Converting any building into a self-service laundry carries a variety of challenges. Taking a 100-year-old, downtown storefront, and turning it into a modern, customer-friendly laundry, however, brings additional hurdles — both structural and governmental.This two-part story looks at how Automated Laundry Systems undertook this challenge, and the steps it took to create the Laundromat of San Pedro, Calif.A DAUNTING TASKThe first thing that strikes you is the space — 3,500 square feet of it. The laundry is hopping, yet nobody is cramped for folding-table space, or looking around for a dryer pocket. The store strikes a perfect balance of open area and ample equipment. It’s bright, clean and has a modern look — all the hallmarks of an Automated Laundry Systems store.Standing amid the gleaming stainless steel equipment, Emelia Kerian, Automated Laundry Systems, can’t help but smile. She envisioned this exact scene many months earlier, before the first washer-extractor was wheeled in. Kerian and her Burbank, Calif.-based company see opportunities where others might only see a dated building in need of a major renovation.“Quite honestly, we knew the building needed work, but we couldn’t even fully assess just how much work,” Kerian recalls. “Our engineer walked a few steps in to the building and gave up. He told us he’d come back once it was emptied out,” she adds.The space, which was home to three businesses — a thrift store, electrical supply shop and a warehouse — was, in some spots, filled from floor to ceiling with boxes and other junk.This might have caused other firms to search for a less-challenging location. However, Automated has tackled tougher projects. “In terms of scope of the project, this one ranked a seven on a scale of 1 to 10,” Kerian says.WORTH THE EFFORT?The San Pedro site was presented to Automated by a landlord who the company had worked with on several other projects. That credibility was enough for Kerian to pull the area demographics.“This particular site is very unique,” Kerian explains. “The county [of Los Angeles] finishes there,” she adds, comparing it to all the communities that make up the greater Los Angeles area.While many other Los Angeles locations might draw from a wider circle, and thus a more dense population, this downtown site faces a natural border with the ocean. Even so, the demographics were excellent, and enabled the distributor to move on with the project.There are nearly 17,000 residents within a half-mile of the site, including a large Hispanic population. In addition, the average household size is three occupants, with rentals making up about 88% of the housing mix.Dan Bowe, North American manager for IPSO, emphasizes the importance of Automated going beyond just the surface-level demographics.“We drill down to the number of core customers required to make a profit,” Bowe says, adding that “in our business model, the core-customer population supercedes anything else.”Other positive factors included being located along a busy downtown street, and possessing ample parking in the rear of the building. Plus, no major competition existed within a mile.GAUGING THE SCOPEThe next move was to get a better idea of the scope of the work that was needed to turn this building into a modern laundry. It started with the basics.“The building had good ‘bones,’ and could be developed into one space,” Kerian says. They estimated four beams would need to be added to the internal structure.With this information, Automated began working on the build-out costs. Kerian offers a tip to others considering such a project: “We always take the worst case.” However, for this project, like many others, they encountered savings along the way, such as only needing two structural beams instead of the four they anticipated.One can tackle similar projects and underestimate costs, either due to optimistic views or simple inexperience, Kerian says. Unforeseen utility upgrades, particularly electrical, can lead to costly lessons for owners.It’s also crucial to know if a site can support a laundry’s utility requirements, which are sizable, Bowe says.For this location, the planned building improvements, including major upgrades to water, electrical and gas services, were handled by the landlord, a positive byproduct of the real estate market.“Two to three years ago, it was difficult to find a location, and there were no TI (tenant-improvement) funds being offered; it was take it, or leave it,” Kerian says.The rising number of vacancies during the past year puts tenants in an advantageous position to negotiate lease terms. Landlords favor laundries because the tenants often desire long-term leases.“A coin laundry is a huge investment, and without a long-term lease of two 10-year terms, and an additional five-year option, it’s hard to justify the expense,” Kerian says.The key to negotiating a lease, she adds, is knowing not only the planned build-out costs, but what the overall value of the store will be should the owners want to sell it.“This is where a solid, but conservative pro forma is a necessity,” Bowe says. “It’s easy to get in over your head by being too aggressive in projections and, as a result, overpay on a lease.”In this case, Kerian adds, lease terms worked out to the benefit of both parties, and cleared the way, for the laundry to move forward (providing the city of San Pedro had no objections).To watch a video about this conversion project, click here.
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