AutoZone Tenant Overview


  • Corporate guaranteed
  • Investment grade tenant
  • Increases in primary term


  • NN leases make landlord responsible for roof and structure
  • Usually "B" grade real estate

Earnings Highlights

Earnings Summary
  • AutoZone reported Q3 2021 net sales of $3.7 billion, an increase of 31.4% from the third quarter of fiscal 2020
  • Operating profit increased 63.4% to $803.5 million
  • Net income for the quarter increased 73.9% over the same period last year, to $596.2 million

Tenant Description

AutoZone, Inc is a retailer and distributor of automotive replacement parts and accessories in the United States.

AutoZone is a strong net lease asset due to the corporate guarantee of every lease, lowering risk. AutoZone has a mix of NNN and NN leases. The NNN leases eliminate any landlord responsibility, making the AutoZone a steady income producing asset with little risk. The NN leases make the owner responsible for roof and structure, to balance this, the NN leases have higher rents.

On July 4, 1979, Auto Shack opened its first store in Forrest City, Arkansas and now, AutoZone is a Fortune 500 company and the leading auto parts retailer in the United States with more than $11.22 billion in annual sales.

While AutoZone is a retailer, its business seems reasonably well-insulated from the Amazon threat. Usually, people need car parts on short notice and don't know exactly what they need. So, going into the local AutoZone is much more convenient than trying to do it online without much hand-holding. The company's store count goes up every quarter and same store sales continue to be on an upward trajectory.

AutoZone sells auto and light truck parts, chemicals, and accessories through AutoZone stores in 49 US states plus the District of Columbia. As of August 31, 2019, Autozone operated 5,772 locations in the United States and opened 86 new stores.

AutoZone's core clients are generally do-it-yourselfers. US population and car production growth makes the business a winner for quite a while.

Average Cap Rate
12 mo avg with 10+ yr lease term
Average Property & Lease
Average Sale Price $1,800,000
NOI $100,800
$/Square Foot $257
Building SF 7,000
Lot Size 0.5 - 1.5 Acres
Lease Term 15 Years
Escalations 10% Every 5 Years & Options
Stock Symbol AZO
Credit Rating
Moody's Baa1
Average Cap Rate Trend
Rates reflect last 12 mos, short and long-term
Recent Sales Comps
San Bernardino, CA 5.15%
Avon, OH 5.21%
Cedar Hill, TX 5.53%
Gurley, AL 5.99%