Los Angeles High Quality Car Wash Assets Shine With Strong Cash Flow
Los Angeles has been a hot spot for car wash investors — particularly for high-quality assets.
One of the latest examples of this is a recently renovated Super Star Car Wash at 1640 W. Martin Luther King Junior Blvd that was bought by a Los Angeles-based private investor for $6.2 million on a 1031 exchange.
The deal for the 6,947-square-foot property on 0.56 acres was arranged by SRS Capital Markets Executive Vice Presidents and Managing Principals Calvin Short and Aron Cline, who represented the seller.
The asset, renovated in 2023, has a corporate-guaranteed absolute triple net lease in place with approximately 20 years remaining.
"The buyer was attracted to the property's rare combination of a long-term corporate lease, an irreplaceable infill location, and the ability to capitalize on depreciation benefits that are unique to the car wash sector," Short told GlobeSt.com.
"Across the greater Los Angeles market, investors continue to favor high-quality car wash assets because they provide stable cash flow, minimal management responsibilities, and strong long-term appreciation potential in a market where developing new competing facilities is increasingly difficult."
Adding to the appeal of the site is the express tunnel; properties that feature these frequently operate with 35 to 50 percent EBITDA margins, according to the International Carwash Association. Plus, LA is one of the metro regions in California that benefits from automation, reduced labor requirements and dense vehicle traffic patterns to boost the car wash sector, according to the industry nonprofit.
Super Star Car Wash is one mile from the University of Southern California, along a major east-west thoroughfare serving South Los Angeles. It is also near retailers including Target, Ralphs, Whole Foods, Ross Dress for Less and many others.
There are more than 1.25 million residents and 514,400 employees within a five-mile radius of the property.
Source: GlobeSt/ALM