A Los Angeles-based private investor paid $3.72 mil for the absolute triple-net ground lease of a new BLISS Car Wash in Valencia. The transaction was conducted prior to the completion of construction and before the tenant opened for business. BLISS was formally paying rent at closing.
The new 2023-construction BLISS Car Wash is located at the southwest quadrant of the signalized, high-traffic intersection of Copper Hill Dr and Rio Norte Dr (36,000 cars per day). The 4.3k sf building, which sits on 1.26 acres, is scheduled to open in the first quarter of 2024. BLISS Car Wash presently has 10 locations operating and seven more will be opening soon across southern California, including the Valencia site.
Bill Asher and Jeff Lefko with Hanley Investment Group Real Estate Advisors represented the developer and seller, Fountainhead Development of Newport Beach. The buyer was repped by Jenny Eng at CBRE in Glendale. According to Asher, tThis sale represents the first BLISS Car Wash to trade as a leased investment.
“The car wash business, which is service-based and internet-resistant, is over a $15 bil industry growing at 3.2% annually,” Asher noted. “Advances in technology, including the introduction of mobile apps, on-demand services, and subscription packages, have increased efficiency and convenience, and have substantially increased the demand for express car washing.”
BLISS’ cutting-edge water reclamation systems play a pivotal role, enabling the chain to reclaim and reuse a remarkable 70% of the water the car wash operation utilizes. While a traditional car wash may use up to 80 gallons of fresh water per wash, and a home car wash may squander as much as 100 gallons, BLISS Car Wash stands out by utilizing fewer than 24 gallons. BLISS’ “Smart Meter” technology further elevates their conservation efforts, enabling real-time monitoring of water usage and facilitating efficient consumption management.
“Express car washes are one of the most profitable tenants in the net-lease sector and, therefore, we expect that this segment will continue to experience steady demand from investors,” continues Asher. “With margins between 50% and 60%, the average location can be very profitable and withstand potential future economic challenges. In certain markets, top-performing car washes have been backfilling vacant pads, former shop buildings and junior box spaces and are becoming quasi ‘anchors’ to a shopping center. These car washes can bring tens of thousands of cars to shopping centers annually. Based on the recent expansion of numerous car wash operators, we expect a significant increase in single-tenant net-lease car wash properties for sale over the next six to 12 months.”