National Tire and Battery Auto Parts is owned by TBC Corporation, which has been in business since 1956 and is the nation’s largest independent marketer of automotive replacement tires.
The market for net-leased National Tire and Battery Auto Parts properties remains strong as investors are attracted to new development of investment-grade tenanted properties. What is most attractive about NTB Investment property is one of the longest lease lengths of corporate tenants. There are limited property options for private real estate buyers seeking investment-grade companies with new twenty-five-year leases. Therefore, this is a very attractive asset in the current market.
Investing in National Tire and Battery: A Compelling Net Lease Opportunity
National Tire and Battery (NTB) is a leading automotive aftermarket services company that operates over 700 retail locations across the United States, the majority of which are net lease properties. With a proven business model, strong credit profile, impressive sales figures, and promising growth prospects, NTB presents an attractive net lease investment opportunity for those seeking exposure to the auto parts and services industry.
Net Lease Portfolio and Credit Quality A key strength of NTB as an investment is its extensive portfolio of net lease properties. Under these long-term agreements, NTB is responsible for operating costs such as property taxes, insurance, and maintenance, while the landlord provides the physical space. This arrangement provides NTB with operational flexibility and predictable occupancy costs.
Furthermore, NTB enjoys an investment-grade credit rating of Baa2 from Moody’s and BBB from S&P, reflecting its robust financial health and ability to meet its lease obligations. This strong credit profile enhances the stability and reliability of NTB’s rental income streams, making it an attractive net lease tenant for landlords.
Robust Sales and Financial Performance NTB has consistently delivered impressive sales figures and solid financial results, reflecting the strength of its operations and the resilience of its business model. In its latest fiscal year, the company reported revenue of $1.23 billion, representing a 6.2% increase from the previous year. This growth was driven by a combination of new store openings, increased same-store sales, and strategic acquisitions.
Furthermore, NTB’s operating margins have remained healthy, with an operating margin of 12.1% in the most recent fiscal year. This profitability is supported by the company’s emphasis on operational efficiency, cost control measures, and its ability to leverage economies of scale as it expands its footprint.
Compelling Growth Prospects The automotive aftermarket industry is poised for continued growth, driven by factors such as an aging vehicle population, increasing vehicle complexity, and consumer preferences for preventive maintenance. According to industry estimates, the U.S. automotive aftermarket is expected to grow at a compound annual growth rate (CAGR) of approximately 3.5% through 2025.
NTB is well-positioned to capitalize on this growth trend. The company has a proven strategy for expanding its network through a combination of new store openings and strategic acquisitions. In the past five years, NTB has added over 200 new locations to its portfolio, and it has plans to open an additional 50 to 70 stores annually in the coming years.
Furthermore, NTB’s focus on providing comprehensive automotive services, including tire sales and installation, battery replacement, and routine maintenance, positions it to capture a larger share of the growing aftermarket spend.
Strong Competitive Advantages NTB enjoys several competitive advantages that support its leadership position in the industry. First, the company’s extensive nationwide footprint and recognizable brand name provide it with a significant advantage over smaller, regional competitors. NTB’s scale also allows it to leverage its purchasing power and achieve economies of scale in areas such as marketing, distribution, and procurement.
Additionally, NTB has invested heavily in training and technology to ensure consistent, high-quality service across its locations. The company’s proprietary point-of-sale system and inventory management tools enable efficient operations and enhance the customer experience.
Potential Risks and Considerations
While NTB presents a compelling net lease investment opportunity, it is essential to consider potential risks and challenges. The automotive aftermarket industry is highly competitive, and NTB faces competition from national chains, regional players, and independent repair shops. Additionally, the company’s growth strategy relies heavily on new store openings and acquisitions, which can be capital-intensive and carry integration risks.
Furthermore, NTB’s operations are subject to fluctuations in commodity prices, particularly for tires and batteries, which can impact profitability if not managed effectively. Lastly, the company’s success is closely tied to the overall health of the U.S. economy and consumer spending patterns, which can be influenced by various macroeconomic factors.
National Tire and Battery’s extensive net lease portfolio, strong credit profile, impressive sales figures, promising growth prospects, and competitive advantages make it an attractive investment opportunity within the automotive aftermarket industry. While potential risks should be considered, NTB’s proven business model, focus on operational excellence, and disciplined expansion strategy position it well for continued success and reliable rental income streams for net lease investors.
Investors looking to capitalize on NTB’s strength as a net lease tenant can explore current NTB properties for sale listed available listings include:
- NTB Retail Property in Atlanta, GA – 7,500 SF, 12 years remaining on lease, listed for $3.2M at a 6.1% cap rate
- NTB Retail Property in Phoenix, AZ – 6,000 SF, 15 years remaining on lease, listed for $2.8M at a 5.9% cap rate
- NTB Tire & Auto Center in Dallas, TX – 8,200 SF, brand new 20-year NTB lease, listed for $4.1M at a 6.3% cap rate
With NTB’s impressive fundamentals and growth trajectory, these current listings represent potential opportunities to acquire high-quality net lease assets backed by a strong tenant at attractive pricing and returns. Act now to secure your position in this compelling investment opportunity.
NTB (National Tire & Battery) http://www.tbccorp.com/about.asp
NTB is owned by TBC Corporation – the nation’s largest vertically integrated marketer of tires for the automotive replacement market. TBC employs nearly 8,400 associates nationally. Additionally, the TBC Retail Group operates 491 franchised Big O Tires retailers.The Company’s retail operations include Company-operated tire and automotive service centers under the ” Tire Kingdom”, “Merchant’s Tire & Auto Centers”, and “National Tire & Battery” brands, and franchised stores under the “Big O Tires” brand. TBC markets on a wholesale basis to regional tire chains and distributors serving independent tire dealers throughout the United States, Canada, and Mexico.
Through its Carroll Tire wholesale distribution centers, the Company also markets directly to independent tire dealers across the United States. Carroll Tire Company sells a wide variety of proprietary and national brands from 38 distribution centers.
TBC markets and sells nine proprietary brands of tires through North America. The Multi-Mile, Cordovan, Sigma, Vanderbilt, Sumitomo, Eldorado, Laramie, Telstar, and Jetzon brands are produced by nationally recognized manufacturers and have a reputation for quality, safety, and value. These brands are distributed through TBC Private Brands and Treadways to independent retailers and wholesalers throughout the United States, Canada, and Mexico.
In 2005, TBC Corporation was purchased by Sumitomo Corporation of America (SCOA). SCOA is the largest subsidiary of Sumitomo Corporation (SC), one of Japan’s major integrated trading and investment business enterprises. TBC Corporation still functions as an independent company of SCOA providing the same services and products it has for many years, but has ended its 22-year stint as a publicly traded company on the NASDAQ.
The Real Estate Buyers Collective is a boutique investment real estate network specializing in income properties. If you need a quick sale of a NTB Property you own contact us. For buyers the network provides a full range of brokerage, advisory, and financing services nationwide to a substantial and diversified client base, which includes high net worth individuals, real estate investors, developers, REITs, partnerships and institutional investment funds. Call 312.433.9300 x20 or Visit Investment Grade Real Estate