RealSource Group completes over $100 million in single-tenant express wash sales in 2022 - Professional Carwashing & Detailing

RealSource Group completes over $100 million in single-tenant express wash sales in 2022

NEWPORT BEACH, Calif. — The sales represented a mix of sale-leasebacks, build-to-suits/pre-sales and ground leases with four different express wash brands.

NEWPORT BEACH, Calif. — RealSource Group, a national commercial real estate brokerage company focused on retail, healthcare, automotive and education properties, announced the firm completed a record year in 2022 with over $100 million in single-tenant net-lease express carwash property sales.

The sales represented a mix of sale-leasebacks, build-to-suits/pre-sales and ground leases with four different express wash brands, according to a press release.

The properties were located across eight states in the Midwest, South and southeastern United States.

According to RealSource’s senior vice president of investment sales, Austin Blodgett, “2022 was a record year for the net-lease carwash sector.

The sale of net-lease express carwash properties reached over $1.4 billion in sales volume, an 8.5% increase from 2021.”

Blodgett points to some of the main drivers for the increase in sales volume across the U.S.

“Private individual buyers have become increasingly familiar and comfortable with this asset type for long-term investment and were eager to take advantage of the 100% bonus depreciation benefits in 2022, before the depreciation amount was reduced to 80% in 2023,” Blodgett explained. “Other factors that fueled sales volume was the rising interest rates, which pushed 1031 exchange buyers to explore other ‘higher yield’ asset types to keep positive leverage. Other similarly priced investment opportunities in the $4 to $6 million range with better credit were often priced too aggressively compared to where the market was headed.”

With record private equity investment in the net-lease carwash sector over the past few years, more carwash operators rolled out new sites.

“The growth in the number of new units created more merger and acquisition opportunities and greenfield development across the country, which ultimately led to more sales,” noted Blodgett.

In the last three months, the level of single-tenant net-lease inventory of express carwashes for sale has increased, creating more competition for properties currently on the market and providing buyers with the opportunity to be more selective.

“Real estate investment trusts (the largest buyer of carwash properties) have not been able to get as aggressive on pricing given their cost of capital. Therefore, sale-leaseback deals that were previously happening off-market with the REITs going direct are now coming to the open market to take advantage of the private 1031 exchange buyer pool. This is a chance for buyers look at deals that would not typically be available to a private buyer, which is a unique opportunity for investors today.” Blodgett continues, “Buyers are looking at the number of successful units the chain operates and the location and market where the unit or units are as they consider their purchase options.”  

Looking ahead to 2023, Blodgett expects demand to stay high for express wash properties and that the bonus depreciation benefits will continue to be a significant driver for buyers of these properties.

“Even though the bonus depreciation amount in 2023 has dropped to 80%, it is still a very big tax advantage that no other product types have (except gas station/convenience stores),” Blodgett said. “Although we may not see the number of records that were set in 2022, we think that volume will stay comparable to 2022 as sellers’ expectations align with the market and rising interest rates to make deals with motivated buyers.”   

For more information, visit: realsource.com.

You May Also Like

B+E helps buyer quickly close on $22M worth of carwash assets

NEW YORK — B+E helped to find and secure four new washing properties, closing on them before the end of 2022.

NEW YORK — B+E, a brokerage and technology platform for net lease real estate, announced the sale of four carwash assets located in Florida and Texas for $22,051,281, according to a press release. 

The brokerage managed all aspects of the buy side transactions for a first-time net lease buyer.

Autobell debuts in Greenville, S.C., market with three locations

CHARLOTTE, N.C. — Autobell Car Wash introduces three new washing locations to Greenville, Greer and Simpsonville.

Automotive Lift Institute unveils new Lifting Points Guide

CORTLAND, N.Y. — Electronic guide makes it easy to find OEM lifting point information.

Deltic Wash Force announces opening of ‘one-of-a-kind’ wash

BARRIE, Ontario, Canada — Klassic Car Wash offers both soft-touch and touch-free wash experiences.

Garnett Station Partners recapitalizes Flagstop Car Wash

NEW YORK — The partnership is providing growth capital for continued regional expansion.

Other Posts

Magnolia Wash Holdings acquires Blue Water Express Wash

TALLAHASSEE, Fla. — The express carwash operator commemorates the three new locations in Tallahassee with a ribbon-cutting event and special promos.

Tidal Wave Auto Spa celebrates new opening in South Carolina

THOMASTON, Ga. — The company opens its 13th location in the state.

Tommy’s Express Car Wash named No. 1 Smartest-Growing Franchise

HOLLAND, Mich. — The brand has its foot on the gas to open 60-120 carwashes per year.

Featured profile: Washville Car Wash

The story of a growing conveyor chain in the Northeast U.S.

Washville Car Wash