TUCSON, ARIZONA – A Mister Car Wash at 3050 N Oracle Road in Tucson sold in a sale leaseback net lease transaction for approximately $2.7 million ($896 PSF). The 3,000-square-foot full service automatic car wash was built in 1986 and is located at the southeast corner of Delano Street and Oracle Road, north of Miracle Mile in Tucson.
Tucson-based, CWPS Corporation, dba Mister Car Wash, is the largest carwash operator in the U.S.,with nearly 50 years in the business.
Unlike a Dutch Bros or a Walgreens, net leased car wash properties are still a relatively new category for private investors. The professional car wash industry is more than 100 years old. Yet, the category has only recently picked up steam as a viable alternative to traditional net leased retail properties for private investors. Now, they are being viewed as extremely profitable and safe investments by large private equity funds, publicly traded REITs, and individual net lease investors.
Express car washes are a service-based, internet-resistant business and typically operate with a long-term lease with fixed increases. Also, car wash locations are often fundamentally sound sites that are located at high-traffic-count intersections with dense surrounding populations. Investors have the security of valuable leasehold improvements in the form of expensive car wash equipment that can qualify for accelerated depreciation giving the investor extensive tax advantages.
The International Carwash Association estimates that there are approximately 80,000 professional car wash locations in North America, which includes 24,000 express locations. The majority of car wash locations in the United States are owned and operated by small- to medium-sized independent car wash companies. Mister Car Wash is the largest car wash operator in the United States operating 280-plus carwashes in 22 states. Other operators include Zips Car Wash (140 locations), International Car Wash Group (134 locations), Autobell Car Wash (81 locations), and Quick Quack Car Wash (74 locations).
Austin Blodgett and Lee Csenar of Hanley Investment Group represented the seller. Matt Riesterer of Luther Group in Elm Grove, WI represented the Wisconsin private investor.
Hanley Investment Group has completed or has in escrow the sales of more than $180 million single-tenant car wash properties across the country since January 2018, making Hanley Investment Group the most active brokerage company in the net lease car wash sector. Hanley Investment Group was also one of the first brokerage companies to market and sell multiple car wash sale-leasebacks for a major operator. On all car wash sales completed by Hanley Investment Group, 83 percent of these buyers came from California. Hanley Investment Group was able to guide California-based 1031 exchange buyers who were in search of internet-resistant net lease investments to properties located in the western U.S., resulting in premium a premium cap rate for the car wash chain.
For more information, Blodgett should be reached at 949.235.0621.
To learn more, see RED Comp #8146.