AutoZone

• Nation’s Largest Auto Parts Retailer (NYSE: AZO): AutoZone is the largest retailer and distributor of aftermarket automotive parts and accessories in the U.S., operating 8,031 stores, including 6,863 in the U.S., and generating $20.3 Billion in net sales in fiscal 2026. That scale gives investors institutional-grade credit behind the lease.
• Investment-Grade Credit: AutoZone’s debt is rated investment grade by the major rating agencies, including a BBB rating from S&P and Baa1 from Moody’s. This supports long-term confidence in the tenant’s ability to perform through the remaining term and options.
• Continued Expansion: AutoZone opened 374 new stores in fiscal 2026, the most in a single year in company history, and grew annual net sales 7.4%. Ongoing investment in its store network reflects a business that is expanding, not contracting.
• Recession-Resilient, Non-Discretionary Category: Demand for maintenance and repair parts remains steady regardless of economic cycles, and because many repairs cannot be deferred, AutoZone is well positioned to manage rising supply chain and tariff costs. This provides a stable, e-commerce-resistant revenue base behind the rent.
• Aging Vehicle Fleet Supports Demand: The average light vehicle on the road is now 12.8 years old, with vehicles seven years or older making up roughly 43% of U.S. vehicles per AutoZone’s 10-K (S&P Global Mobility). As consumers keep cars longer, demand for maintenance and repair parts continues to rise.
• 20-Year Operating History with a Recent Option Exercise: AutoZone has operated at this location for 20 years and recently exercised its renewal option, extending the lease through October 31, 2031 with ±5 years of term remaining. The extension demonstrates the tenant’s commitment to the site after two decades of operation.
• Three 5-Year Renewal Options Remaining: The remaining options give investors the potential for tenancy through October 2046, providing a long runway of contractual income.
• 10% Rent Increases Every Five Years Throughout the Option Periods: Annual rent grows from $144,096 today to $158,508 in Option 2, $174,360 in Option 3, and $191,796 in Option 4, pushing the cap rate from 6.25% to 8.32%. Built-in escalations provide growth and a hedge against inflation.
• Fee Simple Ownership: The investor acquires full ownership of the land and building on a ±1.04-acre parcel.