Originally published on November 13, 2023, by Rick Scardino for NAIOP.
As a retail real estate specialist for more than three decades, I’ve seen many trends come and go. One day, it’s an explosion in the sale of bank pads. And now, I’m seeing that niche real estate investors – who historically operate with a bit of herd mentality – have crowned the car wash industry the latest investment darling. The evolution of the car wash industry and the resulting uptick in interest from investors, developers and operators alike has been fascinating to watch. Brands like Take Five, Waterway, Zips, Spotless and Mister Car Wash are just a few of the modern success stories bringing car wash investment into the headlines. So, what’s with the hype?
EXPERIENCE DRIVES CHANGE
The evolution of the car wash industry forms an intriguing narrative. From its origins to the present day, consumer preferences, technological advancements and environmental considerations have been the catalyst for change as the new-age car wash emerges at a rapid pace.
The primary car wash categories are 1) In-bay Automatic/Roll-over; 2) Self-Service; and 3) Conveyor. According to Grand View Research Inc., conveyor car washes are consistently the most profitable in the car wash sector in the U.S., where more than 72% of drivers use professional car wash services an average of 13 times per year. While the self-service wash still exists, it is becoming rarer as a better experience for slightly more money is likely available just down the street.