commercial real estate

NAI KLNB, in its capacity as exclusive agent, is pleased to offer for sale the fee simple interest in the Catonsville Car Wash (the “Car Wash”), a modern, attractive, strategically-located and highly-trafficked full- and self-service, 24-hour car wash located at 5225 Baltimore National Pike in Baltimore, Maryland.

The offering includes 1.19 acres of land improved by a six bay car wash which is a well-established and extremely profitable business that has been in operation since 2000. The Car Wash comprises four self-service bays, two automatic bays as well as five vacuums, three shampoo machines and five vending machines. Email Chris Kubler or call 443-574-1415 for a complete offering memorandum.

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As a result of extensively marketing a car wash in Maryland, two other car wash owners have tracked me down and asked me to market their own car wash…leaving me the possibility of handling six car washes for three different owners…an unusual prospect for me, primarily a warehouse broker. Running these takes some effort, so it is often a change in life circumstances, eg a move, health issues, etc that leads to a sale.

My line of work is primarily marketing industrial real estate in Maryland, Washington DC and Virginia, but never shy about a new challenge, I’m going to be marketing a portfolio of car washes soon. I met with the owner today and learned a lot about the industry. These can be incredibly lucrative investments with fewer management hassles than one might imagine.

Car washes today — in Maryland at least — are trading in the neighborhood of a 10% capitalization rate, or 5 to 6 times gross earnings. These are exciting returns, and significantly more attractive returns than can be found in other commercial product types of comparable age and condition.

Some rules of thumb: Expenses run about 1/3 of gross revenue. Where gross revenue for a self-service bay (i.e., you wash the car by hand) might run $1,500 per month, a first automatic tunnel will generate $12,000 per month gross. You can add more automatic tunnels, but each successive tunnel will generate roughly 1/2 the revenue of the last…so in this example, $6,000 per month for the second tunnel and $3,000 per month for the third.

Third parties will provide equipment maintenance on an hourly basis. The properties need a daily cleaning and someone to collect the quarters every other day. Not particularly management intensive, and no worries about losing a major tenant.

Also exciting is the fact that car washes can be financed with SBA financing - 90 percent leverage, where traditional commercial real estate in today’s market requires a 20% to 40% down payment.

Unfortunately not many of these car washes change hands, and they require personal involvement to collect the money or to find someone particularly trustworthy to collect the money — or risk a lot of quarters “spilling on the floor.”