A newly constructed, single-tenant property occupied by Fast5xpress Car Wash in Ontario, California, has been sold for $3.5 million. Hanley Investment Group Real Estate Advisors announced the transaction, highlighting the property’s prime location adjacent to the Ontario Mills Mall, a major shopping and tourist destination in California.
The sale involved a new 35-year absolute triple-net ground lease, indicating a long-term secure investment. Executive Vice Presidents Bill Asher and Jeff Lefko of Hanley Investment Group represented the seller and developer, Evergreen Development, a national retail and multi-family development company with nearly five decades of experience. The buyer, a private investor from Orange County, California, represented themselves in the transaction.
“We attracted an all-cash, 1031-exchange buyer from Southern California and achieved premium pricing and a cap rate due to the 35-year initial lease and its exceptional location next to Ontario Mills,” Asher stated. He further noted the speed of the deal, “We secured the buyer before their downleg closed and finalized escrow before the buyer’s 1031 identification period expired.”
Fast5Xpress Car Wash is recognized as a leading and rapidly expanding express car wash chain in Southern California. Currently operating 20 locations with two more in development, the Ontario site, built in 2021, occupies a 4,446-square-foot building on 1.17 acres at 4392 E Ontario Mills Pkwy. Its strategic location at the signalized intersection of Ontario Mills Parkway and Inland Empire Boulevard, directly across from Ontario Mills Mall, provides significant visibility and customer access. The location also benefits from high traffic volumes, with Ontario Mills Parkway seeing 16,175 vehicles per day and close proximity to the Interstate 10 Freeway, which sees over 271,000 vehicles daily.
Asher emphasized the location’s strength, stating, “The Ontario Mills Mall area is a premier regional retail hub, drawing customers from across the Inland Empire. This creates a robust customer base ideal for a subscription-based express car wash service like Fast5Xpress.” Demographic data supports this, with an average household income of $96,660 within a five-mile radius and a high rate of vehicle ownership in Ontario. The property is also conveniently located near Ontario International Airport and Toyota Arena, further enhancing its appeal.
The car wash industry’s robust growth and investment potential were also highlighted. Asher cited market research projecting the U.S. car wash services market to reach $23.78 billion by 2030, with a compound annual growth rate of 5.5%. “The car wash business is service-based, making it resistant to internet disruption and positioned for sustained growth,” Asher explained. He pointed to increasing vehicle usage and the efficiency of the express car wash model as key drivers. The subscription-based model further enhances customer lifetime value, contributing to the sector’s profitability.
“Express car washes stand out as highly profitable tenants in the net-lease sector, boasting margins between 50% to 60%,” Asher added. “We anticipate continued strong investor demand for this asset class in 2023.” Hanley Investment Group’s expertise in this sector is evident, having sold 67 express car washes in the past three years, with further transactions in progress. This sale underscores the strong investor interest in Fast5Xpress Car Wash properties and the broader car wash market, driven by their stable, service-oriented nature and proven profitability.
