Laundromat real estate has been booming in recent years. That development is creating new opportunity—and new pressure—for operators and investors alike. According to some US laundromat brokers, there’s an extremely high demand for existing stores, with shifting target groups — less mom and pop, more professionals. On the other hand, manufacturers and distributors are increasing demand as they build stores themselves or start franchising. At the same time, more capital seems to be available and it results in a fierce competition for the best sites.
That competition is intensified by macro trends. CBRE reports that retail vacancies across well-located neighborhood, community, and strip centers are at historic lows. New retail supply has been limited and real estate availability is expected to remain tight through years end. Thus, laundromats are in competition with not just colleagues, but also with other retailers. Operators who lease space, should be aware that careful negotiation and long-term thinking is essential.
The increasing number of new stores coming to market with a modern look and layout has an effect on perceptions of laundromats, too. For instance, today’s real estate must support the ability of more services. Drop-off, pickup and delivery, and commercial accounts are growing rapidly, often with two to three times the margin of traditional self-service. Finally, operators are starting to think in hub-and-spoke models: one large store for processing, surrounded by smaller drop-off locations.
