pep boys scottsdale -...

Offering Memorandum

PEP BOYS SCOTTSDALE6828 E Thomas Rd • Scottsdale, AZ 85251

N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E

Confidentiality and DisclaimerThe 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. Â© 2017 Marcus & Millichap. All rights

reserved.

Non-Endorsement NoticeMarcus & 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.

PEP BOYS SCOTTSDALE

Scottsdale, AZ

ACT ID Y0070417

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N E T L E A S E D D I S C L A I M E R

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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OFFERING SUMMARY

Price $1,938,545

Net Operating Income $106,620

Capitalization Rate – Current 5.50%

Price / SF $290.11

Rent / SF $15.96

Lease Type NN

Gross Leasable Area 6,682 SF

Year Built / Renovated 1981

Lot Size 0.71 acre(s)

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EXECUTIVE SUMMARY

OFFERING SUMMARY

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FINANCING

Down Payment All Cash

Net Cash Flow 5.50% / $106,620

Cash on Cash Return 5.50%

PEP BOYS SCOTTSDALE

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PEP BOYS SCOTTSDALE

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OFFERING SUMMARY

MAJOR EMPLOYERS

EMPLOYER# OF EMPLOYEES

*

Office of The President 6,500

Associated Insur Co For Excess 5,003

Asu Librarys 5,000

SALT RIVER PROJECT 4,336

Standard Aero Holdings Inc 3,500

Parks Scottsdale & Recreation 3,374

Honorhealth 3,001

AVNET 2,800

City of Scottsdale Municipal P 2,771

Scottsdale Ecnmic Vtlty The Cy 2,410

Police Department 2,396

Chase Bankcard Services Inc 2,300

DEMOGRAPHICS

1-Miles 3-Miles 5-Miles

2017 Estimate Pop 17,420 106,134 250,225

2017 Census Pop 16,206 97,183 226,933

2017 Estimate HH 8,136 50,779 108,074

2017 Census HH 7,594 46,421 98,526

Median HH Income $49,686 $49,387 $44,911

Per Capita Income $33,186 $35,944 $32,008

Average HH Income $70,694 $74,965 $72,539

* # of Employees based on 5 mile radius

PEP BOYS SCOTTSDALE

OFFERING SUMMARY

Strongest Pep Boys Guarantee - The Pep Boys - Manny, Moe & Jack of CA

Recent Lease Extension and Property Remodel - Just Under Ten Years Remaining

3% Annual Increases in Years 1-5 - 10% Increases in Year 6 and in Option

Visible To 38,000 +/- Cars Per Day Along E Thomas Rd and N 68th St

Infill Location - 250k+ People in Five-Mile Radius

Affluent South Scottsdale Location - $75k Average Income in Three-MIle Radius

INVESTMENT HIGHLIGHTS

The subject property is well-located along East Thomas Road between 68th Street and Scottsdale Road in the heart of South Scottsdale. Pep Boys recently assumed and

extended the current lease, which now has just under 10 years of firm term remaining, 3% annual increases in years 1-5, a 10% Increase in Year 6, and a 10% increase in

the one remaining five-year option period. The lease is an absolute triple net lease, subject only to a carve-out for repairing structural damage to slab and bearing walls

and a thirty day right of first refusal to any purchase. Surrounding retailer's include Burger King, Domino's, Streets of New York, Valero, Shell, Chase, Panda Express,

O'Reilly, Aaron's, Bowlmor, YouFit, Albertsons, Chipotle, Smashburger, Starbucks, Circle K McDonald's, Taco Bell, etc.

The property has been kept in immaculate condition throughout its 10+ year operating history and recently underwent intensive maintenance and renovation. The roof was

recoated, the parking lot and curbs were restriped and repaired, and the restrooms, lighting and shop space were brought up to code and refreshed. Pep Boys also

recently converted the property to its updated branding with new paint and signage.

Adjacent to the Greater Phoenix Area, Scottsdale is known as the Wests most Western town and was described in the New York Times as a desert version of Miamis

South Beach. The tourism industry is Scottsdales primary employer, accounting for 39% of the citys workforce. The regions year-round warm weather and abundant

sunshine is a major factor in Scottsdales tourism appeal.

Scottsdale is home to one of the most visited malls in the country, Scottsdale Fashion Square, as well as the San Francisco Giants Training Center and SkySong. SkySong

is Arizona State Universitys (ASU) 1.2 million SF mixed-use development located on a 42-acre campus in Scottsdale, three miles from ASUs Tempe campus. SkySong is

home to a diverse business community that links technology, research, education and entrepreneurship to position ASU and Greater Phoenix as global leaders in the

knowledge economy.

INVESTMENT OVERVIEW

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TENANT SUMMARY

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Fiscal Year Ended December 31, 2016

The Pep Boys – Manny, Moe and Jack of CA (a Carl Icahn Company)

PARENT CREDIT

RATING: C2www.fdreports.com | www.creditntell.com | March 31, 2017

PRICING AND VALUATION MATRIX

PROPERTY NAMEPEP BOYS


PROPERTY NAMEPEP BOYS

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TENANT SUMMARY

Parent General Information

Address767 Fifth Avenue 47th Floor , New York, New York, 10153, United States

Phone (212) 702-4300

Store Base

Store Count 1,000+

Headquarters 3111 West Allegheny Avenue, Philadelphia PA

CEO Dan A. Ninivaggi

Parent Key Personnel

Chairman Carl Icahn

President & CEO Keith Cozz

Chief Financial Officer SungHwan Cho

Parent Financial Markets

Stock Ticker IEP

Current Price 57.40 as of 2/3/18

52 Week High/Low $59.91 / $47.06

Today the company operates more than 9,000 service bays in approximately 1,000 locations in 35 states and Puerto Rico. At the same time, in some of its traditional supercenters, the company has expanded to include “Speed Shops” within its retail stores, which cater to the growing number of car enthusiasts who have fun working on performance cars, like hot rods, “muscle cars” and off‐road trucks.

In 2012, Pep Boys created a new service and retail customer experience, which it refers to as “The Road Ahead. ” Similar to the experience found at some high‐end car dealerships, new Pep Boys stores feature customer lounges with amenities such as complimentary Wi‐Fi and flat screen TVs near its full‐service maintenance and repair shops, as well as the most diverse retail product assortment in the automotive aftermarket. With almost 20,000 friendly and knowledgeable associates living the legacy of Manny, Moe & Jack, Pep Boys’ vision is to be the best place to shop and care for your car.

Since a 2016 acquisition, Pep Boys is owned by Icahn Automotive Group LLC, which was formed by its parent, Icahn Enterprises L.P., to invest in and operate businesses involved in aftermarket parts distribution and service.

‐ www.pepboys.com ‐

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CLOSE PROXIMITY TO:

6828 E Thomas Rd, Scottsdale, AZ 85251

Recently Extended 10 Year Lease

National Brand Recognition

Strongest California Entity Guarantee

Strong South Scottsdale Location

10 Year Historical Occupancy as Auto Use

Large Parcel and Building

The subject property is well located in South

Scottsdale and consists of a 6,682 sqft building

on .71 acres. The Pep Boys - Manny, Moe &

Jack of California recently signed an extended

10 year lease with increases.

LOCATION OVERVIEWTENANT SUMMARYPRICING AND VALUATION MATRIX

PROPERTY NAMEPEP BOYS SCOTTSDALE



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LOCATION OVERVIEW

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6828 E Thomas Rd, Scottsdale, AZ 85251





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REGIONAL AND LOCAL MAP

AERIAL PHOTO

PEP BOYS SCOTTSDALE

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PROPERTY PHOTO

PEP BOYS SCOTTSDALE

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PROPERTY SUMMARY

OFFERING SUMMARY

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NOTES: Current rent and price above are based on December 1, 2018 3% increase

Seller to credit buyer amount of difference in rent between COE and December 1, 2018

PEP BOYS SCOTTSDALE

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OFFERING SUMMARY

SURROUNDING PROPERTY PHOTOS

PEP BOYS

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MARKET OVERVIEW

PHOENIXOVERVIEW

The Phoenix metro consists of Maricopa and Pinal counties, and it

includes more than 30 incorporated and more than 30 unincorporated

towns and cities. The region is hemmed in by mountains to the north

and east. American Indian reservations to the east and south limit

development in those directions, leaving the southeastern corridor and

western half of the metro as the primary growth areas. The largest city

is Phoenix, which encompasses about 520 square miles, is the capital

city and boasts a population of nearly 1.6 million. Interstate 10 is a

major trucking route directly connecting the region to Southern

California, which is supporting a growing distribution industry. Various

rail and air lines connect the metro nationally.

MARKET OVERVIEW

METRO HIGHLIGHTS

EMPLOYMENT GROWTH

Job gains will increase faster than the national rate

during the next five years, drawing new residents to

the metro.

HIGH-TECH MANUFACTURING BASE

Intel Corp., Motorola Inc., Honeywell and others

have large Phoenix operations, attracting additional

companies serving these corporations.

ACTIVE TOURISM INDUSTRY

Warm winters and amenities including golf courses

and resorts attract vacationers.

PEP BOYS SCOTTSDALE

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MARKET OVERVIEW

ECONOMY Phoenix claims multiple Fortune 500 headquarters, including Freeport-McMoRan, Republic

Services, Insight Enterprises, Avnet and PetSmart.

The construction, high-tech manufacturing, healthcare and tourism industries dominate the

Phoenix economy.

Healthcare is a critical industry, with around 20 hospitals and the UA medical school

located in the metro. Also, the Mayo Clinic has added multiple facilities located throughout

the metro.

SHARE OF 2016 TOTAL EMPLOYMENT

MAJOR AREA EMPLOYERS

Banner Health

JPMorgan Chase & Co.

Arizona State University

Wells Fargo

Intel Corp.

Honeywell Aerospace

Fry’s

American Airlines

Bank of America

Wal-Mart* Forecast

MANUFACTURING

6%GOVERNMENT

HEALTH SERVICES

EDUCATION AND

+OTHER SERVICES

3%

LEISURE AND HOSPITALITY FINANCIAL ACTIVITIES

20%

AND UTILITIES

TRADE, TRANSPORTATION CONSTRUCTION

PROFESSIONAL AND

BUSINESS SERVICES

2%INFORMATION

17%

6%

12% 11% 9%

15%

PEP BOYS SCOTTSDALE

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MARKET OVERVIEW

DEMOGRAPHICS

SPORTS

EDUCATION

ARTS & ENTERTAINMENT

The metro is expected to add almost 500,000 people through 2021, resulting in the

formation of nearly 170,000 households.

A median home price of nearly $243,000 has afforded 62 percent of households to

own a home, which is slightly below the national homeownership rate.

Roughly 28 percent of people age 25 and older hold bachelor’s degrees and 10

percent also obtained a graduate or professional degree.

Phoenix offers a lower cost of living than other metros its size, a moderate climate and a

variety of recreational and cultural options. In addition to outdoor activities, sports

enthusiasts can enjoy one of the most complete lineups of major-league teams found in

any city, including teams in all four major sports. The Cactus League holds spring training

baseball throughout the Valley, and the area has numerous golf courses and tennis courts.

Phoenix is home to the world-famous Heard Museum and Frank Lloyd Wright’s Taliesin

West. Music venues include Phoenix Symphony Hall and the Orpheum Theatre. Higher-

education institutions include Arizona State University, Grand Canyon University and

community colleges.

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2016MEDIAN AGE:

U.S. Median:

37.7

$54,200

2016 MEDIAN HOUSEHOLD INCOME:

U.S. Median:

$54,500

4.6M

2016POPULATION:

Growth2016-2021*:

9.9%

1.7M

2016HOUSEHOLDS:

9.9%

Growth2016-2021*:

QUALITY OF LIFE

2016 Population by Age

0-4 YEARS

7%5-19 YEARS

21%20-24 YEARS

7%25-44 YEARS

27%45-64 YEARS

24%65+ YEARS

14%

* Forecast

Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s

Analytics; U.S. Census Bureau

PEP BOYS SCOTTSDALE

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MARKETING TEAM

Source: © 2015 Experian

PROPERTY NAME

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CREATED ON FEBRUARY 5, 2018





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DEMOGRAPHICS

1 Miles 3 Miles 5 Miles

POPULATION

2022 Projection 17,475 106,135 252,043

2017 Estimate 17,420 106,134 250,225

2010 Census 16,206 97,183 226,933

2000 Census 17,467 103,254 229,189

INCOME

Average $70,694 $74,965 $72,539

Median $49,686 $49,387 $44,911

Per Capita $33,186 $35,944 $32,008

HOUSEHOLDS

2022 Projection 8,243 51,692 111,714

2017 Estimate 8,136 50,779 108,074

2010 Census 7,594 46,421 98,526

2000 Census 7,838 47,153 97,698

HOUSING

2017 $247,164 $256,584 $261,624

EMPLOYMENT2017 Daytime Population

18,221 143,512 427,196

2017 Unemployment

2.98% 3.40% 4.54%

2017 Median Time Traveled

23 22 22

RACE & ETHNICITY

White 80.00% 79.41% 72.35%

Native American 0.22% 0.15% 0.20%

African American 3.52% 3.57% 5.06%

Asian/Pacific Islander

1.91% 2.51% 3.67%

MARCUS & MILLICHAP CAPITAL CORPORATION

CAPABILITIES

MMCC—our fully integrated, dedicated financing arm—is committed to providing superior capital market expertise, precisely managed execution, and unparalleled access to capital sources providing the most competitive rates and terms.

We leverage our prominent capital market relationships with commercial banks, life insurance companies, CMBS, private and public debt/equity funds, Fannie Mae, Freddie Mac and HUD to provide our clients with the greatest range of financing options.

Our dedicated, knowledgeable experts understand the challenges of financingand work tirelessly to resolve all potential issues to the benefit of our clients.

National platform

operating

within the firm’s

brokerage

offices

$5.1 billion

total national

volume in 2016

Access to

more capital

sources than

any other firm

in the industry

Optimum financing solutions

to enhance value

Our ability to enhance

buyer pool by expanding

finance options

Our ability to enhance

seller control

• Through buyer

qualification support

• Our ability to manage buyers

finance expectations

• Ability to monitor and

manage buyer/lender

progress, insuring timely,

predictable closings

• By relying on a world class

set of debt/equity sources

and presenting a tightly

underwritten credit file

WHY MMCC?

Closed 1,651

debt and equity

financings

in 2016

ACQUISITION FINANCING

PEP BOYS SCOTTSDALE

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