Buyer acquires Denver car wash, will be new owner-user

A car wash in Denver sold for $2.9 million.

The buyer, 12131 N Federal Pkwy LLC, purchased the 5,160-square-foot Auto Spa at 12131 N. Federal Parkway from seller 1650 Canon LLC. The buyer will be the owner-operator at the property, taking over the responsibility of the car wash in addition to managing the property, which sits on a 55,319-sf lot. It sold for $562.02 per sf. Cody Stambaugh and Liz Morgan of Pinnacle Real Estate Advisors were transaction brokers in the sale.

The property was built in 2007, but the seller has owned it since September 2015. Stambaugh said the seller maintained the car wash with cosmetic upgrades but made no major renovations. While the business was recently closed for several weeks due to COVID-19, the seller also completed some minor repair work, including filling potholes and painting.

Since it was so well-maintained, Stambaugh said the buyer has no plans to make improvements or changes to the property. He said it also will keep the business name intact. This is the buyer’s first car wash asset. According to Stambaugh, the seller put the property up for sale to have more time to work on its other properties and development projects. It has other car washes in Northern Colorado as well as an office property in Denver.

Listed in summer 2019, Stambaugh said the property had a slow turnaround with a small buyer pool, which he attributed to the smaller size of the property. It went under contract in January but did not close until months later due to the onset of COVID-19.

“We were supposed to get Small Business Administration approval on March 30, but shortly before that date they started coming out with all the Paycheck Protection Program loans, so our approval was backed up a bit,” Stambaugh said. “When we finally got approval in April, we were going to close in early May, but we pushed that back because we wanted the seller to reopen, begin operating and provide a smooth transition for the new buyer.”

According to Stambaugh, the seller was able to obtain a PPP loan and provide assistance for its employees. The sale closed June 15.

Published in the July 1-14, 2020, issue of CREJ.