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NORTHERN CALIFORNIA NEWS
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NoCal O’Reilly Auto Parts Store Sells for $2.8 Mil

4/06/16

A single-tenant, corporate-leased O'Reilly Auto Parts store in the NoCal city of Oakley traded for $2.82 mil, or about $350/sf. Oakley is situated about midway between Oakland and Stockton in Contra Costa County.

Built in 1981, the 8k sf store is located on .78 acres at the signalized-hard corner at 100 E. Cypress Rd, at the intersection with Main St. The O’Reilly Auto Parts store had over 11 years remaining on the primary lease term with increases every five years with options to extend.

Jeremy McChesney with Hanley Investment Group represented the seller. The buyer, local private investor, was repped by Dan Diehl of Keller Williams Realty. The deal closed with a a cap rate of 5.25%.

“O’Reilly Auto Parts elected to execute a 10-year lease extension two years prior to the lease expiration date, speaking to the strength of this location,” said McChesney. "The auto parts store category continues to do well as many Americans are holding onto their cars longer," said McChesney. "The average age of cars and light trucks in operation in America is now 11.5 years, according to a study by IHS Automotive. Although new car sales of increased since the recession, IHS forecasts that the average age of vehicles is expected to rise to 11.7 years by 2018.”

McChesney has sold 16 auto parts stores in the last two years and expects that transaction volume in the auto parts sector should remain strong through 2016 as investors have a positive outlook of the fundamentals of the auto parts industry. “Existing properties with extensive history and newly-minted long-term leases should continue to be in the highest demand,” McChesney noted.

“Auto parts store properties with shorter lease terms located in areas with strong real estate fundamentals also remain in high demand," McChesney added. "Investors recognize that auto parts store locations have residual value as they are typically constructed as vanilla boxes which are easier to re-tenant in the event the tenant vacates.”






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