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> The real business of car washes is real estate. Is there any evidence of this? Companies like Mister Carwash lease nearly all their properties and when they

> The real business of car washes is real estate. Is there any evidence of this? Companies like Mister Carwash lease nearly all their properties and when they purchase plots seem to alway try to do a sale and lease. Their latest results claim they run 436 sites and lease 427: https://ir.mistercarwash.com/news-events/press-releases/detail/108/correcting-and-replacing-mister-car-wash-announces-fourth https://ir.mistercarwash.com/news-events/press-releases/deta...

zharknado 3y ago
Extra Space Storage will buy your self-storage outfit for cash, or give you “ operating partnership units in Extra Space Storage’s REIT [Real Estate Investment Trust].” $5B in closed transactions in the last 5 years. https://www.extraspace.com/acquisition/ https://www.extraspace.com/acquisition/
- ThrowawayTestr 3y ago
  That explains why there's half a dozen self storage buildings within 5 feet of my apartment.
  - idiotsecant 3y ago
    I am trying to imagine what kind of lovecraftian geometry you have the misfortune to live in
    - ThrowawayTestr 3y ago
      I'm barely even exaggerating. There's literally 5 within walking distance.
      - zharknado 3y ago
        “And although the space they occupy isn’t like normal space, nevertheless they are packed in tightly. Not a cubic inch there but is filled by a padlock, a garage door, a wheeled cart, the tip of a key code pad, so the effect is like one of those trick drawings and your eyeballs eventually realize that the space between each self-storage is, in fact, another self-storage.” Adapted from Pratchett, “Guards, Guards!” https://www.goodreads.com/quotes/7949916-and-although-the-space-they-occupy-isn-t-like-normal-space https://www.goodreads.com/quotes/7949916-and-although-the-sp...
poulsbohemian 3y ago
>The real business of car washes is real estate. What I see in both car washes and the storage business suggested by one of the child posters is low-labor cash flow. I can't speak for all geographies, but locally what I observe is car washes are built on low-value land where these new heavily automated car washes have got to be a cash cow once they are paid off, especially with monthly subscriptions. I do unfortunately see a lot of storages built on what could be much higher value land, which does cause me to wonder what kind of financial engineering I'm not seeing on the surface.
- mikhailfranco 3y ago
  One pattern I have seen in the UK is temporary manual car washes operating in former gasoline stations. Firstly, the location, visibility and site layout are obviously perfect. Secondly, the old brown-field gas station has sludge-filled underground tanks that cost a lot to remove, and do a full environmental clean-up. There are long delays to wait for a deep-pocketed developer, or for the site value to rise. In the meantime, lease it out to a bunch of enterprising migrants (in UK, often E.Europeans).
  - PaulHoule 3y ago
    There are stories about the UK being overrun with sketchy businesses like manual car washes and sweets shops https://www.theguardian.com/uk-news/2022/dec/26/more-than-90-of-hand-carwashes-in-uk-employing-workers-illegally-study-finds https://www.theguardian.com/uk-news/2022/dec/26/more-than-90...
- pas 3y ago
  > much higher value land getting a building permits for a car wash is much much much easier than for something higher value, and in absence of LVT ...
- deleted 3y ago
  [deleted]
fergie 3y ago
Probably Mister Carwash (the franchise organisation) is leasing out locations to its franchisees, in which case the whole business is absolutely about real-estate.
- helsinkiandrew 3y ago
  Except they don’t do franchises and the financial statement says they’re paying rent not receiving it. https://ir.mistercarwash.com/company-information/faq https://ir.mistercarwash.com/company-information/faq
  - pyrale 3y ago
    Who are they renting from, though? A company I previously worked for did rent 4-5 office buildings at ripoff prices, to a company belonging to one of the board members.
    - ufocia 3y ago
      Maybe REITs?

zharknado 3y ago

Extra Space Storage will buy your self-storage outfit for cash, or give you “ operating partnership units in Extra Space Storage’s REIT [Real Estate Investment Trust].” $5B in closed transactions in the last 5 years. https://www.extraspace.com/acquisition/ https://www.extraspace.com/acquisition/

ThrowawayTestr 3y ago
That explains why there's half a dozen self storage buildings within 5 feet of my apartment.
- idiotsecant 3y ago
  I am trying to imagine what kind of lovecraftian geometry you have the misfortune to live in
  - ThrowawayTestr 3y ago
    I'm barely even exaggerating. There's literally 5 within walking distance.
    - zharknado 3y ago
      “And although the space they occupy isn’t like normal space, nevertheless they are packed in tightly. Not a cubic inch there but is filled by a padlock, a garage door, a wheeled cart, the tip of a key code pad, so the effect is like one of those trick drawings and your eyeballs eventually realize that the space between each self-storage is, in fact, another self-storage.” Adapted from Pratchett, “Guards, Guards!” https://www.goodreads.com/quotes/7949916-and-although-the-space-they-occupy-isn-t-like-normal-space https://www.goodreads.com/quotes/7949916-and-although-the-sp...

poulsbohemian 3y ago

>The real business of car washes is real estate. What I see in both car washes and the storage business suggested by one of the child posters is low-labor cash flow. I can't speak for all geographies, but locally what I observe is car washes are built on low-value land where these new heavily automated car washes have got to be a cash cow once they are paid off, especially with monthly subscriptions. I do unfortunately see a lot of storages built on what could be much higher value land, which does cause me to wonder what kind of financial engineering I'm not seeing on the surface.

mikhailfranco 3y ago
One pattern I have seen in the UK is temporary manual car washes operating in former gasoline stations. Firstly, the location, visibility and site layout are obviously perfect. Secondly, the old brown-field gas station has sludge-filled underground tanks that cost a lot to remove, and do a full environmental clean-up. There are long delays to wait for a deep-pocketed developer, or for the site value to rise. In the meantime, lease it out to a bunch of enterprising migrants (in UK, often E.Europeans).
- PaulHoule 3y ago
  There are stories about the UK being overrun with sketchy businesses like manual car washes and sweets shops https://www.theguardian.com/uk-news/2022/dec/26/more-than-90-of-hand-carwashes-in-uk-employing-workers-illegally-study-finds https://www.theguardian.com/uk-news/2022/dec/26/more-than-90...
pas 3y ago
> much higher value land getting a building permits for a car wash is much much much easier than for something higher value, and in absence of LVT ...
deleted 3y ago
[deleted]

fergie 3y ago

Probably Mister Carwash (the franchise organisation) is leasing out locations to its franchisees, in which case the whole business is absolutely about real-estate.

helsinkiandrew 3y ago
Except they don’t do franchises and the financial statement says they’re paying rent not receiving it. https://ir.mistercarwash.com/company-information/faq https://ir.mistercarwash.com/company-information/faq
- pyrale 3y ago
  Who are they renting from, though? A company I previously worked for did rent 4-5 office buildings at ripoff prices, to a company belonging to one of the board members.
  - ufocia 3y ago
    Maybe REITs?