A renovated AutoZone with a new 15-year lease went to an all-cash 1031 buyer. Two public auto-parts listings, including an O’Reilly-anchored corner, show how lease term, building age and credit move the cap rate.
The Bakersfield AutoZone sale at 1125 Olive Drive closed at $2.64 million, Connect CRE reported on Aug. 4, 2026. San Diego-based Torrey Financial Group sold the renovated 8,302-square-foot store, which AutoZone leases for 15 years with 10% rent increases every five years, to an all-cash buyer completing a 1031 tax-deferred exchange. Brokers represented both the seller and the buyer.
Key takeaways
- AutoZone’s 8,302-square-foot store at 1125 Olive Drive sold for $2.64 million, about $318 per square foot, after a 40-day escrow at more than 96% of the asking price.
- A public offering memorandum showed first-year rent of $143,811, so the price implies a cap rate of about 5.45%, versus a 6.80% Bakersfield retail average for Q2 2026 in regional brokerage reports.
- The lease runs from Dec. 3, 2025 to Dec. 31, 2040 with 10% increases every five years, lifting the buyer’s yield on price to about 6.59% in years 11 to 15.
- An O’Reilly-anchored corner at 2627 Haley Street, built in 1982, was marketed at $1.75 million and a 6.0% cap rate, with O’Reilly’s lease set to expire April 30, 2027.
- AutoZone reports 7,710 stores and O’Reilly more than 6,500, the national scale net-lease buyers look for in a tenant.
Deal at a glance
| Item | Detail |
|---|---|
| Property | Single-tenant AutoZone store (net lease) |
| Address | 1125 Olive Drive, Bakersfield, CA 93308 (Olive Drive Towne Center, north Bakersfield) |
| Property type | Freestanding retail outparcel |
| Building | 8,302 SF; built 2013, fully renovated 2025 |
| Land | 0.72 acres (building covers about 26% of the lot) |
| Tenant and lease | AutoZone Parts, Inc.; 15 years (Dec. 3, 2025 to Dec. 31, 2040); 10% increases every five years; four five-year options |
| Buyer | Private investor (described as from Los Angeles; a broker quote says Nevada); all-cash 1031 exchange |
| Seller | Torrey Financial Group, San Diego |
| Price | $2.64 million (about $318/SF); implied cap rate about 5.45% (Kern CRE calculation) |
| Closed | Reported Aug. 4, 2026; 40-day escrow |
| Planned use | Continued AutoZone operation |
What sold in the Bakersfield AutoZone sale and who was involved?
Torrey Financial Group of San Diego sold the AutoZone at 1125 Olive Drive in Bakersfield, Kern County, California, for $2.64 million, Connect CRE reported. The 8,302-square-foot building was built in 2013, fully renovated in 2025 and leased to AutoZone on a new 15-year lease. REBusinessOnline rounded the price to $2.6 million and reported the 10% rent increases every five years.
Brokers represented both sides. The buyer is a private investor the coverage describes as from Los Angeles. The seller’s broker described the buyer differently in the brokerage’s release: “We procured an all-cash, 1031-exchange buyer from Nevada. We negotiated a 40-day escrow and closed at over 96% of the listing price, which reflects the continued depth of demand for essential retail in fast-growing suburban markets.”
The buyer’s broker said his client “moved quickly because of the long-term lease, the recent renovation, replaceable rent, and the investment grade strength of AutoZone.” The buyer has not been named.
What is the property at 1125 Olive Drive?
The store sits on 0.72 acres in Olive Drive Towne Center, whose anchors include Grocery Outlet, Dollar Tree, Burlington and Goodwill, according to the seller’s brokerage release. The release cites 1.3 million annual visits to the center, about 124,000 vehicles a day on the nearby Golden State Highway and more than 215,000 residents within five miles. The building came with a 20-year transferable roof warranty.
At $2.64 million, the buyer paid about $318 per square foot of building and about $84 per square foot of land. The building covers roughly 26% of its lot, which leaves the parking and access a parts store needs for quick trips and commercial deliveries.
What is the AutoZone rent schedule and yield on price?
| Lease period | Annual base rent | Yield on price |
|---|---|---|
| Years 1 to 5 (from Dec. 2025) | $143,811 | About 5.45% |
| Years 6 to 10 | $158,192 | About 5.99% |
| Years 11 to 15 (to Dec. 2040) | $174,011 | About 6.59% |
| Option 1 (years 16 to 20) | $191,412 | About 7.25% |
Source: brokerage offering memorandum (undated). Yields are Kern CRE calculations on the $2.64 million sale price. No source reported the closing cap rate.
What are the lease terms: 15 years, 10% bumps, roof and structure?
AutoZone Parts, Inc. signed a lease that starts Dec. 3, 2025, expires Dec. 31, 2040 and carries four five-year renewal options. A brokerage offering memorandum for the property puts first-year base rent at $143,811, or $17.32 per square foot per year, stepping up 10% every five years. That memorandum asked $2,739,200 at a 5.25% cap rate. The sale price is 96.4% of that figure.
The labels differ by source. Press coverage calls the lease triple-net, meaning the tenant pays taxes, insurance and maintenance. The memorandum calls it a double-net lease in which the “Landlord is only responsible for the roof and structure.” The 20-year transferable roof warranty narrows that exposure, but structural repairs remain a landlord cost a buyer should budget for. For more on lease types, see Kern CRE’s explainer on single-tenant net lease investing.
The memorandum came from a different brokerage than the one that handled the sale, so its asking price may not match the final listing price.
How are AutoZone and O’Reilly net leases priced?
Four factors drive the price: tenant credit, lease term and rent growth, how easily the rent could be replaced, and the buyer’s financing. Auto-parts stores are a staple of single-tenant net-lease investing. They sell parts people need now, serve repair shops as well as do-it-yourself customers, and are hard to replace with online orders.
Tenant credit
The seller’s brokerage release describes AutoZone as investment-grade, rated BBB by S&P, with 7,710 stores in the United States, Mexico and Brazil and net sales of $4.84 billion in the quarter ended May 2026. O’Reilly Automotive reports more than 6,500 stores across the U.S., Mexico, Puerto Rico and Canada. Buyers also look at which entity signs the lease. Here it is AutoZone Parts, Inc.
Lease term and rent growth
A new 15-year lease is the main reason this store priced near the low end of the market. Ten percent every five years works out to about 1.9% a year compounded. The buyer’s yield on cost rises from about 5.45% to about 6.59% by the final term without any new leasing.
Replaceable rent and the real estate
At $17.32 per square foot, AutoZone’s rent sits below the $20.26 average NNN asking rent that a regional brokerage report showed for Bakersfield retail in Q2 2026. That is what the buyer’s broker means by “replaceable rent”: if AutoZone ever left, a new tenant could likely pay similar rent, which protects the buyer’s downside. A grocery-anchored outparcel near a highway interchange adds to that comfort.
Why 1031 buyers pay cash
Exchange buyers have 45 days from their sale to identify replacement property and 180 days to close, so they favor assets they can underwrite fast and hold passively. For background, read Kern CRE’s guide to 1031 exchanges for commercial property. When a property’s cap rate is below a loan’s interest rate, borrowing lowers the cash yield instead of raising it. That is why buyers at cap rates in the mid-5% range often pay all cash, as this one did.
How do the Haley Street and Union Avenue auto-parts listings compare?
Two public offerings in east Bakersfield’s 93305 ZIP code show the other end of the auto-parts range. Neither listing shows a final price, so these are asking terms, not closed sales.
A brokerage flyer marketed 2627 Haley Street, a 6,720-square-foot building from 1982 on a C-2 zoned corner at Columbus Street, for $1.75 million at a 6.0% cap rate (6.6% pro forma). O’Reilly Auto Parts leases 5,040 square feet on a NNN lease that the flyer shows expiring April 30, 2027, with a five-year extension at $7,178 a month. A market tenant takes the rest on a modified gross lease. The flyer is undated.
An AutoZone at 3408 Union Avenue was also listed as a net-lease investment at a 5.25% cap rate. The building is 4,500 square feet, dates to 1978 and had about 13 years of lease term remaining with an AutoZone corporate guarantee, on a corner the listing says carries more than 35,900 cars a day. That listing is now off the market.
Read together, the three properties show how buyers grade risk. Long remaining term and a corporate guarantee kept the older Union Avenue AutoZone’s asking cap rate in line with new-build pricing. The Haley Street corner asked a higher yield because O’Reilly’s remaining term was short and a second, smaller tenant sits on a lease that leaves more costs with the landlord.
| Property | Tenant | Built | Size | Lease (as marketed) | Pricing | Status |
|---|---|---|---|---|---|---|
| 1125 Olive Dr. | AutoZone | 2013, renovated 2025 | 8,302 SF on 0.72 ac | New 15-year term to 2040; 10% bumps every 5 years | $2.64M (about $318/SF); about 5.45% implied | Sold (reported Aug. 4, 2026) |
| 3408 Union Ave. | AutoZone | 1978 | 4,500 SF | About 13 years remaining; corporate guarantee | Asking cap rate 5.25% | Listing now off market |
| 2627 Haley St. | O’Reilly Auto Parts plus a market tenant | 1982 | 6,720 SF on 16,988 SF lot | O’Reilly NNN to April 30, 2027, with 5-year extension | Asking $1.75M (about $260/SF); 6.0% cap | Flyer undated |
Sources: Connect CRE and the seller’s brokerage release (August 2026); Showcase.com listing for 3408 Union Ave.; brokerage flyer for 2627 Haley St. The implied cap rate for 1125 Olive Dr. is a Kern CRE calculation.
What does the AutoZone sale mean for Bakersfield retail investors?
Bakersfield’s retail fundamentals support these prices, and the Olive Drive sale shows what investors pay for national credit and a fresh, long lease. Regional brokerage reports put vacancy at 5.20% in Q2 2026, down from 5.54% a year earlier, with an average retail cap rate of 6.80% and an average sale price of $236 per square foot. A national brokerage report put Bakersfield shopping-center vacancy at a preliminary 6.5%.
The Olive Drive sale came in roughly 135 basis points below that average cap rate. Compare it with Lumberjack Square, a multi-tenant White Lane center with a local fitness anchor whose $11.7 million sale was reported in September 2026 at an estimated cap rate near 9%. The spread between those trades is the price of credit, term and management. Kern CRE’s primer on cap rates explains how to read these numbers.
For owners of older net-leased buildings, the lesson is about timing. Extending a tenant’s lease before selling, as the sellers of Lumberjack Square and the Vallarta center on Niles Point did, can move a property from the Haley Street pricing tier toward the Olive Drive tier.
What happens next for these properties?
AutoZone continues to operate at 1125 Olive Drive, and the first rent increase under the new lease arrives in year six, starting in December 2030. Because the landlord’s duties are limited to roof and structure, the new owner should expect little day-to-day involvement.
On Haley Street, O’Reilly’s current term ends April 30, 2027 unless the five-year extension shown in the flyer takes effect. Whether it does will shape that building’s value more than any change in market cap rates.
Frequently asked questions
How much did the AutoZone on Olive Drive in Bakersfield sell for?
It sold for $2.64 million, Connect CRE reported Aug. 4, 2026. That works out to about $318 per square foot for the 8,302-square-foot building on 0.72 acres. The seller’s brokerage said escrow lasted 40 days and the price topped 96% of the asking price.
What cap rate did the Bakersfield AutoZone sell at?
No source reported the closing cap rate. A brokerage offering memorandum showed first-year base rent of $143,811 and an asking cap rate of 5.25%. Divided by the $2.64 million price, that rent implies about 5.45%, roughly 135 basis points below the 6.80% Bakersfield retail average in regional brokerage reports for Q2 2026.
What are the AutoZone lease terms at 1125 Olive Drive?
AutoZone Parts, Inc. has a 15-year lease from Dec. 3, 2025 to Dec. 31, 2040. Rent rises 10% every five years, and the tenant holds four five-year renewal options. The offering memorandum calls it double-net, with the landlord covering only roof and structure, while press reports say triple-net. A 20-year roof warranty transfers to the new owner.
Who bought and sold the AutoZone at 1125 Olive Drive?
Torrey Financial Group of San Diego was the seller, represented by a brokerage. The buyer is an unnamed private investor who paid all cash in a 1031 exchange and also had broker representation. Press coverage places the buyer in Los Angeles, while the seller’s broker said Nevada.
Why do 1031 exchange buyers like AutoZone and O’Reilly stores?
Exchange buyers must identify replacement property within 45 days and close within 180, so easy-to-underwrite assets win. Auto-parts stores offer national tenants, long net leases with scheduled increases and little landlord work. AutoZone reports 7,710 stores and O’Reilly more than 6,500, which gives investors the scale they look for.
What drives cap rates on auto-parts net leases in Bakersfield?
Remaining lease term, tenant credit, rent increases, landlord responsibilities and location. The new 15-year AutoZone lease on Olive Drive priced at about 5.45%. An AutoZone on Union Avenue with 13 years left was offered at 5.25%, and an O’Reilly-anchored corner on Haley Street with a lease ending in 2027 was offered at 6.0%.
Weighing a sale of a net-leased building or placing 1031 exchange funds in Kern County? Call Kern CRE at 661-885-6949 or contact us for a pricing review. Get Kern County CRE news monthly: subscribe to the Kern CRE report.
Sources
- Triple-Net AutoZone Sells to Private Investor from LA, Connect CRE (Paul Bubny), Aug. 4, 2026.
- Torrey Financial Group Sells Single-Tenant Retail Property in Bakersfield, California for $2.6M, REBusinessOnline (Amy Works), Aug. 5, 2026.
- Renovated, Single-Tenant AutoZone Sells for $2.64 Million in Bakersfield, California, Hanley Investment Group via ABNewswire/FinancialContent, Aug. 5, 2026.
- Offering Memorandum: AutoZone, New 15 Year Land & Building Lease, 1125 Olive Drive, Marcus & Millichap, undated.
- 3408 Union Ave, Bakersfield, CA 93305 (AutoZone net-lease investment; off market), Showcase.com listing.
- 6,720 SF O’Reilly Auto Parts Anchored Retail Center, 2627 Haley Street (flyer), Keller Williams Commercial, undated.
- O’Reilly Automotive corporate home page, O’Reilly Automotive, updated April 17, 2026.
- Like-Kind Exchanges Under IRC Code Section 1031 (FS-2008-18), Internal Revenue Service, February 2008.
- Q2 2026 Bakersfield, CA Retail Market Overview, Lee & Associates, July 2026.
- U.S. Retail MarketBeat Q2 2026, Cushman & Wakefield, July 2026.
About this article
Kern CRE prepared this article with help from AI research and writing tools. An editor reviewed the draft, checked its facts against the sources linked above and edited it for accuracy and clarity. Details come from public records and the sources cited; unless stated, Kern CRE and ASU Commercial were not involved in the transaction or project.