We talk a lot about walkable urban communities on this blog, and I'll be the first to admit that this is my own bias. It's my preference. But at the same time, we can't ignore that, as of 2022, there were nearly 280 million registered personal and commercial vehicles in the United States. And that only about 8.3% of households do not have a vehicle. Most households drive in this part of the world.
The result is that lots of people want to regularly wash their car(s). According to Bloomberg
We talk a lot about walkable urban communities on this blog, and I'll be the first to admit that this is my own bias. It's my preference. But at the same time, we can't ignore that, as of 2022, there were nearly 280 million registered personal and commercial vehicles in the United States. And that only about 8.3% of households do not have a vehicle. Most households drive in this part of the world.
The result is that lots of people want to regularly wash their car(s). According to Bloomberg
The obvious reason for this is that there are a lot of drivers. But why right now? Apparently, there are other more specific reasons for the recent boom in car washes:
Now, washes can take just 90 seconds, labor costs have been automated down, and recurring revenue from memberships has eliminated weather risks. Plus, the tax reforms enacted in 2017 by former president Donald Trump allowed car wash owners to claim 100% depreciation on new equipment — a generous subsidy to further investment. While that incentive was written to shrink over time, the tax proposal currently in Congress would restore the 100% depreciation allowance.
This has the PE and real estate industries interested:
“If private equity thinks it’s sexy, they’re gonna throw money at it, right?” said Emil Khodorkovsky, founder and CEO of Forbix, a real estate firm that just acquired a car wash in Santa Monica, California. “It’s a basic business. It isn’t complicated finance. Certain actors are getting squeezed but this one still has a much higher-yielding return than an apartment building or a retail center.”
It's hard to think of a retail use that is more antithetical to walkable urban communities. Even most drive-through places have the ability to service things that aren't cars. It is also possible to go through a drive-through on a bicycle or other micro-mobility device. I have done this before and it was fun. But going through a car wash on a bicycle is probably a lot less fun.
Intuitively, as long as there are lots of cars, there will be lots of people who want car washes. At the same time, there may even be a more urban use case, here. If you happen to have a garage and a driveway, there is always the possibility that you could wash your own car. But if you live in a walkable urban center and you park your car in a stacker accessed via an elevator, it's probably a lot harder for you to do that.
In this case, there's a subscription for that.
In the world of finance, carried interest is the share of the profits in an investment that a manager (of said investment) earns in excess of what they may have contributed to the partnership. For example, let's say that a manager is putting in 10% of the cash that is required for a particular project. If the project goes really well, the manager, through carried interest, could earn more than their 10% share of the profits. Put another way, it is a performance fee that is intended to incentivize and reward the manager.
Today I learned (credit to Lucas Manuel) that the origins of carried interest go all the way back to the Middle Ages. The concept and term supposedly came about because the captains of European ships would take a share of the profit from the "carried goods" that they were transporting. This was to compensate them for the work and for the risk of sailing all over the place. Keep in mind that, just like today, any number of things could have gone wrong. Maybe you don't make it or maybe pirates steal all of your goodies.
There is also a compelling argument (made here) that this simple concept has been instrumental, since the Medieval Period, in improving the fortunes of many, but most notably those that weren't born into riches and that were starting out with limited means. Carried interest allowed Medieval merchants to (1) initiate sailing ventures for which they didn't have the requisite money and (2) earn a disproportionate amount of the profits so that they could more quickly improve their socioeconomic position.
Do good work, take on some risk, and then hopefully make a few bucks. That's still how things work today. Supposedly David Rubenstein, cofounder of The Carlyle Group, also talks about the origins of carried interest in his recent appearance on the Tim Ferriss Show. I say supposedly because podcasts generally take too long for me and I haven't listened to it.
The below press release went out this morning. It's a good news story that shows the resiliency of grocery and food logistics.
The obvious reason for this is that there are a lot of drivers. But why right now? Apparently, there are other more specific reasons for the recent boom in car washes:
Now, washes can take just 90 seconds, labor costs have been automated down, and recurring revenue from memberships has eliminated weather risks. Plus, the tax reforms enacted in 2017 by former president Donald Trump allowed car wash owners to claim 100% depreciation on new equipment — a generous subsidy to further investment. While that incentive was written to shrink over time, the tax proposal currently in Congress would restore the 100% depreciation allowance.
This has the PE and real estate industries interested:
“If private equity thinks it’s sexy, they’re gonna throw money at it, right?” said Emil Khodorkovsky, founder and CEO of Forbix, a real estate firm that just acquired a car wash in Santa Monica, California. “It’s a basic business. It isn’t complicated finance. Certain actors are getting squeezed but this one still has a much higher-yielding return than an apartment building or a retail center.”
It's hard to think of a retail use that is more antithetical to walkable urban communities. Even most drive-through places have the ability to service things that aren't cars. It is also possible to go through a drive-through on a bicycle or other micro-mobility device. I have done this before and it was fun. But going through a car wash on a bicycle is probably a lot less fun.
Intuitively, as long as there are lots of cars, there will be lots of people who want car washes. At the same time, there may even be a more urban use case, here. If you happen to have a garage and a driveway, there is always the possibility that you could wash your own car. But if you live in a walkable urban center and you park your car in a stacker accessed via an elevator, it's probably a lot harder for you to do that.
In this case, there's a subscription for that.
In the world of finance, carried interest is the share of the profits in an investment that a manager (of said investment) earns in excess of what they may have contributed to the partnership. For example, let's say that a manager is putting in 10% of the cash that is required for a particular project. If the project goes really well, the manager, through carried interest, could earn more than their 10% share of the profits. Put another way, it is a performance fee that is intended to incentivize and reward the manager.
Today I learned (credit to Lucas Manuel) that the origins of carried interest go all the way back to the Middle Ages. The concept and term supposedly came about because the captains of European ships would take a share of the profit from the "carried goods" that they were transporting. This was to compensate them for the work and for the risk of sailing all over the place. Keep in mind that, just like today, any number of things could have gone wrong. Maybe you don't make it or maybe pirates steal all of your goodies.
There is also a compelling argument (made here) that this simple concept has been instrumental, since the Medieval Period, in improving the fortunes of many, but most notably those that weren't born into riches and that were starting out with limited means. Carried interest allowed Medieval merchants to (1) initiate sailing ventures for which they didn't have the requisite money and (2) earn a disproportionate amount of the profits so that they could more quickly improve their socioeconomic position.
Do good work, take on some risk, and then hopefully make a few bucks. That's still how things work today. Supposedly David Rubenstein, cofounder of The Carlyle Group, also talks about the origins of carried interest in his recent appearance on the Tim Ferriss Show. I say supposedly because podcasts generally take too long for me and I haven't listened to it.
The below press release went out this morning. It's a good news story that shows the resiliency of grocery and food logistics.
On a related note, Slate Retail REIT also recently announced that, as of April 14th, it had already collected 80% of April rents and was outperforming the industry. At that time and based on industry feedback, the REIT estimated that a number of retail strip center landlords were seeing April rent collections in the range of 40-50%.
TORONTO and LONDON, April 23, 2020 /CNW/ -- Slate Asset Management ("Slate"), a leading alternative asset management platform with a focus on real estate, announced today the final close of its Slate European Real Estate Fund III ("Slate Europe III"). Consistent with its predecessor funds, Slate Europe III will target grocery real estate assets in Europe. The oversubscribed closed-end fund exceeded its target size of €200 million and closed at its hard-cap of €250 million.
"During this unprecedented time of market disruption, we are pleased to close Slate Europe III at its hard-cap and are thankful for the confidence investors from diverse geographies continue to place in us as Slate expands its presence across Europe," said Brady Welch, Slate's London-based Founding Partner. "We have been investing in last-mile logistics for some time and are proud to launch our third fund in the European grocery real estate space since 2016, a feat that underscores our commitment to the sector and validates the importance of last-mile solutions in the grocery real estate market."
Since December 2016, Slate has completed a total of 250 grocery property acquisitions in Europe comprising over 450,000 square meters of gross leasable space. Slate has European offices in London, Frankfurt, Dublin and Luxembourg.
About Slate Asset Management
Slate Asset Management is a leading real estate-focused alternative investment platform with over $6.5 billion in assets under management. Slate is a value-oriented manager and a significant sponsor of all of its private and publicly traded investment vehicles, which are tailored to the unique goals and objectives of its investors. The firm's careful and selective investment approach creates long-term value with an emphasis on capital preservation and outsized returns. Slate is supported by exceptional people, flexible capital and a demonstrated ability to originate and execute on a wide range of compelling investment opportunities. Visit slateam.com to learn more.
For Further Information
Investor Relations
+1 416 644 4264
ir@slateam.com
SOURCE Slate Asset Management L.P.
On a related note, Slate Retail REIT also recently announced that, as of April 14th, it had already collected 80% of April rents and was outperforming the industry. At that time and based on industry feedback, the REIT estimated that a number of retail strip center landlords were seeing April rent collections in the range of 40-50%.
TORONTO and LONDON, April 23, 2020 /CNW/ -- Slate Asset Management ("Slate"), a leading alternative asset management platform with a focus on real estate, announced today the final close of its Slate European Real Estate Fund III ("Slate Europe III"). Consistent with its predecessor funds, Slate Europe III will target grocery real estate assets in Europe. The oversubscribed closed-end fund exceeded its target size of €200 million and closed at its hard-cap of €250 million.
"During this unprecedented time of market disruption, we are pleased to close Slate Europe III at its hard-cap and are thankful for the confidence investors from diverse geographies continue to place in us as Slate expands its presence across Europe," said Brady Welch, Slate's London-based Founding Partner. "We have been investing in last-mile logistics for some time and are proud to launch our third fund in the European grocery real estate space since 2016, a feat that underscores our commitment to the sector and validates the importance of last-mile solutions in the grocery real estate market."
Since December 2016, Slate has completed a total of 250 grocery property acquisitions in Europe comprising over 450,000 square meters of gross leasable space. Slate has European offices in London, Frankfurt, Dublin and Luxembourg.
About Slate Asset Management
Slate Asset Management is a leading real estate-focused alternative investment platform with over $6.5 billion in assets under management. Slate is a value-oriented manager and a significant sponsor of all of its private and publicly traded investment vehicles, which are tailored to the unique goals and objectives of its investors. The firm's careful and selective investment approach creates long-term value with an emphasis on capital preservation and outsized returns. Slate is supported by exceptional people, flexible capital and a demonstrated ability to originate and execute on a wide range of compelling investment opportunities. Visit slateam.com to learn more.
For Further Information
Investor Relations
+1 416 644 4264
ir@slateam.com
SOURCE Slate Asset Management L.P.
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