Property Play: Here’s why car wash real estate is cleaning up

Key Points The 100% bonus depreciation passed by the Trump administration is delivering a boost to car wash real estate. The car wash business has evolved markedly over the last decade as private equity investors flock to the recurring revenue. Typically, private equity buys the car wash business and then sells the property to an individual investor. A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox. Much like the funeral business, car washes are a pretty safe bet: Cars get dirty. They always will. The real estate that these washes sit on may be an even safer bet for investors, thanks to tax laws that were updated in their favor last year. The main driver behind the car wash play is the 100% bonus depreciation benefits investors can receive in the first year under the tax laws enacted during the Trump administration, according to Camille Renshaw, co-founder and CEO of B+E, a tech-driven real estate brokerage firm specializing in net lease properties and 1031 exchanges. Car washes are often triple net lease, or NNN, properties – agreements where the tenants pay the taxes, building insurance and maintenance and repair costs. …