ADVANCE AUTO PARTS - HAZLETON

Offering Memorandum

ADVANCE AUTO PARTS - HAZLETON 239 W 22nd St • Hazle Township, PA 18202

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. © 2018 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.

ADVANCE AUTO PARTS - HAZLETON

Hazle Township, PA

ACT ID Z0300627

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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 $600,000

Net Operating Income $46,800

Capitalization Rate – Current 7.80%

Price / SF $50.00

Rent / SF $5.00

Lease Type Modified Gross

Gross Leasable Area 12,000 SF

Lot Size 0.74 acre(s)

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EXECUTIVE SUMMARY

OFFERING SUMMARY

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FINANCING

Loan Amount $420,000

Loan Type Financed - New Loan

Loan to Value 70.00%

Interest Rate / Amortization 5.05% / 20 Years

Annual Loan Payment $33,401

Net Cash Flow After Debt Service 7.44% / $13,399

Cash on Cash Return 7.44%

Total Return 14.38% / $25,876


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OFFERING SUMMARY

MAJOR EMPLOYERS

EMPLOYER # OF EMPLOYEES *

Integrity Stffing Slutions Inc 4,361

HAZLETON ELEMENTARY/MIDDLE SCH

1,400

Lehigh Valley Hospital Inc 1,169

Hazleton Area Career Center 662

Celadon Trucking Services Inc 431

Walmart 380

Bimbo Bakeries Usa Inc 368

Quad Graphics 340

Bradley Caldwell Inc 335

Cargill Cocoa & Chocolate Inc 325

Quad/Graphics Inc 300

Mountain Cy Nrsing Rhblitation 291

DEMOGRAPHICS

1-Miles 3-Miles 5-Miles

2018 Estimate Pop 14,156 39,697 51,621

2010 Census Pop 14,222 40,013 52,065

2018 Estimate HH 5,501 15,320 20,342

2010 Census HH 5,502 15,383 20,434

Median HH Income $35,552 $39,396 $43,537

Per Capita Income $19,329 $20,759 $23,372

Average HH Income $49,576 $52,734 $58,146

* # of Employees based on 5 mile radius


OFFERING SUMMARY

▪ 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

INVESTMENT HIGHLIGHTS

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 OVERVIEW

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Demographics

• $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 20,194Cars/Day

• Along Route 309 & Route 940 Junction

• Distribution Hub to 8+ Advance Auto Parts

• Across from Rite-Aide & Sunoco Gas Station

• ½ Mile to Church Hill Mall

• 1 Mile from Hazleton Regional Airport

Investment Highlights

POPULATION 1-MILES 3-MILES 5-MILES

2010 Population 14,223 40,053 52,211

2017 Population 14,157 39,796 51,797

2022 Population 14,043 40,008 52,644

HOUSEHOLDS

2010 Households 5,505 15,402 20,462

2017 Households 6,197 17,372 23,007

2022 Households 5,424 15,421 20,767

INCOME

2017 Median Household Income $33,959 $37,827 $42,206

2017 Per Capita Income $18,338 $19,681 $22,090

2017 Average Household Income $47,355 $50,298 $55,293

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.

Investment Overview

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PROPERTY SUMMARY

OFFERING SUMMARY

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NOTES


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OFFERING SUMMARY

Tenant Overview

Advance Stores Company, Inc., the major subsidiary of Advance Auto Parts,Inc. (NYSE: “AAP”), wholesales and retails automotive parts andmaintenance items. In the retail segment, its stores offer a selection ofbrand name and proprietary automotive products for domestic andimported cars, and light trucks. These stores carry between 16,000 and21,000 stock keeping units. Advance Auto Parts, Inc. is the largest NorthAmerican retailer of automotive after-market parts, accessories, batteriesand maintenance items primarily operating within the United States.Headquartered in Roanoke, VA, Advance Auto Parts, Inc. serves both the do-it-yourself and professional installer markets. As of December 31, 2015, itoperated 5,372 total stores and 111 distribution branches primarily underthe Advance Auto Parts, Autopart International, Car- quest, and Worldpactrade names, as well as served approximately 1,325 independently-ownedCar-quest stores in the United States, Canada, Puerto Rico, and the U.S.Virgin Islands.

5,372+LOCATIONS

HEADQUARTERED IN

Roanoke, VA

MORE THANFOUNDED

1932 74,000TEAM MEMBERS

$9.57Billion

SALES VOLUME

STOCK SYMBOL

AAPNYSE:

STANDARD & POOR’S

CREDIT RATING

BBB-

OWNERSHIP:

PUBLIC

TENANT:

CORPORATE

WEBSITE:

www.advanceautoparts.com

http://www.advanceautoparts.com/

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239 W 22nd St, Hazle Township, PA 18202

LOCATION OVERVIEWTENANT SUMMARYPRICING AND VALUATION MATRIX

PROPERTY NAMEADVANCE AUTO PARTS - HAZLETON

PRICING AND VALUATION MATRIX

PROPERTY NAMEADVANCE AUTO PARTS - HAZLETON

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REGIONAL AND LOCAL MAP

AERIAL PHOTO


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MARKET OVERVIEW

OVERVIEW

SCRANTON

The Scranton metro is located in the Appalachian mountains of northeast

Pennsylvania roughly 120 miles northwest of New York City and 125

miles north of Philadelphia. The metro encompasses Luzerne,

Lackawanna and Wyoming counties and is also known as the Wyoming

Valley. The region has diversified from its coal mining roots. Now many

people move to the Valley to take advantage of the lower cost of living

and commute into New Jersey and New York City for employment. The

most populous city is Scranton with 76,400 people.

▪ The vast infrastructure network provides for a large manufacturing and distribution base. Hershey,

Amazon, Pride Mobility Products, and Bemis are some of the many firms located in the region.

▪ A number of the area’s biggest employers are healthcare providers including Wyoming Valley Health

Care System, VA Medical Center, Wilkes-Barre Hospital and Mercy Health Partners.

▪ The metro receives economic benefits from back-office operations of major companies, including

Bank of America, PC Data Centers and Cigna Health and Life Insurance Co.

▪ Access to the Marcellus Shale formation provides a large supply of natural gas at a relatively

affordable price.

DEMOGRAPHICS

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ECONOMY

METRO HIGHLIGHTS

* Forecast

Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Moody’s Analytics; U.S. Census Bureau


STRATEGIC LOCATIONSituated at the crossroads of Interstates 81, 84, 380 and 476, the metro has easy

transportation access to a large portion of the nation’s population, which is growing a

logistics and distribution sector.

DIVERSIFYING ECONOMYOnce based in mining, the metro has expanding industries that include food and

beverage manufacturing; defense and security; back-office operations, healthcare and

distribution/logistics.

LOWER LIVING COSTSA median home price, which is well below the national median, and lower natural gas

prices contribute to more affordable living expenses.

561K

2017POPULATION:

229K

2017HOUSEHOLDS:

42.9

2017MEDIAN AGE:

$47,300

2017 MEDIAN HOUSEHOLD INCOME:

U.S. Median:

37.8U.S. Median:

$56,3001.0%

Growth2017-2022*:

0.3%

Growth2017-2022*:

Income

In 2017, the median household income for your selected geography is

$33,959, compare this to the US average which is currently $56,286.

The median household income for your area has changed by 12.47%

since 2000. It is estimated that the median household income in your

area will be $40,356 five years from now, which represents a change

of 18.84% from the current year.

The current year per capita income in your area is $18,338, compare

this to the US average, which is $30,982. The current year average

household income in your area is $47,355, compare this to the US

average which is $81,217.

Population

In 2017, the population in your selected geography is 14,157. The

population has changed by 8.55% since 2000. It is estimated that the

population in your area will be 14,043.00 five years from now, which

represents a change of -0.81% from the current year. The current

population is 48.18% male and 51.82% female. The median age of the

population in your area is 37.94, compare this to the US average

which is 37.83. The population density in your area is 4,498.55 people

per square mile.

Households

There are currently 5,464 households in your selected geography. The

number of households has changed by -4.44% since 2000. It is

estimated that the number of households in your area will be 5,424

five years from now, which represents a change of -0.73% from the

current year. The average household size in your area is 2.52

persons.

Employment

In 2017, there are 4,091 employees in your selected area, this is also

known as the daytime population. The 2000 Census revealed that

53.38% of employees are employed in white-collar occupations in this

geography, and 46.52% are employed in blue-collar occupations. In

2017, unemployment in this area is 8.43%. In 2000, the average time

traveled to work was 20.00 minutes.

Race and Ethnicity

The current year racial makeup of your selected area is as follows:

59.75% White, 4.18% Black, 0.05% Native American and 0.92%

Asian/Pacific Islander. Compare these to US averages which are:

70.42% White, 12.85% Black, 0.19% Native American and 5.53%

Asian/Pacific Islander. People of Hispanic origin are counted

independently of race.

People of Hispanic origin make up 52.51% of the current year

population in your selected area. Compare this to the US average of

17.88%.

PROPERTY NAME

MARKETING TEAM


Housing

The median housing value in your area was $98,903 in 2017, compare

this to the US average of $193,953. In 2000, there were 3,606 owner

occupied housing units in your area and there were 2,111 renter

occupied housing units in your area. The median rent at the time was

$346.

Source: © 2017 Experian

DEMOGRAPHICS

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ADVANCE AUTO PARTS - HAZLETON

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