In a market segment already facing difficulties prior to Coronavirus devastation, one retailer continues to be sound investment, O’Reilly Auto Parts. With a BBB S&P rating, continued sales increases and steady stock growth, a net leased O’Reilly property serves as an ideal investment.
O’Reilly Auto Parts was founded in 1957 with a humble store in Springfield, Missouri. Since then they have had sustained growth and currently have 5,512 stores in 47 U.S. states and 21 stores in Mexico. On top of the 5,533 stores, growth has not stopped. Per their planning room webpage, there are 126 approved locations, 16 locations in bidding stage, and 47 bids under review for corporate projects alone within last 2 years. These metrics represents only a drop in the bucket as it does not take into account the hundreds of projects headed by individual developers.
For these corporate O’Reilly locations, there are between one and four contractors bidding for the work.
Per COO Jeff Shaw on an earnings call a few months ago, “Our success has been built on the foundation of the O’Reilly culture of excellent customer service, and we remain very confident in our team’s ability to seize on growth opportunities as we expand into new markets.”
Countless O’Reilly’s developers and builders have told us that O’Reilly’s corporate is good to work with and that they will build/develop as many of these as they can get leased up.
Although automotive stores have been deemed essential by the government, O’Reilly’s is still taking appropriate precaution per a notice on their website from 4/10/2020;
“As communities continue to be impacted by the coronavirus (COVID-19), O’Reilly Auto Parts wants to share with you some of the steps we are taking to protect the health and safety of our customers and our O’Reilly team members, which is always our top priority. O’Reilly Auto Parts is an essential supplier to the communities we serve, as a key resource provider ensuring consistent and effective transportation for a wide range of industries, health care providers, emergency personnel, and consumers engaged in critical tasks, as well as meeting the automotive needs of everyday customers as they use their vehicles to meet basic needs, such as trips to the pharmacy or grocery store.
The Department of Homeland Security has designated auto repair facilities and auto parts suppliers as critical infrastructure industries, which serves as a guideline for local and state governments as they establish requirements within their own communities to balance safety and wellness with the critical need to ensure essential businesses and individuals have access to repairs, parts, and supplies needed to ensure critically needed transportation.
These government orders within your area may temporarily change the way you are able to shop for auto parts and supplies, but O’Reilly Auto Parts remains committed to doing everything we can to safely provide you excellent customer service, as we all face the challenges brought on by the COVID-19 virus. You will find additional detail below about how we will strive to provide you the critical parts you need in the safest way possible, whether through a modified in-store buying experience, online at OReillyAuto.com, or a combination of both through curbside service.
In our continued pursuit to provide for the health and safety of our customers and team members, O’Reilly has taken extensive actions based upon the evolving information and recommendations concerning transmission of COVID-19 issued by the Centers for Disease Control (CDC), World Health Organization (WHO), and other public agencies.”
From a growth standpoint, we have been told of a prudent moratorium on new leases to cope with local municipality building constraints and to maintain their level of efficiency. Despite the moratorium, builders are gung-ho to continue to churn out these successful stores.
O’Reilly leased properties continue to be key targets of large real estate investors and mom and pop 1031 exchange buyers alike.