From multifamily to car washes: how recurring revenue and EBITDA exits are rewriting the real estate playbook.
For more than two decades, Alex and the AC Capital team built their reputation on stabilized commercial real estate — acquiring Class B multifamily assets and driving appreciation through professional management and strategic repositioning.
But as borrowing costs climbed and capitalization rates compressed, once-profitable deals began projecting negative spreads.
“We can’t deliver the returns our limited partners expect by relying on leverage and passive rent growth anymore. The era of cheap capital driving easy appreciation is over,” Alex remarked.
Faced with this challenge, AC Capital’s acquisition team proposed a bold alternative: car wash platforms.
A new perspective on real estate deals
Alex’s initial reaction — “We buy buildings, not retail businesses” — quickly gave way to a new perspective. With traditional real estate returns under pressure, AC Capital saw an opportunity to take greater control over performance by embracing operational complexity.
To manage the retail side, they hired a seasoned chief operating officer from the consumer services industry, their first executive outside of real estate. This allowed the team to focus on building a scalable, efficient operation while continuing to leverage their core strengths in site selection, zoning and entitlements, and construction management.
The car wash model’s subscription-based revenue structure offered steady, recurring income, which is less vulnerable to seasonal fluctuations or economic shifts than traditional tenant leases. This predictable cash flow enabled AC Capital to shift its valuation strategy.
Rather than relying on cap rates tied to property income, they built a branded platform and pursued an enterprise value exit. By standardizing operations across multiple locations, they positioned the business for a sale based on EBITDA multiples, unlocking returns that traditional real estate alone could not deliver.
A new way to think about growth
While the AC Capital story is somewhat fictionalized, it reflects a real and growing trend among real estate fund managers: the search for more controllable, scalable, and resilient investment models. In today’s competitive environment, many firms are rethinking what it means to create value.
Car wash platforms offer a compelling alternative. Their recurring revenue model provides stability that traditional leases often lack. Their operational nature allows sponsors to influence outcomes more directly. And their potential for brand development and platform scaling opens the door to exits based on enterprise value, not just real estate fundamentals.
This shift doesn’t mean abandoning real estate altogether. Firms that can combine development know-how with operational leadership are well-positioned to thrive in this hybrid space.
How CLA can help with building enterprise value
CLA offers deep insight into the real estate and retail industries, supported by a team that collaborates across tax, valuation, operations, technology, and strategic advisory. We help fund managers assess new opportunities, structure scalable platforms, and position businesses for enterprise-level value.