How the SBA's Dry Cleaning Requirement Changes Impact Your Due Diligence Considerations

Marshall Stanclift

Dry cleaners are a confounding conundrum in the world of commercial real estate. They generally rent on economical space but generate a lot of business and foot traffic for other establishments. They are considered not just profitable business models, but a critical anchor in a mixed-tenant commercial strip center.

Unfortunately, dry cleaners also pose a significant potential health risk to themselves and neighboring tenants. This is mostly due to historical use of a cleaning solvent called perchloroethylene (PERC), often causing a “dry cleaner headache” for property owners. First introduced to dry cleaning in 1931, demand for this highly effective cleaning agent increased throughout the 1980s and peaked in the 1990s when closed loop machines were introduced.