A Clean Investment

Express carwashes are a strong niche in today’s economy.

An increasingly growing sector, carwash facilities are potentially lucrative projects for some commercial real estate investors. While carwashes come in many shapes and sizes, express carwashes have the widest market appeal according to experts in the field.

Commercial Investment Real Estate magazine sat down with Robert A. Rosenberg, CCIM, chief executive officer/principal of Inve$tnet in Sacramento, Calif., who is currently developing Bobcat Zip Wash in Sacramento, to discuss the benefits, challenges, and design elements of express carwashes.

CIRE: What are express carwashes?

Rosenberg: Express carwashes are typically three- to four-minute high-speed washes where the car owner stays in the car while a conveyor pulls the car through the tunnel. The tunnels are usually 90 feet to 150 feet in length depending on the site capacity needs. A well-designed site and a long tunnel allows the spacing of various services including prewash, brushes, tire and rim washes, waxes, and drying.

CIRE: What are the benefits of this particular set-up?

Rosenberg: The express wash’s long tunnel allows the line to run at a higher wash count per hour. This can be important during peak hours. A site can often be run with only one or two people except during high-volume hours. Full-service car washes often have crews of 15 to 20 or more people to do the same volume as an express wash.

Upon completion, owners have the option to exit or use a vacuum. Tire and rim units as well as special applicators also can be placed on the line without slowing down the car or using any labor.

Most good express washes also are touch-oriented and use high-quality washing fabrics. Touchless carwashes use more chemicals that can be harmful to the paint and don’t always remove dirt as easily. Handwash locations often drag dirt from the lower areas across the paint, potentially leaving scratches.

CIRE: What other factors influence express carwashes’ volume?

Rosenberg: Stacking and approach from the street are the first two factors that should be considered. Ingress should be easy in turns, with good stacking length, and flow.Visible signage and easy-to- follow directions also are important. Automatic attendants, emulating a sophisticated ATM set-up with dual gates, have proved more effective in processing faster and upselling additional services (revenue) with professional prompts.

Computer controllers can obtain cars’ exact measurements, which allows tight placement on the conveyor and a customized wash for each user. The brushes can be properly rinsed prior to touching the next car.

CIRE: What are some common pitfalls to avoid?

Rosenberg: Sites always should look welcoming to customers. The criteria in Robert Roman’s article “Polish Your Portfolio” on traffic, access, visibility, and nearby generators is very important. Avoid building on too little land to economize on cost. The results often include a cap on how many cars they can handle, very tight turns, and lack of thought on internal flow and exiting. Often, the tunnel ends up too short or too narrow. The shortness cuts into the speed and services while the narrowness can make the customer feel confined. Vacuuming areas should be well placed to maintain a good flow while having good lighting and cleanliness.

Another common pitfall is locating where competitors have easy entry in a market that can only support one carwash. Often the extra work and cost of sites with high barriers to entry by zoning, land use, or lack of available sites are offset by benefits of less competition in the market. Because express carwashes offer a faster and higher service level than gas station single-car units, with higher-quality equiptment they appeal to different markets.

CIRE: What are some of the pros and cons express carwash investors face when leasing or finding property?

Rosenberg: Retail center landlords, lenders, and developers often are concerned about the single-purpose use of the facility and what will happen if the operator fails. Often landlords do not realize the importance of a quality layout to help the operator succeed. In addition, a car wash can attract potential traffic to retail centers and a healthy cash flow allowing the tenant to regularly make payments. Due to the high investment in equipment and its rapid tax depreciation, there are opportunities to shelter the taxable income and retain a good portion after tax.

CIRE: Are sustainable elements being included in express carwashes?

Rosenberg: Many operators are using water reclaim units that remove dirt and treat water. The use of solar and variable speed motors helps cut down on electricity. Skylights can be used to replace artificial lighting, recycling trash at the vacuum stations cuts down on waste, and lighter pavements reduce pavement heat.

Stephanie Bell

“I went through the [recession in the] 1980s and purposely set out a market plan that would not have the boom-and-bust [nature] that comes with real estate cycles.” — Joe W. Milkes, CCIM, Milkes Realty Valuation, Dallas“We were anticipating a slowdown in the market and wanted to develop an avenue of business that would create a steady stream of income.” — Yvonne Jones, CCIM, CPM, Zifkin Realty Management LLC, Chicago“I help struggling companies rethink their business models, which includes determining the most profitable use of their real estate.” — Audie Cashion, CCIM, Alpha World Properties LLC, High Point, N.C.Stephanie Bell is associate editor of Commercial Investment Real Estate.