Tractor Supply Company

164 Lee Avenue, Pikeville, Kentucky 41501

Price: $4,672,130

Cap Rate: 6.30%

  • Initial Distribution Rate: 5.90%
  • Annual Rent: $294,478
  • Gross Leasable Area: 19,097 sq. ft.
  • Year Built: 2008

Tractor Supply Company is the largest operator of retail farm and ranch stores in the United States and has been operating since 1938. Over 1,175 stores are located in towns outside of major metropolitan markets and in rural communities in 45 states.

164 Lee Avenue, Pikeville, Kentucky

This Tractor Supply store is located in the largest commercial retail development in Pikeville, KY. The property is across from US Highways 23, 460, 119 and KY Highway 80 where an estimated 38,000 vehicles pass by daily.

Investment Overview

  • Tenant: Tractor Supply Company
  • Price: $4,672,130
  • Cap Rate: 6.30%*
  • Initial Distribution Rate: 5.90%*
  • Annual Rent: $294,478*
  • Gross Leasable Area: 19,097 sq. ft.
  • Lease Type: NN
  • Year Built: 2008
  • Lot Size: 63,461 sq. ft. (2.53 Acres)
  • Lease Term: 7/21/2008 – 7/31/2023
  • Renewal Options: 4 5-year options
  • Rental Increases: 10% every 5 years
  • Minimum Investment: $150,000

*Based on the 10% rental increase on 8/1/2013. Potential investors should review the Projected Cash-Flow, included as
Exhibit “C” in the Memorandum, prior to making any purchase decisions.

SITE OVERVIEW

This Tractor Supply store is located in the largest commercial retail development in Pikeville, KY. The property is across from US Highways 23, 460, 119 and KY Highway 80 where an estimated 38,000 vehicles pass by daily. This area draws retail and dining patrons from eastern Kentucky, western Virginia and West Virginia. Surrounding businesses include Walmart, Lowe’s, Food City, Staples, Applebee’s and over 25 other national and regional retailers. The City of Pikeville has recently approved a $5.0 Million bridge improvement project near the entrance to this development due to the high volume of traffic heading into this development from surrounding areas.

Property Highlights

Tenant:

  • Tractor Supply Company – the largest operator of retail farm and ranch stores in the United States
  • 1,176 Stores in 45 States*
  • Annual revenues of $4.7 Billion with over $1.0 Billion in shareholder equity*
  • Net income of $276 Million*
  • 45% revenue growth from 2009-2012

Location:

  • Located in Pikeville, KY – an economic and service center for eastern Kentucky
  • Across from US Highways 23, 460, 119 and KY Highway 80
  • Located in Pikeville’s largest retail development

Lease Terms:

  • Long-term net lease – 10 years remaining on initial term**
  • 10% rental increase every 5 years (next increase 8/1/2013 and 8/1/2018)
  • 6.62% average cap rate over remaining lease term**

Tenant Profile

Tractor Supply Company is the largest operator of retail farm and ranch stores in the United States and has been operating since 1938. Over 1,175 stores are located in towns outside of major metropolitan markets and in rural communities in 45 states. It is focused on supplying the lifestyle needs of recreational farmers and ranchers and serving the maintenance needs of those who enjoy the rural lifestyle as well as tradesmen and small businesses. Tractor Supply serves its market by offering a diverse retail product mix consisting of livestock and pet products, hardware and tools, lawn and garden items, gifts and toys, as well as clothing and footwear.

Tractor Supply is a growing company with a long term goal of opening 2,100 stores nationwide. Total revenues have grown by 45% from 2009-2012. As of December 29, 2012, Tractor Supply Company had total revenue of $4.7 Billion, shareholder equity of over $1.0 Billion, and net income of $276 Million.

ABOUT AEI

Founded in 1970, AEI is one of America’s oldest sponsors of net lease real estate investment programs and a leader in the TIC- 1031 exchange industry. AEI is a national source of high quality, commercial real estate for property owners engaged in 1031 tax-deferred property exchanges. AEI has specialized in developing, evaluating and purchasing these types of properties for more than 35 years and offers a portfolio of name-brand, net leased commercial retail properties.

Why come to AEI for your TIC or 1031 properties?

Exceptional service. If this is your first 1031 property exchange or TIC purchase, we make every effort to ensure that you fully understand the transaction. Our experienced professionals are available to assist you at each step.

Stability and quality. AEI offers quality, single tenant properties – freestanding real estate occupied by creditworthy corporate tenants under long-term net leases.

Acquisition expertise. AEI has performed institutional-grade due diligence on every property we own. Acquiring property from AEI can reduce this time-consuming, labor-intensive aspect of your property selection process and provide a higher level of expertise than you may be able to provide yourself.

Post-purchase services. After your property purchase is complete, AEI can provide the following services:

  • Accounting and distribution of rental income
  • Year-end 1099 forms for tax reporting
  • Assisting with any management concerns you may have about your property
  • Monitoring lease compliance, tax and insurance payments, and property maintenance by the tenant