Pep Boys Completes $77M Sale-Leaseback

The automotive aftermarket retailer Pep Boys, whose full corporate name is The Pep Boys Manny, Moe & Jack, has completed a sale-leaseback of 22 properties for $77.5 million. The company will continue to operate the properties as Pep Boys stores, for a lease term of 15 years, with four, five-year extension options. According to the Philadelphia-based Pep Boys, proceeds from the transaction, together with other funds, were used to purchase 27 store properties and two distribution centers that had been leased by the company under a master operating lease for $116.3 million. That lease had been scheduled to expire on August 1. Eight of the store properties purchased were sold in the aforementioned sale-leaseback transaction. The remaining 19 store properties and two distribution centers were added to the company’s balance sheet. Pep Boys has been quite active as in sale-leasebacks of its stores recently. Since the fourth quarter of 2007, the company has completed four sale-leaseback deals on 97 store properties for total proceeds of $376.7 million. The company still owns 235 of the 562 stores that it operates and four of its five distribution centers. Pep Boys currently operates 562 stores in 35 states and Puerto Rico. The company has approximately 6,000 service bays, more than 5.9 million square feet of retail space and more than 2 million square feet of warehouse space. Along with its vehicle repair and maintenance capabilities, the company also serves the commercial auto parts delivery market and is one of the leading sellers of replacement tires in the United States.