1031 Exchange into an Absolute NNN Car Wash

Written By James` Masciarelli

Client: Private Investor

Transaction Type: 1031 Exchange into Absolute NNN Sale‑Leaseback Acquisition

Overview: Granite Capital Group was engaged by a private investor seeking to complete a 1031 exchange into a passive, low‑risk real estate investment. The client’s investment objectives were centered on deferring capital gains taxes, minimizing active management responsibilities, and securing stable, long‑term income through an institutional‑quality tenant.

Following the disposition of the relinquished property, GCG evaluated multiple net‑lease opportunities and advised that an absolute triple‑net (NNN) structure, under which the tenant bears all property‑level expenses, would best align with the client’s objectives. Emphasis was placed on tenant credit quality, lease structure, and long‑term income visibility.

GCG ultimately advised the client on the acquisition of an absolute NNN Mister Car Wash property in California. Mister Car Wash is a publicly traded operator with a national footprint and a proven operating platform. The asset features 20 years of remaining lease term with annual rent escalations, providing predictable cash flow and minimal landlord obligations.

The acquisition enabled the client to complete the 1031 exchange, defer capital gains taxes, and move into a hands‑off investment via a sale‑leaseback, with the operating tenant remaining in place on a long‑term net lease.

 

Services Rendered:

  • Accommodator coordination

  • Sourcing 1031‑eligible replacement property

  • Underwriting and financial analysis

  • Broker engagement

  • Letter of Intent creation

  • Negotiation of the Purchase and Sale Agreement and underlying lease terms

  • Performance of due diligence

  • Lease and tenant credit review

  • Escrow coordination

 

Summary: 1031 Exchange Executed

Outcome:

  • Capital gains taxes deferred

  • Long-term, predictable income secured

  • Minimal management responsibility

Upleg:

  • Property: Single-tenant, absolute-NNN-leased express car wash

  • Tenant: Mister Car Wash (Public Company)

  • Lease Term Remaining: ~20 years

  • Rent Structure: Annual Rent Increases

  • Investment Profile: Passive, long-term net-lease ownership

James` Masciarelli
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