Buying a dry cleaning store..(or not)...

Bit long I?m afraid?.

Putting some thought into the idea of purchasing one or more small retail stores (possibly dry cleaning store) in popular shopping strips as long term investments.

I?m particularly interested in dry cleaning stores as I have other interests in dry cleaning which would enable me to use any purchased store as a drop off store to provide income should it become vacant. The continued same use of the store would mean that a drop off store should easily cover any outgoings whilst vacant as well as making the site more attractive to future possible dry cleaning tenants.

Anybody with any experience re the possibility of contamination on these types of sites?

I?ve had a look at the NSW EPA site and the list of contaminated sites. Out of 350 (approx) dry cleaner shops in NSW only 4 sites appear on the list of approx 1500 reported contaminated sites. Out of these 2 are industrial sized plants, 1 was found to have insignificant contamination and the other has not yet been assessed.

I will obviously have a chat with the EPA and get as much info as possible. Any site would require some serious environmental DD. Just thought I?d open it up to the SS brains trust who may have had some experience in this area.

Other alternatives are:
To purchase a small retail premises tenanted by other types of businesses that again could be used as a dc drop off store during any vacancy periods ? this would remove the contamination risk.
To purchase a vacant small retail store that could be used as a dc drop off store until a tenant could be found ? this would remove the contamination risk and reduce the purchase price.

My thoughts are that the following cons of buying a tenanted dc store:
Risk of existing contamination
Continued risk of contamination during ownership
Expensive environmental DD for small purchase
Higher price of tenanted premises due to popular price range for smaller investors who want a tenanted investment.

Probably outweigh the benefits of any extra revenue that a store may receive when used as a dc drop store during any vacancy period due to the continued same business use.

As an interesting point here?s two stores in the same complex, one tenanted by a dry cleaner and one vacant.

Love to hear your thoughts
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The dry cleaning shop has good frontage to Military Rd whereas the other will be more difficult to lease as it has less exposure.

What are they asking for the dry cleaner?
Understood about the exposure.
Don't know what they're asking. Its going to auction. Wasn't really interested in these sites in particular so havent enquired. Just thought they were interesting examples in the same complex.

Any experience on the contamination side of things Scott?
Not recently, I recall that they use some volatile chemicals in the process but not to the same extent as in previous decades. This is evidenced by allowing the use in shopping centres.

Power requirements are also quite high.
Yeah, perchloroethylene seems to be the main issue. Can get into the ground through spills and by unethical disposal down the drains by tenant. Leaky drains lead to ground/water contamination. That's what scares me. You're relying on the tenant to be careful/do the right thing otherwise you could be up for a big expense (poss/prob more than the value of the property). Risk reward ratio doesn't seem good.
However relatively few examples considering the number of sites.
I've worked in a laundramat which offloaded to a dry cleaning shop. The chemicals used are supposed to be carcigenic - it is inevitable that you will inhale it. Go into any drycleaner and take a sniff. Imagine breathing that all day.

New chemicals are supposed to be safer but who knows.

Need a good position for this sort of business, like next to a train station where customer drops off in morning and picks up after work.

And don't damage that $2000 wedding dress just before the big day! Customer issues do arise.