ADVANCE AUTO PARTS - HAZLETON

[Pages:13]Offering Memorandum

ADVANCE AUTO PARTS - HAZLETON

239 W 22nd St ? Hazle Township, PA 18202

NON-ENDORSEMENT AND DISCLAIMER NOTICE

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. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. ? 2018 Marcus & Millichap. All rights reserved.

Non-Endorsement Notice

Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation's logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS. ADVANCE AUTO PARTS - HAZLETON Hazle Township, PA ACT ID Z0300627

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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.

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ADVANCE AUTO PARTS - HAZLETON

EXECUTIVE SUMMARY

Price Net Operating Income Capitalization Rate ? Current Price / SF Rent / SF Lease Type Gross Leasable Area Lot Size

OFFERING SUMMARY

$600,000 $46,800 7.80% $50.00 $5.00 Modified Gross 12,000 SF 0.74 acre(s)

Loan Amount Loan Type Loan to Value

Interest Rate / Amortization Annual Loan Payment Net Cash Flow After Debt Service Cash on Cash Return Total Return

FINANCING

$420,000 Financed - New Loan 70.00%

5.05% / 20 Years $33,401 7.44% / $13,399 7.44% 14.38% / $25,876

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MAJOR EMPLOYERS

EMPLOYER Integrity Stffing Slutions Inc HAZLETON ELEMENTARY/MIDDLE SCH Lehigh Valley Hospital Inc Hazleton Area Career Center Celadon Trucking Services Inc Walmart Bimbo Bakeries Usa Inc Quad Graphics Bradley Caldwell Inc Cargill Cocoa & Chocolate Inc Quad/Graphics Inc Mountain Cy Nrsing Rhblitation

# OF EMPLOYEES * 4,361 1,400 1,169 662 431 380 368 340 335 325 300 291

DEMOGRAPHICS

2018 Estimate Pop 2010 Census Pop 2018 Estimate HH 2010 Census HH Median HH Income Per Capita Income Average HH Income

1-Miles 3-Miles 14,156 39,697 14,222 40,013 5,501 15,320 5,502 15,383

$35,552 $39,396 $19,329 $20,759 $49,576 $52,734

5-Miles 51,621 52,065 20,342 20,434 $43,537 $23,372 $58,146

* # of Employees based on 5 mile radius

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ADVANCE AUTO PARTS - HAZLETON

INVESTMENT OVERVIEW

OFFERING SUMMARY

Marcus & Millichap is pleased to bring to market Advance Auto Parts, located at 239 W 22nd St, Hazleton, PA 18202. The subject property has 3.5 years left on the current lease term with (2) 2-Year Options Periods. In 2016, Advance Auto Parts acquired the business from it's competitor, that has operated from this location since 1978. Since the acquisition, the tenant has invested Hundred of Thousands of Dollars within the property, by way of installing new AC units, a security system, and fiber optic cables,. The building is 12,000 SF and situated on .74 acres. The lease is a modified gross lease with the Landlord paying for taxes and insurance, roof and HVAC.

Advance Auto is situated in a strong retail corridor just off of Route 309 & Route 940 in Hazelton, PA Other national brands operating in this area include CVS Pharmacy, McDonald's, Rite-Aide, Firestone Complete Auto Care, Sunoco Gas Station, Foodtown, Domino's, and Dunkin Donuts.

Hazleton is a city in Luzerne County, Pennsylvania, United States. The population was 25,340 at the 2010 census. Hazleton is the second largest city in Luzerne County and the seventeenth largest city in Pennsylvania. It was incorporated as a borough on January 5, 1857, and as a city on December 4, 1891. According to the United States Census Bureau, the city has a total area of 6.0 square miles, all of its land. Hazleton is located 12 miles (19 km) north of Tamaqua and 30 miles (48 km) south of Scranton/Wilkes-Barre. The city is located in Pennsylvania's ridge and valley section (on a plateau named Spring Mountain). Hazleton's highest elevation is 1,886 feet above sea level, making it one of the highest incorporated cities east of the Mississippi River and the highest incorporated city in Pennsylvania. It straddles the divide between the Delaware and Susquehanna River watersheds.

INVESTMENT HIGHLIGHTS

Advance Auto Parts | Investment Grade Credit, Rated BBB- by S&P 3.5 Years on the Lease Tenant has Invested Hundred of Thousands of Dollars into the Property Modified Gross Lease Building is 12,000SF on .74 Acres The locations is Distribution Hub to 8+ Advance Auto Parts given the industrial

component of the building

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Investment Highlights

? $100,000 + in Tenant Improvements ? Short-Term Lease with Value-Add Component ? Recently Renovated Roof & Parking Lot in 2017 ? Investment Grade Credit, Rated BBB- by S&P ? Industrial / Retail Component ? Tenant at Location Since 1978 ? Average Household Income Exceeds $50,000 within 5 Miles ? Highly Visible to 20,194 Cars/Day ? Along Route 309 & Route 940 Junction ? Distribution Hub to 8+ Advance Auto Parts ? Across from Rite-Aide & Sunoco Gas Station ? ? Mile to Church Hill Mall ? 1 Mile from Hazleton Regional Airport

Demographics

POPULATION

2010 Population 2017 Population 2022 Population

HOUSEHOLDS

2010 Households 2017 Households 2022 Households

INCOME

2017 Median Household Income 2017 Per Capita Income 2017 Average Household Income

1-MILES

14,223 14,157 14,043

5,505 6,197 5,424

$33,959 $18,338 $47,355

3-MILES

40,053 39,796 40,008

5-MILES

52,211 51,797 52,644

15,402 17,372 15,421

20,462 23,007 20,767

$37,827 $19,681 $50,298

$42,206 $22,090 $55,293

Investment Overview

Advance Auto Parts investment property with 3.5 years left on the current lease term with (2) 2-Year Options. Advance Auto Parts acquired the business of competitor that has operated from this location since 1978. Since the acquisition, the tenant has installed new AC units, security system, and fiber optic cables. A brand new parking lot has been paved, and the roof was coated 3 years ago. The building is 12,000 SF and is situated in a strong retail corridor just off of Route 309 & Route 940, about 40 miles from Scranton. Other national brands operating in this area include CVS Pharmacy, McDonald's, Rite-Aide, Firestone Complete Auto Care, Sunoco Gas Station, Foodtown, Domino's, and Dunkin Donuts. This is a modified net lease with no reimbursement from Tenant for taxes and insurance. The Tenant maintains the interior, non-structural portions of the property.

ADVANCE AUTO PARTS - HAZLETON PROPERTY SUMMARY

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NOTES

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OWNERSHIP: PUBLIC

TENANT: CORPORATE

WEBSITE:

Tenant Overview

Advance Stores Company, Inc., the major subsidiary of Advance Auto Parts, Inc. (NYSE: "AAP"), wholesales and retails automotive parts and maintenance items. In the retail segment, its stores offer a selection of brand name and proprietary automotive products for domestic and imported cars, and light trucks. These stores carry between 16,000 and 21,000 stock keeping units. Advance Auto Parts, Inc. is the largest North American retailer of automotive after-market parts, accessories, batteries and maintenance items primarily operating within the United States. Headquartered in Roanoke, VA, Advance Auto Parts, Inc. serves both the doit-yourself and professional installer markets. As of December 31, 2015, it operated 5,372 total stores and 111 distribution branches primarily under the Advance Auto Parts, Autopart International, Car- quest, and Worldpac trade names, as well as served approximately 1,325 independently-owned Car-quest stores in the United States, Canada, Puerto Rico, and the U.S. Virgin Islands.

5,372+

LOCATIONS

HEADQUARTERED IN

Roanoke, VA

$9.57

Billion

SALES VOLUME

STOCK SYMBOL

NYSE:

AAP

BBB-

STANDARD & POOR'S

CREDIT RATING

FOUNDED

1932

MORE THAN

74,000

TEAM MEMBERS

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