6s Capital - State of the Business
Last Update: 05 October 2021
Table of Contents
- Average Time Capital is Outstanding
- Completed Projects Pending PSA to Divest
- Completed Projects Under PSA to Divest
- Deal Pipeline for New Construction (subject to change)
- Deal Pipeline for Refinance / Stabilized Inventory (subject to change)
- Projects Under Construction
- Issuers / Tenants
Summary
Aggregate Debt Currently Outstanding
| Issuer / Tenant | DAI Debt (MM) |
Traditional Debt (MM) |
Grand Total (MM) |
|---|---|---|---|
| O’Reilly Auto Parts | 0 | 4.31 | 4.31 |
| Service King | 0 | 10.49 | 10.49 |
| Wawa | 0 | 4.54 | 4.54 |
| Total | 0 | 19.34 | 19.34 |
Credit Tenant Leases:
Average Time Capital is Deployed from Start to Finish:
| Issuer / Tenant | Months |
|---|---|
| O’Reilly Auto Parts | 8 |
| Service King | 10 |
| Wawa | 24 |
Completed Projects Pending PSA to Divest:
| Developer | Issuer / Tenant | Locations |
|---|---|---|
| DevCo1 | O’Reilly Auto Parts | 1 |
Completed Projects Under PSA to Divest:
| Developer | Issuer / Tenant | Locations |
|---|---|---|
| DevCo1 | O’Reilly Auto Parts | 1 |
Deal Pipeline for New Construction (subject to change):
| Issuer / Tenant |
Locations |
Estimated Debt Needed (MM) |
|---|---|---|
| O’Reilly Auto Parts | 9 | $13.37 |
| Tesla | 3 | $14.18 |
| Grand Total | 12 | $27.55 |
Deal Pipeline for Refinance / Stabilized Inventory (subject to change):
| Issuer / Tenant |
Locations |
Estimated Debt Needed (MM) |
|---|---|---|
| O’Reilly Auto Parts | 1 | $2.50 |
| Grand Total | 1 | $2.50 |
Projects Under Construction:
| Developer | Issuer / Tenant | Locations |
|---|---|---|
| DevCo1 | O’Reilly Auto Parts | 1 |
| DevCo1 | Service King | 3 |
| DevCo1 | Wawa | 1 |
Issuers / Tenants:
O’Reilly Auto Parts
Founded in 1957, O’Reilly Automotive Inc (NYSE: ORLY) is one of the largest automotive parts retailers in the United States. They serve both the ““do-it-yourself”” customers as well as professional service providers. O’Reilly’s currently has more than 5,500 stores in 47 states, growing by nearly 200 locations annually. Finishing out 2019 with sales reaching $10.15 billion, O’Reilly’s revenues were higher than any year previous in the company’s 60+ year history.
Auto parts store locations continue to be in high demand within the net lease space as there are very few investment grade options that are priced below $2MM. The retail auto parts industry continues to thrive as vehicles on the road remain resilient and “do-it-yourself” car repair is relied upon during a recession.
6s’ Narrative & Risk Assessment:
- Business model is COVID-19 resistant / recession resistant / Amazon resistant.
- Risk Assessment: Low
Earnings Highlights:
- Q2 2020 comparable store sales increase of 16.2%, total sales growth of 19.4%
- 57% increase in Q2 2020 diluted earnings per share
- Q2 2020 Net cash provided by operating activities increased $712 million or 84%
Data:
- Market Exit Cap-Rate Average: ~5.62%
- Credit Rating: S&P BBB+ / Moody’s Baa1
- Website: http://www.oreillyauto.com
Service King
Founded in 1976, Service King Collision Repair has grown to be one the largest automotive collision repair centers in Texas as well as the US. Service King currently operates in 24 states with 345 locations. Service King currently employs more than 6,000 staff and continues to grow at every level of the organization.
6s’ Narrative & Risk Assessment:
- Business model is COVID-19 resistant / recession resistant / Amazon resistant.
- Business model is an operational proxy of auto insurance companies.
- Risk Assessment: Medium
Data:
- Market Exit Cap-Rate Average: ~6.25%
- Credit Rating: Implied shadow rating of B
- Website: http://www.serviceking.com
- Ownership: Acquired by Blackstone in 2014
Wawa
Founded in 1803, Wawa’s business model has morphed from the manufacturing and textile business to a full-service foodservice and automotive fuel business. With a large selection of fresh food and beverages, including their own Wawa-branded options, Wawa’s revenue primarily consists of fuel and merchandise sales. As a part of the Forbes Top 25 largest private companies in the United States, Wawa’s 2019 sales for the year totaled $13 billion. In 2019, Wawa had an average of $6MM of revenue per store across their ~900 locations. In addition, total company fuel sales of 2.9 billion gallons were more than doubled the industry standard from the year prior.
6s’ Narrative & Risk Assessment:
- Business model is COVID-19 resistant / recession resistant / Amazon resistant.
- Risk Assessment: Low
Data:
- Market Exit Cap-Rate Average: ~4.73%
- Credit Rating: Fitch BBB with a stable outlook
- Website: http://www.wawa.com
Tesla
Tesla, Inc. designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems in the United States, China, and internationally. The company operates in two segments, Automotive, and Energy Generation and Storage. The Automotive segment offers electric vehicles, as well as sells automotive regulatory credits. It provides sedans and sport utility vehicles through direct and used vehicle sales, a network of Tesla Superchargers, and in-app upgrades; and purchase financing and leasing services. This segment is also involved in the provision of non-warranty after-sales vehicle services, sale of used vehicles, retail merchandise, and vehicle insurance, as well as sale of products through its subsidiaries to third party customers; services for electric vehicles through its company-owned service locations, and Tesla mobile service technicians; and vehicle limited warranties and extended service plans. The Energy Generation and Storage segment engages in the design, manufacture, installation, sale, and leasing of solar energy generation and energy storage products, and related services to residential, commercial, and industrial customers and utilities through its website, stores, and galleries, as well as through a network of channel partners. This segment also offers service and repairs to its energy product customers, including under warranty; and various financing options to its solar customers. The company was formerly known as Tesla Motors, Inc. and changed its name to Tesla, Inc. in February 2017. Tesla, Inc. was founded in 2003 and is headquartered in Palo Alto, California (from Yahoo!).
6s’ Narrative & Risk Assessment:
- Business model is COVID-19 resistant / recession resistant / Amazon resistant.
- Risk Assessment: Low
Data:
- Website: http://www.tesla.com
Updates:
05 October 2021
6s closed on a deal (O’Reilly as tenant), repaid the loan, and sold the project to an investor, with an expected exit cap rate.
29 September 2021
6s closed on a deal (Wawa as tenant), and borrowed ~4.5MM from a private lender. Construction for this new project starts next week. Project duration is targeted for ~18 months.
27 August 2021
6s closed on a deal (Wawa as tenant), repaid the loan, and sold the project to an investor, with an expected exit cap rate.
14 August 2021
6s closed on a deal (Service King as tenant), and borrowed ~4.2MM from a bank. Construction for this new project starts next week. Project duration is targeted for ~8 months.
30 July 2021
6s closed on a deal (O’Reilly as tenant), and borrowed ~1.78MM from a bank. Construction for this new project starts next week. Project duration is targeted for ~8 months.
15 July 2021
6s closed on a deal (O’Reilly as tenant), repaid the loan, and sold the project to an investor, with an expected exit cap rate.
02 June 2021
6s closed on a deal (Service King as tenant), and borrowed ~2.65MM from a bank. Construction for this new project starts next week. Project duration is targeted for ~8 months.
19 May 2021
6s closed on a deal (Wawa as tenant), repaid the loan, and sold the project to an investor, with an expected exit cap rate.
14 May 2021
6s closed on a deal (O’Reilly as tenant), and borrowed ~1.25MM from a bank. Construction for this new project starts next week. Project duration is targeted for ~8 months.
07 May 2021
6s has entered into a PSA to divest a project (Service King as tenant)
07 May 2021
6s closed on a deal (Service King as tenant), and borrowed ~3.65MM from a bank. Construction for this new project starts next week. Project duration is targeted for ~10 months.
05 May 2021
6s has entered into a PSA to divest a project (Wawa as tenant).
03 May 2021
6s closed on a deal (Service King as tenant), repaid the senior loan, and sold the project to an investor, with an expected exit cap rate.
03 May 2021
6s has entered into a PSA to divest a project (O’Reilly as tenant).
23 April 2021
6s closed on a deal (O’Reilly as tenant), and borrowed ~1.25MM from a bank. Construction for this new project starts next week. Project duration is targeted for ~8 months.
06 April 2021
6s has entered into a PSA to divest a project (O’Reilly as tenant).
19 March 2021
6s closed on a deal (O’Reilly as tenant), and borrowed ~1.2MM from a bank. Construction for this new project starts next week. Project duration is targeted for ~8 months.
18 March 2021
6s has re-financed an existing loan with a new lender (Wawa as tenant).
03 March 2021
6s has entered into a PSA to divest a project (Wawa as tenant).
31 December 2020
6s closed on a deal (O’Reilly as tenant), repaid the senior loan, and sold the project to an investor (a publicly traded REIT), with an expected exit cap rate.
22 December 2020
6s closed on a deal (O’Reilly as tenant), repaid the senior loan, and sold the project to an investor (a publicly traded REIT), with an expected exit cap rate. 6s has also been granted a $10MM guidance line with an FDIC-regulated bank.
18 December 2020
6s closed on a deal (O’Reilly as tenant), repaid the senior loan, and sold the project to an investor, with an expected exit cap rate.
10 December 2020
6s closed on a deal (O’Reilly as tenant), repaid the senior loan, and sold the project to an investor, with an expected exit cap rate.
02 December 2020
6s has entered into a PSA to divest a project (while the project is still under construction, O’Reilly as tenant).
01 December 2020
Updated our forward guidance for upcoming transactions. 6s has entered into a PSA to divest a project (while the project is still under construction, Service King as tenant). One of the projects under construction should receive its C.O. next week.
09 November 2020
6s closed on a deal (O’Reilly as tenant), and borrowed ~1.25MM from a bank. Construction for this new project starts next week. Project duration is targeted for ~8 months.
19 October 2020
6s closed on a deal (Service King as tenant), repaid the senior loan, and sold the project to an investor (~5.4MM), with an expected exit cap rate.
09 October 2020
6s has entered into a multi-project PSA to divest four projects (1-Completed & 3-Under Construction).
25 September 2020
6s closed on a deal (Service King as tenant), repaid the senior loan, and sold the project to an investor (~4.9MM), with an expected exit cap rate.
Also 25 Sept 2020, 6s closed on a deal (Service King as tenant) and borrowed ~3.8MM from a bank. Construction for this new project starts on Monday. Project duration is targeted for ~10 months.
Disclaimer: All information contained herein is unaudited and for informational purposes only. Copyright © 2020-2021. All rights reserved.