Anyone around in the 1970's is sure to remember the hit song by Rose Royce titled "Car Wash," as it was one of the most notable successes during the '70s disco era and was featured in the 1976 film with the same name. However, over the past few years, the term "car wash" has taken on a new success, especially in the commercial real estate industry – more specifically, within the net lease sector – with both private and institutional investors.

Up until a few years ago, the real estate associated with a car wash facility was generally bundled into the combined sale of the business operation and equipment to a new user or business owner. Today, however, astute operators are realizing they can best maximize their investment by executing a long-term lease for the underlying real estate and selling it off to a private net lease investor seeking a long-term passive investment.

According to the International Car Wash Association, more than 2.0 billion cars are washed each year in North America, and in 2019, 83.0 percent of Americans who own or lease a car used a professional car wash facility, generating more than $11.0 billion in retail sales.