Triple-Net Car Wash Sales Remain Robust as Inventory Grows
The triple-net lease (NNN) car wash real estate market continued to mature and expand in 2022, with more than 245 leased properties changing hands for a gross market value of more than $1 billion, according to CoStar data and B+E research. The average sale price of a NNN car wash was $4,480,273 and deals traded at an average cap rate of 5.79%.
“We saw some very impressive trade points in 2022,” said Jim Ceresnak, a director at B+E who specializes in car wash dispositions and acquisitions. “Interest in the net lease car wash market remains high, and the robust deal activity we saw last year reflects that.” B+E advised both buyers and sellers on an estimated $100 million of NNN car wash property transactions last year.
However, transaction statistics don’t tell the full story of a market that faced headwinds as interest rates rose and inventory surged in 2022’s second half. With buyers often unable to secure financing at rates below 6.00%, many who would have otherwise purchased a NNN car wash to capture bonus depreciation sat it out.
The buyers who did participate could afford to be choosier, since the number of available NNN car washes exceeded 160 properties by November 2022 – more than double the number available at the end of September.
Even as dozens of NNN car wash transactions were completed in the last four weeks of 2022, the influx of new supply shows no signs of slowing down. More than 35 new NNN car wash properties have been listed since Jan. 1, B+E reported.