This investment grade auto parts retailer remains strong, with astable credit-rating outlook and a growing market share. As a netlease retail property, AutoZone has benefited from adverse economicconditions as new car purchases remain low and auto owners perform"do-it-yourself repairs".

Possessing the highest credit rating among the top auto partsretailers allows AutoZone an ability to command a premium for theirnet lease sites. AutoZone has agreed to a number of different leasestructures, including ground leases and fee simple sales. Groundlease locations are commonly structured on a 15-year term, with 10%rental increases every 5 years. An AutoZone fee simple sale istypically structured with a 20-year triple net lease. Theprototypical design and footprint of an AutoZone is a rectangularbuilding (approx. 7,000 SF) situated on 0.80 - 1.15 acres of land.These parcels can provide future up-development opportunitydepending on location. Free standing AutoZone locations can be padsites within larger shopping centers, while other locations aresituated as independent mid-block land parcels. Since AutoZonestores are destination locations, they do not need to be Main &Main premier locations. This allows AutoZone to establish lowerrents and subsequent purchase prices just under $1M for groundleases and $1.5M - $2.5M for fee simple sites.

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Jonathan Hipp

Jonathan Hipp began his career in real estate over 25 years ago. In his early years as a broker, he ventured into the net lease industry and quickly began leading the US net lease market, closing over $3 billion in transactions. In 2005, Jon founded Calkain Companies, a company focused solely on net lease investment services. As President and CEO, he has been instrumental in building the firm into one of the leading Net Lease real estate companies, transacting over $12 billion of net lease deal volume over the past 13 years. He has expanded Calkain’s services to include brokerage, advisory, asset management, capital markets, and industry research. He has become a well-known resource, panelist, and speaker at various Net Lease and Industry conferences and is a regular contributor to GlobeSt.com on real estate trends. In June 2015, Jon’s passion for the real estate business was again recognized as he was nominated for the Top Real Estate Player in the DC area by SmartCEO magazine.

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