, Florida 33596

CONFIDENTIAL OFFERING MEMORANDUM

Representative Photo

AUTOZONE GROUND LEASE 2186 Bloomingdale Avenue | Valrico, Florida 33596

Acquisitions & DispositionsStephanie P. May BeaumierPHONE 614.744.3404FAX [email protected]

Molly BenadumPHONE 614.744.2017FAX [email protected]

William Wamble OFFICE 813.254.6200CELL 850.699.4777FAX 813.254.6225 [email protected]

Redstone Commercial1501 W. Cleveland Street Suite 200Tampa, Florida 33606www.redstonecommercial.com

CASTO250 Civic Center DriveSuite 500Columbus, Ohio 43215

PHONE 614.228.5331TOLL-FREE 1.888.400.0878FAX 614.469.8224 www.castoinfo.com

Financing ContactMichael WagnerPHONE 614.744.2030FAX [email protected]

PACE FINANCIAL GROUP250 Civic Center DriveSuite 150Columbus, OH 43215www.pacefg.com

Pace Financial Group, LLC

OFFERING MEMORANDUM

Representative Photo Representative Photo

CASTO | REDSTONE | 2


INVESTMENT HIGHLIGHTS

Representative Photo CASTO | REDSTONE | 3


Investment Summary

PROPERTY ADDRESS2186 Bloomingdale Avenue Valrico, Florida 33596

PRICE $1,340,200

ANNUAL RENT $65,000

CAP RATE 4.85%

TENANT AutoZone Stores LLC

CREDIT RATINGS&P - BBB Moody's - Baa1

LAND AREA +/- 0.689 AC

YEAR BUILT 2018

RENT COMMENCEMENT March 20, 2018

LEASE TERM 15 years

RENEWAL OPTIONS Four 5-year options

LEASE TYPE Ground Lease

Investment HighlightsGround Lease This newly constructed AutoZone is a 15 year ground lease featuring four 5-year options to renew, with tenant having full maintenance responsibility of the premises and all improvements.

Corporate Guaranty from Investment Grade TenantThe ground lease is corporately guaranteed by AutoZone, Inc. (NYSE: AZO). AutoZone, Inc. has an S&P rating of BBB, Moody's rating of Baa1, over 6,000 stores, and a market cap of $18.02B with 26.44M shares outstanding.

Significant Rent IncreasesThis lease features 10% rent increases in years 6 and 11, as well as 10% increases in each of the four option periods.

Growing Retail CorridorSituated in front of Crest Pointe Town Shoppes, a 43.52 acre mixed-use development anchored by a new Walmart Supercenter, the site offers excellent visibility and frontage on highly traveled Bloomingdale Avenue. Surrounding retailers include Publix, The Fresh Market, Starbucks, Wendy's, Chick-fil-A, CVS, Walgreens, Verizon, Stein Mart and Bealls, among others.

Low Tax BurdenWith no personal income taxes imposed in Florida, the state features one of the lowest tax burdens in the country.

Superior DemographicsWithin one mile of the property, the median household income is $101,380, which is 107% higher than the statewide average. Retail expenditures average $3,227 per household per month.

Excellent Location Located in the Tampa-St. Petersburg-Clearwater MSA, the area boasts a robust, diverse economy with 19 corporate headquarters, eight of which are Fortune 1000 companies. MacDill Air Force Base contributes $5 billion annually to the greater Tampa Bay economy.

Impressive Tourism DollarsIn 2016, a record-breaking 22.6 million visitors spent $6 billion in Hillsborough County and contributed approximately $369 million in state and local tax revenues.

Highly Trafficked IntersectionBloomingdale Avenue - 26,000 ADT Lithia Pinecrest Road - 19,000 ADT

INVESTMENT HIGHLIGHTS

Densely Populated Location (5-Mile Radius)

ESTIMATED POPULATION 180,929

ESTIMATED HOUSEHOLDS 66,202

AVERAGE HOUSEHOLD INCOME $90,207

NUMBER OF BUSINESSES 5,358

NUMBER OF EMPLOYEES 44,649

TOTAL RETAIL EXPENDITURES $2.07B


AUTOZONE GROUND LEASE 2186 Bloomingdale Avenue | Valrico, Florida 33596 TENANT PROFILE


AZO (NYSE) Investment Information As of July 2018

SHARES OUTSTANDING 26.44M

MARKET CAP $18.02B


GUARANTOR AutoZone, Inc.; with an S&P rating of BBB and Moody's rating of Baa1

LOCATIONS Over 6,000 stores in the US, Puerto Rico, Mexico & Brazil

ABOUT AUTOZONE AutoZone (NYSE: AZO) is the nation's leading retailer and one of the top distributor's of automotive replacement parts and accessories. Each store sells extensive lines for cars, sports utility vehicles, vans and light trucks, includ-ing new and remanufactured parts, maintenance items, accessories and non-automotive parts.

AutoZone, which was founded in 1979 in Forrest City, Arkansas, is dedicated both to providing cus- tomers with superior service and advice as well as quality automotive parts and products at a great value. Stores are designed for convenience, with approximately 85%-90% of store footage used as selling space.

Fiscal year 2017 brought much success to AutoZone with 168 new domestic stores opening, an increase in commerical sales of 5.7%, and a record $10.9 billion in sales [1].

[1] Source: ww.phx.corporate-ir.net



PROPERTY OVERVIEW


AUTOZONE GROUND LEASE 2186 Bloomingdale Avenue | Valrico, Florida 33596 SITE PLAN

SUBJECT

AVAILABLE +/- 2.89 AC

+/- 154,718 SF

BLOOMINGDALE AVE

PENDINGLOI

PENDINGLOI

SITE PLAN

FUTURE RETAIL

+/- 154,718 SF

BLOOMINGDALE AVE

FUTURE RESIDENTIAL SITE

SUBJECT



FUTURE RESIDENTIAL SITE

AERIAL

SUBJECT



E LUMSDEN RD

BROOKER RD

LITHIA PINECREST RDDURANT RD

S MILLE

R R

D

BE

LL SHO

ALS R

D

JOH

N M

OO

RE

RD

S KIN

GS A

VE

BUCKHORN SPRINGS GOLF & COUNTRY CLUB

JC HANDLY SPORTS COMPLEX

26,000 ADT

19,000 ADT

BLOOMINGDALE HIGH SCHOOL

E BLOOMINGDALE AVE

KINGSWOOD ELEM. SCHOOL

BURNS MIDDLE SCHOOL

BROOKER ELEM. SCHOOL

BRANDON

VALRICO

BLOOMINGDALE REGIONAL PUBLIC

LIBRARYSUBJECT

AERIAL



PROPERTY PROFILE

LOCATION Bloomingdale Avenue Valrico, Florida 33596

NUMBER OF BUILDINGS One (1)

LAND AREA +/- 0.689 AC

FOLIO 087348-8752

ZONING New Sub Commercial

SCHOOL DISTRICT Hillsborough County

TAX DISTRICT U-Unincorporated

YEAR BUILT 2018



KEY LEASE TERMS


GUARANTOR AutoZone, Inc.

TERM Fifteen (15) years

LEASE EXECUTION DATE January 24, 2017

RENT COMMENCEMENT March 20, 2018 LEASE EXPIRATION March 30, 2033

PRIMARY TERM RENT Years 1 - 5 $65,000 Years 6 - 10 $71,500

Years 11 - 15 $78,650

OPTIONS TO RENEW Four (4) 5-year options

OPTION RENT Years 16 - 20 $86,515 Years 21 - 25 $95,167

Years 26 - 30 $104,683 Years 31 - 35 $115,151

ADDITIONAL RENT Tenant shall pay real estate taxes as additional rent. If not separately parceled, tenant shall pay their proportionate share of such taxes.

PROPORTIONATE SHARE Tenant's proportionate share shall be the sum of 100% of the amount of taxes assessed against demised premises and the portion determined by multiplying the total land value within applicable tax bill by a fraction, the numerator being the square footage of de-mised premises and the denomi-nator being the number of square feet of land contained in applica-ble tax bill.



KEY LEASE TERMS

MAINTENANCE OF Tenant shall maintain at its sole cost, the premises, including the PREMISES/COMMON parking area, curb cuts, landscaping, lighting, security, cleaning, AREA maintaining, repairing, replacing, and administering the interior and exterior, structural and nonstructural portions of the premises.

UTILITIES Tenant shall pay all utility expenses including snow removal, trash removal, signage costs, maintenance and service contract related costs, and landscaping costs.

LANDLORD Landlord shall maintain common areas in good order and MAINTENANCE condition, including necessary lighting, policing, cleaning, maintaining, repairing, and replacing. Landlord shall bear cost of liability insurance, utilities, taxes, snow removal, maintenance and service contracts, and tenant will pay their proportionate share of such costs to landlord.

PROPORTIONATE SHARE Tenant's proportionate share of common area expen-OF COMMON AREA ses shall be the percentage obtained by dividing theEXPENSES area of premises by the total area of property within the entire premises.

ASSIGNMENT Tenant may not assign or sublet the premises without written consent of landlord except to parents, affiliates or subsidiaries of tenant and entities resulting from mergers involving the foregoing. Notwithstanding any subletting or assignment, Tenant shall remain primarily liable for terms and conditions of lease.

TENANT'S Tenant shall maintain, at its sole cost, INSURANCE commercial general liability insurance with a $2,000,000 minimum limit per occurance and $2,000,000 aggregate for personal injury, death or property damage.

LANDLORD'S Landlord shall maintain commer- INSURANCE cial general liability insurance with minimum single limits of $2,000,000 for personal injury, death or property damage, with tenant named as additional insured.

KEY LEASE TERMSKEY LEASE TERMS



KEY LEASE TERMS

USE Tenant may use premises for the operation of retail store selling auto-motive parts, supplies and accessories, or, subject to landlord con-sent, any other lawful retail purpose so long as it does not violate any use restrictions.

PROTECTIVE During the term of the lease, provided tenant has not ceased to COVENANT operate for more than 180 consecutive days, landlord will not permit or consent to the use of any part of the premises as an auto parts store or for the sale of auto parts, supplies and accessories as its primary business.

USE RESTRICTIONS WENDY'S As long as Wendy's is open for business, landlord will not lease or sell to any other quick service drive-thru use if 18% or more of gross sales consist of hamburgers or chicken sandwiches.

CHICK-FIL-A Property may not be used or occupied as a restaurant selling or serving chicken as the principal menu item, meaning 25% or more of its gross sales come from the sale of chicken. This restric- tion does not apply to a full-service sit down restaurant.

WALMART No theater, bowling alley, billiard parlor, night club or other place of recreation or amusement, adult entertainment, or any business selling or serving alcoholic beverages for on-premises consumption, with the exception of a nationally or regionally recognized restaurant or sports bar chain in which less than 50% of gross receipts are from the sale of alcohol, shall be permitted within the outparcel tract without prior written consent of Walmart.


KEY LEASE TERMS


KEY LEASE TERMS



USE RESTRICTIONS STARBUCKS (CONTINUED) Landlord shall not lease to any other tenant for the primary business of the sale of (a) whole or freshly ground coffee beans, (b) espresso, espresso-based drinks or coffee-based drinks, (c) tea or tea-based drinks, or (d) gourmet, brand identified brewed coffee, and/or (e) blended coffee beverages. Other tenants may sell non-gourmet, non-brand identified brewed coffee or tea, or pre-bottled tea or tea-based beverages. TIJUANA FLATS Landlord shall not lease space to any future tenant for the primary principal and purpose of a restaurant specializing in TexMex or Mexican cuisine. Primary and principal purpose shall be defined as 30% or more of a tenant's annual gross sales are attributable to the sale of Tex-Mex cuisine.



SURROUNDING RETAIL



SURROUNDING COMPETITIVE RETAIL

14 13 12 11

10 9 81516

17

18

2

3 4

7

56

SUBJECT

Shoppes at Lithia

DOLLAR STORE VALRICO

1Bloomingdale Plaza

Bloomingdale SquareKing Row Shopping Center

Lithia Crossing



SHOPPING CENTER NAME CENTER SIZE NOTABLE TENANTS DRIVING DISTANCE FROM SUBJECT

SUBJECT AutoZone -

1 Walmart Supercenter +/- 146,976 SF Walmart Supercenter +/- 0.1 miles

2 Harbor Freight Tools +/- 90,446 SF Harbor Freight Tools, Dollar Store Valrico, Synergy Salon & Spa +/- 0.75 miles

3 KFC +/- 2,570 SF KFC +/- 935 feet

4 Verizon +/- 2,244 SF Verizon +/- 0.73 miles

5 Walgreens +/- 13,800 SF Walgreens +/- 0.67 miles

6 Shoppes at Lithia +/- 71,770 SF Publix, The UPS Stores, Edible Arrangements +/- 0.81 miles

7 Lithia Crossing +/- 163,144 SF Fresh Market, Stein Mart, Panera Bread, Chili's Grill & Bar +/- 0.81 miles

8 Advance Auto Parts +/- 7,500 SF Advance Auto Parts +/- 1.15 miles

9 Walgreens +/- 16,675 SF Walgreens +/- 1.2 miles

10 Bloomingdale Square +/- 276,181 SF Publix, Bealls, Hallmark, Ace Hardware, Pet Supermarket, Hallmark +/- 1.35 miles

11 CVS +/- 13,785 SF CVS +/- 1.91 miles

12 Burger King +/- 3,175 SF Burger King +/- 1.34 miles

13 Taco Bell +/- 3,750 SF Taco Bell +/- 1.35 miles

14 Tires Plus +/- 5,400 SF Tires Plus +/- 1.36 miles

15 Bloomingdale Plaza +/- 81,223 SF Winn-Dixie +/- 2.15 miles

16 King Row Shopping Center +/- 81,464 SF Big Lots, Family Dollar +/- 2,84 miles

17 CVS +/- 14,150 SF CVS +/- 2.89 miles

18 Walmart Neighborhood Market +/- 66,240 SF Walmart Neighborhood Market, Tuesday Morning +/- 3.0 miles

SURROUNDING COMPETITIVE RETAIL



MARKET PROFILE


AUTOZONE GROUND LEASE 2186 Bloomingdale Avenue | Valrico, Florida 33596 TAMPA MARKET PROFILE

The city of Tampa is the largest city in and county seat of Hillsborough County and the third largest city in Florida. Located on the west coast of Florida on Tampa Bay, it is approximately 200 miles northwest of Miami, 180 miles southwest of Jacksonville and 20 miles northeast of St. Petersburg. Tampa is part of the Tampa-St. Petersburg-Clearwater, Florida Metropolitan Statistical Area (MSA). The four-county area, with approximately 2.9 million residents, is the second largest MSA in the state and the fourth largest in the southeastern United States. The Greater Tampa Bay area has over 4 million residents and generally includes the Tampa and Sarasota metro areas.

In 2015, the region received numerous accolades, including: #1 Best Places to Retire (WalletHub), #2 Best Airport in the U.S. (Conde Nast Traveler), #4 Best American City for Sports Travel (Hotels.com and SeatGeek), #19 Best Small Business Cities (Biz2Credit), and #24 Best Cities to Find a Job (WalletHub).

Economy Tampa's economy is founded on a diverse base that includes tourism, agriculture, construction, finance, health care, government, technology, and the port of Tampa. Tampa Bay is home to 19 corporate headquarters with over $1 billion in annual revenue, eight of which are Fortune 1000 companies (including OSI Restaurant Partners, WelllCare, TECO Energy and Raymond James Financial). There are also nearly 500 foreign-owned companies representing over 40 nations in the region. Tampa was the number two city for real estate investment in 2014, according to the Tampa Business Journal. Tampa's port is the seventh largest in the nation and Florida's largest tonnage port. Tampa is second in the state behind Miami in terms of cruise ship travel with ports of call for three cruise lines.

Tampa is also a gateway to the Florida High Tech Corridor, a 23-county area that spans the state and is connected by three research universities, more than 20 local and regional economic development organizations, 14 community and state colleges, and six regional workforce boards.



The impact of tourism dollars in the area is undeniable. In 2014, visitors spent $35 billion in Hillsborough County; over 47,000 jobs, with associated incomes of $2.0 billion, were sustained by visitors; and tourism generated almost $330 million in state and local tax revenues. 20.8 million people visited Tampa in 2014, an increase of 6.2% over 2013, with the largest share of the visitor dollar (27%) being spent on food and beverage.

Employers MacDill Air Force Base, as the parent installation for over 15,000 active uniformed military, Department of Defense (DoD) civil service and DoD contractor personnel in the Tampa Bay area, is the area's largest employer. MacDill contributes $5 billion annually to the great Tampa Bay economy. Health care, retail, telecommunications and finance segments dominate the list of largest private employers.

WorkforceTampa Bay's well-educated and diverse population of over 4.3 million residents is a perfect complement to the robust and innovative industry activity within the communities of Tampa Bay. A diverse business climate, skilled workforce and entrepreneurial spirit contribute to the low cost of doing business in the Tampa Bay market, ranked in a recent KPMG business cost study as the nation's lowest cost large market for Corporate Services, International Financial Services and Shared Services - a testament to a strong business, financial and data services sector. Additionally, the Tampa Bay is ranked among the nation's top ten large metro areas for college-educated young talent on the move.

Higher EducationTampa Bay's commitment to excellence in education produces a well-trained workforce for employers. The Greater Tampa area is home to the main campus of the University of South Florida, with over 46,000 students, the University of Tampa, Hillsborough Southern Technical College, Hillsborough Technical Education Centers, St. Leo University and the Stetson University College of Law. The University of South Florida is ranked 50th in the nation for research expenditures.

Primary and Secondary EducationFlorida leads the nation in high school seniors taking Advanced Placement exams at nearly 50%. Florida also ranks sixth in the nation for the percentage of students who score a 3 or higher on the AP exam at 23.9%, compared to the national average of 18.1%. The Greater Tampa area is served by several public school systems, including ten districts, the largest of which is the Hillsborough County Public Schools District with 298 elementary, middle and high schools. Additionally, there are 437 private schools in the area.

TransportationInterstates 4, 75 and 274 are the major arteries throughout the Tampa Bay area. The Selmon Expressway runs from the community of Brandon through downtown Tampa near the convention center and the Amalie Arena and through South Tampa to its western end near MacDill Air Force Base. The Veterans Expressway links Tampa International Airport and the Westshore business district to surrounding communities. A strong highway infrastructure ensures an average commute time of only 26 minutes for residents of the county.

The area is served by 3 international airports, 14 general aviation airports and one military airfield. In 2015, the Tampa International Airport served nearly 17 million travelers annually and was ranked second in the J.D. Power and Associates customer satisfaction analysis for top airports in North America.

The Hillsborough Area Regional Transit Authority (HART), the region's public transit system, serves more than one million riders per month. HART operates local and express bus service in addition to the TECO Line Streetcar, a nostalgic link to Tampa's past.

Quality of LifeTampa Bay is packed with entertainment, cultural and leisure attractions for residents and visitors alike, including these popular attractions: Tampa's Lowry Park Zoo, Busch Gardens Tampa, Adventure Island, the Florida Aquarium, and Legoland Florida.

The area has a thriving arts and cultural community...from a variety of stage and performing arts venues and theaters to performing arts companies and organizations and popular nightlife districts. Area museums cover a wide array of subjects and studies and include the Museum of Science & Industry (MOSI), Tampa Museum of Art, the USF Contemporary Art Museum, the Tampa Bay History Center, the Tampa Firefighters Museum, the Henry B. Plant Museum, and the Ybor City Museum State Park. The permanently docked former World War II Victory Ship, the SS American Victory, is now used as a museum ship.

The city of Tampa and Hillsborough County operate more than 200 parks and beaches in the county.

Tampa is represented by teams in three major professional sports leagues: the National Football League, the National Hockey League and Major League Baseball. Tampa has hosted four NFL Super Bowls and the college football's Outback Bowl is played every New Year's Day at Raymond James Stadium.

SOURCES: Greater Tampa Chamber of Commerce, Greater Brandon Chamber of Commerce, Tampa Bay

Partnership, VisitTampaBay.com and Wikipedia.com.

TAMPA MARKET PROFILE



Population 3-Mile Radius

5-Mile Radius

2017 ESTIMATED POPULATION 72,972 180,929

2022 PROJECTED POPULATION 80,466 199,993

2010 CENSUS POPULATION 70,366 165,259

2000 CENSUS POPULATION 59,440 121,957

2017 MEDIAN AGE (YEARS) 40.3 38.1

Households

2017 ESTIMATED HOUSEHOLDS 25,895 66,202

2022 PROJECTED HOUSEHOLDS 27,553 70,629

2010 CENSUS HOUSEHOLDS 24,763 60,328

2000 CENSUS HOUSEHOLDS 20,455 44,130

Income

2017 EST. AVERAGE HOUSEHOLD INCOME

$106,107 $90,207

2017 EST. MEDIAN HOUSEHOLD INCOME

$85,278 $76,694

2017 EST. PER CAPITA INCOME $37,675 $33,045

HOUSEHOLD INCOME $75,000+ 54.7% 47.4%

MACDILL AIR FORCE BASE

$5 BILLIONECONOMIC IMPACT

65.4% $1-MILE RADIUS HOUSEHOLD INCOME$75,000+

$35 BILLIONTOURISM DOLLARS

DEMOGRAPHICS

Education 3-Mile Radius

5-Mile Radius

2017 HIGH SCHOOL GRADUATE 24.4% 25.3%

2017 SOME COLLEGE 20.9% 22.0%

2017 ASSOCIATE DEGREE ONLY 11.3% 10.7%

2017 BACHELOR DEGREE ONLY 24.5% 23.4%

2017 GRADUATE DEGREE 12.3% 11.5%

Daytime Demos

NUMBER OF BUSINESSES 1,560 5,358

TOTAL NUMBER OF EMPLOYEES 11,863 44,649

EMPLOYEE POPULATIONPER BUSINESS

7.6 to 1 8.3 to 1

RESIDENTIAL POPULATIONPER BUSINESS

46.8 to 1 33.8 to 1

ADJUSTED DAYTIME POPULATION 32,950 94,984

Consumer Expenditure

TOTAL RETAIL EXPENDITURE (2017) $905M $2.07B

TOTAL RETAIL EXPENDITURE(PER HOUSEHOLD PER MONTH)

$2,913 $2,607

82%1-MILE RADIUS

PROJECTED AVG. HH INCOME

INCREASEFROM 2000



CASTO is a privately held, vertically integrated real estate services company with 90-years of experience. Our portfolio includes retail, residential, office and industrial properties located throughout the eastern United States, including more than 21,670,000 square feet of retail space in 100+ commercial properties and nearly 4,000 apartments in 14 multi-family communities.

State Street Capital Realty is a team of investment sales professionals focusing on providing white-glove service to our clients. A division of CASTO, State Street Capital Realty has the market access, tenant knowledge and strong industry relationships to execute at the highest levels. Committed to excellence, we expertly leverage our extensive port-folio experience to maximize value for our corporate and investment clients’ real estate holdings.

Redstone Commercial is a fully integrated commer-cial real estate services company doing business in 14 states with a client portfolio that exceeds 5,000,000 square feet, with 1,430,000 square feet in Florida. Redstone Commercial has been in business for over 25 years with a lineage that dates back to 1955. Redstone has offices in Tampa, Florida and Youngstown, Ohio. Our core competency is built on achieving valued solutions for our diverse client base.

We take a holistic view of our client’s portfolio and implement a strategic system that best aligns with their goals. We focus on what makes your business tick and how we can add value based on what’s important to you. Our outlook on real estate, whether it is our own or if we are working on behalf of a third party, is simple. Every property is different and we pay attention to the important details and story behind every one of them to create a customized approach.

Inspired ideas. Integrated real estate solutions.

Acquisitions & DispositionsStephanie P. May BeaumierPHONE 614.744.3404FAX [email protected]

Molly BenadumPHONE 614.744.2017FAX [email protected]

William Wamble OFFICE 813.254.6200CELL 850.699.4777FAX 813.254.6225 [email protected]

Redstone Commercial1501 W. Cleveland Street Suite 200Tampa, Florida 33606www.redstonecommercial.comCASTO

250 Civic Center DriveSuite 500Columbus, Ohio 43215

PHONE 614.228.5331TOLL-FREE 1.888.400.0878FAX 614.469.8224 www.castoinfo.com

BROKERAGE PROFILES


Documents

AUTOZONE GROUND LEASE CONFIDENTIAL OFFERING … · 2186 Bloomingdale Avenue | Valrico, Florida 33596 Investment Summary PROPERTY ADDRESS 2186 Bloomingdale Avenue Valrico, Florida