Investment Overview

The Tenant, AutoZone, Inc., recently executed a 15-year NNN Ground Lease that commenced in February 2025. AutoZone is paying an inexpensive rental rate of approximately $9 PSF, meanwhile nearby Southside Mall is quoting $30 PSF for comparable space. The lease features rental increases of eight percent (8%) every five years during the base term and in each of the three, five-year option periods, offering a nice hedge against inflation. The lease is corporately guaranteed by AutoZone, Inc. (NYSE: AZO), which is rated “BBB” by Standard & Poor’s and “Baa1” by Moody’s. The AutoZone site is located along the Susquehanna River on Route 23, which averages 15,554 VPD, directly across from a very high traffic Walmart Supercenter. The Walmart achieves 3.1M customer visits annually, per Placer.ai, which ranks in the top 8% of the entire U.S. chain and top 15% in the state of New York. It is the only Walmart Supercenter in a 25-mile radius making it a retail destination in a dominant commercial corridor in the region. In addition, the Walmart site is adjacent to the Southside Mall on the same side of Route 23, which contains retailers such as Dick’s Sporting Goods, T.J. Maxx, Petco, Michael’s, and Harbor Freight. Other notable retailers include a high performing Aldi, the 9th best Buffalo Wild Wings in the U.S., per Placer.ai, and a BJ’s Wholesale Club, in addition to McDonald’s, Panera Bread, Dollar Tree, and other various retailers and restaurants.