Auto & Brakes
Brick and mortar automotive businesses for sale are well established in the triple net lease real estate market. Investors seeking properties with a recession-proof business structure that retains its competitive edge through the surge of e-commerce stores emerging on the market will enjoy the long-term investment security that auto and brake real estate delivers.
Unlike many other businesses in the retail sector, auto and brake as a commercial property class retains stability during economic downturns, as more people make cost-conscious choices to complete maintenance and repairs on their own vehicles. During the pandemic, 12% of auto parts consumers began repairing their vehicles for the first time. In 2018, the automotive retail industry in the United States was valued at $75.31 billion. Projections for the future expect to see developments at a 1.8% compound growth rate leading up to 2025.
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Aging cars on the roads is one of the primary drivers of the sector’s steady growth across America. In 2020, the average age of cars and trucks on the road was 11.9 years, which is the ninth consecutive year the average has exceeded 11 years. This is the age vehicles typically require the greatest expenditures in repairs and maintenance, which is good news for the automotive parts industry. In Autozone’s 2020 fiscal report the company released a prognosis that the number of aging cars on the road is set to increase as Americans hang on to their vehicles for a longer period to save money. The forecast contributes to the future stability and lowered risk of this commercial real estate as a triple net lease investment option.
Properties
Auto and brake sites typically occupy land parcels ranging between 0.5-1.5 acres. Businesses are well-positioned with immediate frontage along highly trafficked roads and motorways and favorably visible street corners, which can see up to 60,000 vehicles passing nearby per day. Many auto and brake retailers strategically place stores in towns and cities undergoing rapid expansion. In some destinations, the customer base is anticipated to grow up to 11% in a period of five years.
A typical lease term duration is between 15-20 years, with renewal options available. This property class is well suited to long-term investors. Regular rental escalations of 5-10% every five years are typically included in the lease buffering property owners from the effects of economic fluctuations.
Tenants
We work with major auto-repair chains such as AutoZone Inc., and O’Reilly Automotive Inc. These two companies are the largest in the auto parts retail industry in the United States and hold the largest market share.
Autozone distributes and sells automotive parts and accessories for cars, light trucks, sport utility vehicles, and vans. The product range includes new and remanufactured automotive hardware, maintenance items, accessories, along with a sweep of other related automobile commodities. The company offers towing and tire repair services and sells automotive diagnostic and repair software under the umbrella of the ALLDATA brand.
AutoZone has around 6,000 stores in the United States, of which 49 domestic sites were opened in 2020. The enterprise holds a strong corporate establishment in Puerto Rico, Mexico, Brazil, and the District of Columbia. Producing around $14.6 billion in net sales in 2021, AutoZone anticipates an increase in demand for automotive parts as more people assume driving during the retreat from the global pandemic.
If you’re seeking a stable, mid to long-term passive investment, talk to the dedicated and committed team at Buy NNN Properties today to learn how automotive businesses for sale can help you reach your investment goals.
