O’REILLY AUTO PARTS HUB STORE · 2019. 8. 14. · Shoreline, WA A • Recent Lease Extension – in 2016, tenant agreed to extend the lease early out to 12 years in addition to

Shoreline, WA

A

O’REILLY AUTO PARTSHUB STORE

SEATTLE, WASHINGTONRECENT 10-YR EXTENSION

ABSOLUTE NNN LEASESTRONG SALES

O’reilly auto parts

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BROKER OF RECORD Ken ReinschmidtLIC # 73743 (WA)

CONRAD SARREALSenior Associate

DIR (214) 692-2847MOB (626) 230-1006

[email protected] # 01982875 (CA)

CHAD KURZSVP & National Director

DIR (214) 692-2927MOB (562) 480-2937


Shoreline, WA

A

• Recent Lease Extension – in 2016, tenant agreed to extend the lease early out to 12 years in addition to incorporating a 8% increase.

• Rare Absolute NNN Lease – This is not one of O’Reilly’s standard NN lease with roof, structure, and sometimes parking lot responsibilities. Rather, there are zero landlord responsibilities because tenant is responsible for taxes, insurance, and all maintenance.

• Access to Store Performance – Adding to the rarity of the lease, the current lease grants the landlord with access to unit-level performance and this store last reported performing significantly above the national average (contact broker for more details).

• Dual Function Store – Not only is this a critical Hub store that provides inventory support to surrounding smaller stores, but it also serves as a small office for corporate employees.

• Retail Friendly Demographics – The 1-mile to 5-mile population ranges from 19k to nearly 300k residents with average household incomes between $102k to $117k+. That means Shoreline benefits from $34.5B of potential disposable income with 7%+ expected growth over the next 5 years.

• Extremely Rare Seattle Real Estate – There have been around only 20 national tenant sales in the Seattle MSA over the last 12 months. However, 0 of them were located within 12 miles of Downtown Seattle. This is 1 of only 5 national tenant deals available within that same 12-mile radius.

• Apartment Filled Corridor – Aurora Ave features 1,000+ apartment units within a 3-mile radius including the new construction ones Vale Apartments (163 units) across the street from subject property, Paceline Apartments (221 Units), and High Hill Apartments (33 Units)

• Dense Retail Thoroughfare – Aurora Ave also features a surplus of national retailers such as (2) Home Depots, Costco, Fred Meyer, Lowe’s, Safeway, LA Fitness, Walgreens, and countless eateries and financial services buildings.

• Pending Light Rail Station Nearby – Less than 2 miles away on the intersection of 185th and I-5, The City of Shoreline has begun executing on the plan to develop a Sound Transit light rail Station and either high or low density residential around it. The light rail plans to service the greater Seattle area from Everett all the way to Dupont, which is roughly a 80-mile distance.

• Highest Rated Tenant – O’Reilly Auto Parts who boasts strong S&P BBB credit is the tied for the highest rated tenant among its main competitors: AutoZone, Advance Auto Parts, and Napa Auto Parts. On top of that, their same store sales increased an impressive $559 Million to $9.5 Billion.

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

INVESTMENT HIGHLIGHTS

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PROPERTY OVERVIEW

TENANT SUMMARY

Tenant Name O'Reilly Auto Parts

Type of Ownership Fee Simple

Lessee Entity Corporate

Lease Type NNN

Roof and Structure Tenant Resposible

Term Remaining ±8.5 years

Original Lease Term 20 Years

Lease Commencement Date 2/1/98

Lease Expiration Date 1/31/28

Increases 8% Every 5 Years

Options 4,5-year

ANNUALIZED OPERATING DATA

Monthly Rent Annual Rent Rent/SqFt Cap Rate

Current - 01/31/2023 $20,676 $248,112 $15.25 4.75%

2/1/2023 - 01/31/2028 $22,330 $267,960 $16.47 5.13%

Option 1 $24,116 $289,397 $17.79 5.54%

Option 2 $26,046 $312,549 $19.22 5.98%

Option 3 $28,390 $340,680 $20.95 6.52%

Option 4 $30,945 $371,340 $22.83 7.11%

*Seller will credit Buyer the difference in rent between closing and the upcoming rent increase

18021 AURORA AVENUE NORTH, SHORELINE, WA


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List Price$5,223,000

Cap Rate4.75%

Lot Size±0.84 AC

GLA±16,265 SF

Year Built1959 / R 1985

NOI$248,112

D O W N T O W N S E A T T L E

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Property Name O’Reilly Auto Parts

Ownership Public

Revenue $9.5B

Net Income $1.3B

No. of Locations ± 5,219

No. of Employees ± 78,000

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 5,219 stores across some 47 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.

STRATEGYO’Reilly is a company dedicated to providing 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 hard work, enthusiasm, professionalism, teamwork, respect, and honesty.

Shoreline, WA

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AREA OVERVIEW

Shoreline is a city in King County, Washington north of Downtown Seattle bordering the northern Seattle city limits. The City of Shoreline offers classic Puget Sound beauty and the convenience of suburban living with the attractions of nearby urban opportunities. Shoreline is made up of 14 well-defined neighborhoods, each with its own character. Neighborhood volunteers create a sense of community in their neighborhoods by organizing social events, coordinating Shoreline Watch activities, implementing Neighborhood Mini-Grant projects, and more. From breathtaking views of Puget Sound to tennis, indoor swimming to nature trails and beach access to skateboarding, Shoreline’s more than 400 acres of park land and open space offer a variety of enriching recreation and outdoor experiences. The City recently invested $18.5 million to improve its parks, which include saltwater shoreline, a botanical garden, an interurban trail and hiking trails, and newly improved athletic fields, courts and playgrounds.

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Demographics

POPULATION 1 - MILE 3 - MILE 5 - MILE

2010 Census 17,525 108,350 264,257

2019 Estimate 19,393 119,323 295,334

2024 Projection 20,581 126,342 313,633

Growth: 2010-2019 10.66% 10.13% 11.76%

Growth: 2010-2019 6.13% 5.88% 6.20%

HOUSEHOLDS 1 - MILE 3 - MILE 5 - MILE

2010 Census 7,190 45,793 113,734

2019 Estimate 7,938 50,802 128,236

2024 Projection 8,429 53,976 136,640

Growth: 2010-2019 10.40% 10.94% 12.75%

Growth: 2010-2019 6.18% 6.25% 6.55%

INCOME 1 - MILE 3 - MILE 5 - MILE

Average Household Income $102,704 $110,857 $117,243

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Economy

economic developmentWith origins as a commercial and shipbuilding center and a gateway to Alaska, the Seattle area developed as a technology hub in the late 20th century with the establishment of Microsoft and internet retailer Amazon. Today, Seattle’s economy is driven by a mix of its older industrial companies and “new economy” internet technology companies. The stream of new software, biotechnology and internet companies has allowed Seattle to retain a strong economy and remain a hotbed for start-up businesses, especially in green building and clean technologies. Some of the largest employers include Microsoft, Amazon, Starbucks and Boeing.


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seattle msaThe Seattle Metropolitan area includes the three most populous counties- King, Snohomish, and Pierce - within the greater Puget Sound region. The Seattle Metropolitan Statistical Area has an estimated population of 3.7 Million. The Seattle MSA has a well-diversified local economy, strong demographic profile and significant long-term population growth, as well as a highly-educated employment base. The unemployment rate is below the national average with the job growth being above. And while sales tax is higher than average, there is no income tax. As some may know, Bill Gates started Microsoft in the state of Washington. In one year, Microsoft contributed $9.16 billion to the Washington state economy and provided 267,611 jobs to Washington residents. The well-known aerospace company Boeing also has quite an impact on the city. Also headquartered in Seattle, the jet-maker directly and indirectly contributed $70 billion to the local economy and generated $3.2 billion in wages in one year alone.


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Economy characteristics

12 $121,000FORTUNE 500 COMPANIES

383,688 3.7 MillionPOPULATION

IN LABOR FORCEPEOPLE IN THE REGION

Employer # of Employees

The Boeing Co. 81,919

Microsoft Corp. 43,031

University of Washington 30,200

Amazon.com Inc. 24,700

King County Government 13,400

Starbucks Corp. 11,239

Swedish Health Services 10,758

City of Seattle 10,080

Costco Wholesale Corp. 9,264

Nordstrom 8.982

Group Health Cooperative 7.271

MEDIAN HOUSHOLD INCOME

Shoreline, WA

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SeattleSeattle is an exciting urban city surrounded by unmatched natural beauty. The city is rich in culture and easy-going lifestyles, and it’s no accident that Seattle is the “Coffee Capital” of the United States with an espresso bar on almost every corner. In addition, the city boasts a magnificent mountain setting: to the east is the ice pyramid of Mount Rainier National Park, rising out of the Cascade Mountains, to the west, the partly snow-capped peaks of Olympic National Park.

A c c o l a d e s• #1 “2018’s Best Big Cities to Live in”• #1 “City in US to find a Job”• #2 “Top US Summer Destinations”• #3 “Top 10 Cities for Millenials”• #4 “Most Inclusive City in the Nation”• #7 “Best Places to Live”• #10 “Top 10 Most Popular Travel Destinations”

t o u r i s m b y t h e n u m b e r s

$762 Million

78,400

VISITOR GENERATED TAX REVENUE

JOBS SUPPORTED

40.9 Million

$7.8 Billion

2019 TOTAL VISITORS

2019 VISITOR EXPENDITURES

S u b j e c t P r o p e r t y


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PIKE PLACE MARKET

On the two floors of picturesque Pike Place Market, vendors offer a wide range of wares for sale. Fish, fruit, vegetables, and all sorts of odds and ends tantalize the taste buds and camera lenses. Market tours are an ideal way to tour Pike Place.

PACIFIC SCIENCE CENTER

SEATTLE GREAT WHEEL

The Pacific Science Center features five building of interactive science exhibits, a tropical Butterfly House, two IMAX theatres, a planetarium and laser light shows. The interactive programs reach more than 1.1 million people each year.

Aboard the iconic Seattle Great Wheel on Pier 57, visitors can see the city like never before. Each gondola can fit 8 people and provide an amazing ride that lights up the sky at night. With a height of 175 feet, it is the tallest Ferris Wheel on the West Coast.

SPACE NEEDLE

WOODLAND PARK ZOO

SAFECO FIELD

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

An icon of Seattle, the Space Needle stands at 605-ft-tall, at the Seattle Center, with an observation deck and a floating restaurant. Visitors can see everything from the snow-capped Cascade Mountains to the east and the Majestic Olympic mountain range.

A 92-acre facility with many threatened and endangered species from around the globe. The zoo was the first to create naturalistic exhibits, and its 300 different species range from Asian and African elephants to snow leopards, and grizzly bears.

Pristine and nostalgic are two characteristics that describe the home of the Seattle Mariners, Safeco Field. Safeco Field offers a number of exciting areas for fans. The Bullpen Market features interactive games and activities for fans.

MUSEUM OF POP CULTURE

The metallic, multihued, architectural undulation is a leading-edge, nonprofit museum, dedicated to the ideas and risk-taking that fuel contemporary popular culture. MoPOP serves as a gateway museum, reaching multi-generational audiences.

CHIHULY GARDEN AND GLASS

GAS WORKS PARK

There is force and unbelievable magic in Chihuly Garden and Glass located next to Seattle’s Space Needle. This is a display of rare pieces in Exhibition Hall, a glasshouse that showcases a suspended 100-foot long sculpture and an outside garden.

An unusual public park located on the site of a former coal gasification plant, Gas Works Park is the most popular park in Seattle. On the shores of Lake Union the 19-acre site houses an open-air play barn, and a maze of brightly painted machinery for children.


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Sea-Tac is the largest airport in the Pacific Northwest and just 12 miles south of downtown Seattle. In 2015 the Seattle airport handled 42,340,537 million passengers, a number that ranks as the top one in terms of passenger traffic for the airport. The airport is the largest generator of vehicle trips in the state and its 13,000-car parking garage is North America’s largest parking structure under one roof.

The Nation’s first full-scale commercial monorail system provides a fun, quick, and convenient link from Downtown Seattle to the Seattle Center Daily. Departing every 10 minutes, the one-mile trip takes just two minutes. This is a self-sufficient public transit system with a top speed of 45 mph. Originally built for the 1962 Seattle World’s Fair, today the annual ridership is over 2,000,000 million.

Link light rail is a light rail rapid transit system serving the Seattle metropolitan area in the U.S. state of Washington. It is managed by Sound Transit, in partnership with local transit providers, and consists of two disconnected lines: Central Link in King County, which travels for 20 miles between Seattle and Seattle–Tacoma International Airport; and Tacoma Link in Pierce County. Sound Transit plans to expand the Link light rail network to 116 miles and 70 stations by 2041.

g e t t i n g a r o u n d

SEATTLE-TACOMA INTERNATIONAL AIRPORT

SEATTLE CENTER MONORAIL

SOUND TRANSIT LIGHT RAIL


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Shoreline, WA

A

Confidentiality Agreement & DisclaimerThis Offering Memorandum contains select information pertaining to the business and affairs of O’Reilly Auto Parts located at 18021 Aurora Avenue North, Shoreline, WA (“Property”). It has been prepared by Matthews Real Estate Investment Services. 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 Real Estate Investment Services. 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; and3. You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or

its contents in any fashion or manner detrimentalto the interest of the Seller.

Owner and Matthews Real Estate Investment Services 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 Real Estate Investment Services 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.

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Shoreline, WA

A ™

BROKER OF RECORD Ken ReinschmidtLIC # 73743 (WA)

CONRAD SARREALSenior Associate

DIR (214) 692-2847MOB (626) 230-1006


CHAD KURZSVP & National Director

DIR (214) 692-2927MOB (562) 480-2937


SEATTLE, WASHINGTON

RECENT 10-YR EXTENSIONABSOLUTE NNN LEASE

STRONG SALES

Documents

O’REILLY AUTO PARTS HUB STORE · 2019. 8. 14. · Shoreline, WA A • Recent Lease Extension – in 2016, tenant agreed to extend the lease early out to 12 years in addition to