The Mandate
A multi-unit car wash operator with three prior Front Range locations engaged Feasibility Study Consultant to prepare a third-party feasibility study supporting a SBA 7(a) financing request for a project located in Douglas County, Colorado. Total project capitalization fell within the $3M-$5M band. The capital provider, a specialty SBA lender, required documentation consistent with current program review standards. The analytical question put to the team: Did Castle Rock corridor traffic counts and registered-vehicle density support 78,000 annual paid washes by year three.
Engagement Scope
- Primary market area defined as a 3-mile drive-time
- Comparable supply set of 6 properties
- Demand model framework: traffic-count capture model with membership conversion overlay
- Financial projection horizon: 10 years
- Site inspection completed; operator interviews where applicable
- Primary data collection through field reconnaissance and third-party market data
Methodology Applied
Primary Market Area
The PMA was defined as a 3-mile drive-time from the subject site, calibrated to the demand catchment behavior typical of car wash assets in Colorado. The boundary captured the population, employment, and competitive supply base relevant to the subject's operating thesis.
Supply and Demand Reconciliation
The comparable supply set comprised 6 properties operating within the PMA or in directly substitutable submarkets. Demand was modeled using a traffic-count capture model with membership conversion overlay approach over a 10 years horizon. The reconciliation tested whether incremental supply, including the subject, could be absorbed within the projection window without compromising stabilized occupancy assumptions.
Capture Rate Calibration
The subject's capture rate was calibrated against the absorption capacity of the PMA. The analysis concluded that PMA absorption capacity exceeded subject build-out by a factor of 3.4 across the projection window, with a stabilized capture rate of 2.1%.
Exhibit 1: Comparable Supply Set, Colorado PMA
[Table or chart rendered in delivered report.]
Exhibit 2: Demand Projection Summary, 10 years Horizon
[Table or chart rendered in delivered report.]
Exhibit 3: Subject Capture Rate vs. PMA Absorption Capacity
[Table or chart rendered in delivered report.]
Analytical Conclusions
- I-25 frontage at the subject site recorded an AADT of 84,500 vehicles, 2.8x the typical express-tunnel demand floor.
- Comparable Front Range express tunnels averaged 71,000 to 92,000 annual paid washes.
- Unlimited-wash membership conversion projected at 38% of monthly transaction volume by month 18.
- Year-three DSCR of 1.48x exceeded the lender's 1.20x review benchmark.
Deliverable
The delivered report ran 104 pages with 24 exhibits distributed across nine analytical sections, plus appendices documenting comparable supply data, demographic inputs, and financial projection assumptions. The document was prepared to the documentation standards of the specialty SBA lender. The corresponding SBA 7(a) review framework guided exhibit selection and supporting documentation.