O’Reilly Taps Sale/Leaseback

SPRINGFIELD, Mo.--O’Reilly Automotive Inc. has sold and leased back 90 of its 673 stores under a $52 million financing arrangement with Franchise Finance Corp. of America and U.S. Realty Advisors.

“USRA and FFCA were very responsive and creative in tailoring this transaction to our specific financing needs,” said James R. Batten, O’Reilly’s vice president of finance and chief financial officer. “They were also able to complete this transaction on a very aggressive timetable, at our request,” Batten added.

Founded in 1957 by the O’Reilly family, the company--one of the largest specialty retailers of aftermarket parts in the country--has stores in Missouri, Arkansas, Kansas, Oklahoma, Nebraska, Iowa, Illinois, Texas and Louisiana.

“O’Reilly’s decision to consummate a sale/leaseback transaction exemplifies the approach many corporations are taking today with respect to their real estate assets,” explained Laurie A. Hawkes, a partner with USRA. “The company recognizes that corporate ownership of real estate can be a sub-optimal use of capital, particularly given increasing constraints in the financial markets,” she added. “We were very pleased that the FFCA/USRA joint funding program enabled O’Reilly...to address its financial objectives.”

The purchase of the 90 stores was financed by USRA’s equity investment and FFCA’s fixed rate mortgage financing supported by master leases between affiliates of USRA and O’Reilly.

“This latest transaction with O’Reilly once again demonstrates FFCA’s ability to develop creative financial solutions for our clients, allowing them to enhance their capital structure and positively impact the bottom line,” said Stephen G. Schmitz, FFCA’s executive vice president and chief investment officer. “Over the past two years, FFCA and USRA have developed an on-going relationship that allows FFCA clients to monetize the value of their real estate assets and thereby put capital into their business operations,” he pointed out.

FFCA’s other clients include Checker Auto Parts, Valvoline Instant Oil Change, Midas Muffler Shops, Chevron, Texaco, Citgo, 7-Eleven, Circle K, Pizza Hut, Taco Bell and Wendy’s.

The financing alternatives from FFCA include mortgages and long-term real estate leases, construction and acquisition financing, equipment loans, and other custom financing solutions. Based in Scottsdale, Ariz., it has an investment/servicing portfolio of more than 5,900 properties throughout the U.S. and Canada.

Over the past decade, USRA, based in New York City, has completed more $18 billion in leveraged lease, sale/leaseback transactions and complex recapitalizations. It has investments in 45 states and Mexico with a portfolio valued at more than $6 billion.

For more information, contact www.oreillyauto.com and www.ffca.com.