NATIONWIDE EXPRESS AUTO WASH TRUST
Raise of up to $4,000,000
INVESTMENT RETURN:
An annualized preferred base return via cash distributions of 7.07%
PLUS
Up to 70% participation in returns
(exceeding the annualized preferred base return of 7.07%, paid monthly and in arrears)
A unique real estate investment structured to provide unit holders with tax advantaged monthly income plus participation in long term investment growth. Auto Wash businesses provide a source of stable cash flow in various economic climates, operate with very low-cost structures and high profit margins and are less affected by volatility in the public markets. The investment is backed by urban industrial real estate in Coquitlam, one of the fastest growing cities in BC.
The Opportunity
Accredited Investors have the limited opportunity to subscribe at pre-development pricing, in a fully completed and operational modern Car wash Tunnel. The risks around financing, permitting, and construction have been mitigated at this stage of the project. An independent 3rd party valuation has just been completed and their valuation estimate is approximately $25M. This would equate to an approximate unit value of $125 - $148 per unit (offering is at $105 per unit). Investors will benefit from the capital appreciation achieved through the development process, while subscribing at pre-development unit pricing.
NationWide is utilizing this opportunity to reduce the cost of capital given the current interest rate environment. A 7.07% preferred base return is accretive to all investors versus 12% debt financing. Loan to value ratio’s are very conservative and the project metrics remain strong. The reduction of the cost of capital is a benefit to all investors, reducing financing cost, and ultimately accelerating the cash distribution process. NationWide is using this debt reduction opportunity to further strengthen the investment opportunity on behalf of all investors. The investment is backed by urban industrial real estate in a prime location.
About the Auto Wash
The 29,287 sq. ft. Coquitlam property (1035 Lougheed Highway) houses one of Canada’s most modern and technologically advanced 5000 sq. ft, 160 foot, Exterior Detail Tunnel System Car Wash. This advanced system, capable of washing, waxing, sealing, applying tire shine, and drying up to 180 cars per hour, offers seamless customer experience. The highly visible, high profile property is located right on Lougheed Highway. It is strategically positioned on one of the busiest corridors in greater Vancouver and adjacent to the Trans Canada Highway. Situated right across from Ikea, this exceptionally well located property has approximately 56,000-63,000 vehicles passing by daily. The Administrator forecasts that approximately 1% of passing traffic will enter the car wash facility.
The full development cycle (planning, permitting, construction) has been completed, with the issuance of our operating permit from the City of Coquitlam, in Mid March 2024. The Car Wash tunnel is now operational and receiving outstanding reviews from the community.
NationWide raised approximately $13.5M in equity along side a planned debt component of approximately $4.5M to complete the $18M Car Wash Development. The original equity component capital raise was closed in April 2021. Interest rates have increased significantly since April of 2021. Construction financing, where possible, is now typically prime plus 4-5% in this commercial development sector. The current $4.5M construction loan debt on Coquitlam is at a rate of approximately 12%.
Click here to see the Coquitlam Auto Wash Website
Offering Summary (see full details in Term Sheet linked below):
ISSUER: NationWide Express Auto Wash Trust (the “Trust”)
MAXIMUM OFFERING SIZE: $4,000,000 (38,095 Trust Units)
SECURITIES OFFERED: Participating Preferred Class A trust units (the “Trust Units”)
PRICE PER SECURITY: $105 per Trust Unit
INVESTMENT OBJECTIVES: The investment objective of the Trust is to provide Holders of Participating Preferred Trust Units ("Trust Units") with:
+ three components to an investment return:
1. a preferred base return via cash distributions of 7.07%;
2. up to 70% participation in the returns exceeding an annualized preferred base rate return of 7.07%, paid monthly and in arrears; and
3. capital appreciation on disposition of the Development Property;
+ tax advantaged monthly income distributions, as a portion of the distributions will be taxed as a return of capital; and
+ an investment backed by urban industrial real estate through the Trust’s ownership of the Partnership.
PREFERRED CASH DISTRIBUTIONS: Investors are expected to receive monthly cash distributions approximately by Q4 2024.
MINIMUM SUBSCRIPTION: $25,000, which can be increased by multiples of $1,000.
REDEMPTION: Quarterly redemption provisions are available subject to certain restrictions.
LIQUIDITY EVENT: Terms and timing of a liquidity event (if any) will depend on opportunities available at the time.
ELIGIBILITY: The Trust Units are NOT qualified investments for Registered Plans, which include RSPs, RIFs, DPSPs, RESPs, RDSPs and TFSAs.
GENERAL PARTNERS FEE: 2% of the Net Asset Value of each Class, calculated and paid monthly.
PERFORMANCE BONUS: The General Partner will be entitled to a performance bonus equal to a 30% share in Distributable Cash after investors have received annualized preferred base returns.
Click here to view the full term sheet
Investment Highlights:
• Construction of the Coquitlam site has completed and the car wash is now open and operating 7 days a week between the hours of 8 am and 8 pm.
• Grand opening charity event is planned for the week of Saturday, May 4 - Saturday, May 11, 2024 from 8 am to 8 pm, where consumers can receive car washes by donation, with all proceeds going to Greater Vancouver Food Services.
• Coquitlam site lot shape provides approximately 300 feet of car wash frontage along Lougheed highway.
• Strong population and traffic growth as well as commuter demographics support the development of the car wash facility.
• Revenue will be generated through multiple sources on site. There will be membership programs, corporate/fleet wash programs, as well as vacuum revenue, floor mat cleaning, and car detailing supply sales which will all add to the revenue base.
• The car wash facility offers an environmentally friendly solution to car washes (including 100% water recycling and rainwater harvesting technology), an important component in today’s marketplace.
• In-house management offers best of class operational excellence as well as the best possible customer service, marketing, training and development.
Ascenta Offerings are available on a ‘first-come, first-served’ basis. Please express your interest in participating in this financing and we will attempt to hold a position for you. Once you have been confirmed, we will provide you with a Subscription Agreement and Ascenta’s Know Your Client information.
Members of Ascenta may invest alongside its network in this offering.
Closings of this financing will occur at the Company’s discretion.
The Company has agreed to pay a finder’s fee of up to 8% cash for the financing as well as a 0.5% trailer fee.