Car Wash Valuation: Two Assets, One Deal

A car wash that owns its real estate is fundamentally different from one that leases. When you own both, a buyer is acquiring two distinct assets: the income-producing business and the commercial property underneath it. These two assets are valued using completely different methodologies, and conflating them is one of the most common mistakes owners make when trying to estimate what their car wash is worth.

The business is valued on its earnings. Specifically, buyers look at Seller's Discretionary Earnings and apply a multiple that reflects the quality of those earnings: how predictable they are, how dependent they are on the owner, and how much growth potential exists. The real estate is valued independently, using cap rates, comparable property sales, and the replacement cost of the structures. A car wash property in a high-traffic corridor with excellent ingress and egress could be worth substantially more than the business it houses.

This distinction matters because it creates structural options in how you sell. You can sell everything together, sell the business and lease back the property, or in some cases sell the real estate separately. Each structure has different tax implications, different buyer pools, and different total value outcomes. Understanding the split is the first step in structuring a sale that maximizes your total return.