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 net sales of $5.3 billion for its quarter ended August 27, 2022, an increase of 8.9% from Q4 of fiscal 2021
  • Operating profit increased 5.7% to $1.1 billion. Domestic same store sales, or sales for stores open at least one year, increased 6.2% for the quarter.
  • AutoZone Q4 same store sales increased 6.2%; Q4 EPS increased to $40.51; Annual sales of $16.3 billion

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
Trailing 12-month average
Average Property & Lease
Average Sale Price $2,145,800
NOI $83,316
$/Square Foot $270 - 310
Building SF 7,000 - 8,000
Lot Size 0.5 - 1.5 acres
Lease Term 15 years
Escalations 10% every 5 years and options
Stock Symbol AZO
Credit Rating
Moody's Baa1
Average Cap Rate Trend
Rates reflect year-over-year comparison
Recent Sales Comps
Apache Junction, AZ 5.00%
Ladys Island, SC 4.75%
Paradise, CA 6.39%