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The Madison Group arranged the $1,450,000 loan for a purchase of a NNN Car Wash

Tags: Credit Tenant, NNN loans, car wash loans, purchase financing, life insurance loan, Non-recourse
Wednesday, Nov 15, 2017
by Barb

The Madison Group (TMG), a leading source of Triple Net Lease financing nationwide, arranged the $1,450,000 purchase loan of a Mister Car Wash in Tucson, AZ.  The borrower’s goals were to purchase this triple-net asset with a long term self-amortizing loan. TMG secured the financing with a life insurance company on a 20-year fully amortizing fixed rate of 4.67%.

The property is a Mister Car Wash with a 20-year absolute triple-net corporate lease and approximate 2 per cent annual rent escalations. Mister Car Wash is the country’s largest operator of conveyor car washes. The car wash is at the intersection of Midvale Park Road and Irvington Road, easily accessible from Interstate 19. The Irvington Road exit from the freeway leads directly to the car wash.  Being in close proximity to a regional shopping center, the site benefits from high traffic counts of more than 44,000 vehicles per dayMister Car Wash currently operates 229 car washes and 34 lube centers across the United States. With 15 locations and their corporate headquarters in Tucson, they have the strongest presence of any operator in the city.

The borrower sold several properties and was looking for an asset that required little management and offered long term security.  He chose this NNN asset as his replacement property.  “Car washes are a more difficult asset to finance,” said Angela Kesselman, associate director of financing for TMG, “but with the strength of the tenant and the large down payment, we were able to get a life insurance company to finance the purchase.”

The borrower was able to purchase the property with a 20-year loan and a low 20-year interest rate.  The loan will be paid in full at the end of the lease and should receive regular lease payments as income for the next 20 years. 

 The loan we secured for our client will ensure that he has long-term income and no debt at the end of the lease, which was a big selling point for him,” said Kesselman.