A North Carolina-based real estate investment firm is raising capital to try to cash in on properties that benefit from a key change in the tax code passed by President Donald Trump’s One Big Beautiful Bill Act.

Madison Capital Group launched Car Wash & Convenience Opportunity Fund LLC, seeking to raise $200M to buy up convenience stores and car washes, it announced Tuesday.

The fund’s strategy is to target properties that are eligible for 100% bonus depreciation that was made permanent through the OBBBA. Eligible properties must be purchased and placed into service after Jan. 19, 2025.

The accelerated Schedule F bonus depreciation allows owners to apply for bonus depreciation on assets such as store fuel pumps and canopies and car wash tunnels, conveyors, blowers and vacuum systems. It also applies to land improvements like driveways, signage and drainage systems. 

“Convenience stores and express car washes represent compelling essential service businesses with consistent consumer demand, multiple revenue streams and potential tax efficiency,” Madison Capital Group CEO Ryan Hanks said. “We believe this strategy aligns with our broader philosophy of identifying real assets in growth markets and structuring opportunities designed to optimize income and after-tax performance for investors.”

The Charlotte-based firm, which has about $4B in assets under management, will focus on states with no income taxes and growing populations. States with no income tax include Florida, Texas, Tennessee, South Dakota, New Hampshire and Washington.

The new fund is the second that Madison is raising in this space. In June, just a month before the OBBBA was signed into law, an affiliate of the firm, Madison Capital Markets, launched Madison Convenience Fund I LLC, which sought to raise $125M in investments toward convenience and gas station facilities. Properties acquired by that fund would be managed by FreshStop. That fund is now closed, according to PitchBook.

Madison Capital is one of a growing number of investors looking to leverage the bonus depreciation rule. Since it became law, there has been a boost in gas station, convenience store and car wash investment sales.

By October 2025, investment sale activity in convenience stores jumped 27% over the previous year, compared to a 17% increase in overall retail investment sales, according to data from net lease-focused real estate firm The Boulder Group.

Just under 1 in 10 homes that broke ground in the United States in 2024 was being built for a tenant, not an owner, according to John Burns Research and Consulting data. 

Single-family rentals accounted for more than 1 in 4 rental unit construction starts in 2024.

Investors poured a combined $57B into single-family rentals in 2021 and 2022. Capital flows slowed in 2023 as rising interest rates squeezed deals, but the sector bounced back, with investment nearly doubling year-over-year to $6.3B in 2024. Analysts expect more growth ahead. 

“This niche is only 6, 7 or 8 years old, but it gained a ton of traction, not only on the demand side from tenants moving into a purpose-built rental community but also on the development side,” said Chris Nebenzahl, vice president of rental research at John Burns. “Developers have seen that demand and have really met the demand.”

Single-family rentals have exploded into the housing market, with 124,825 new rental homes built since 2017. Unit completions have grown in each of the last six years, and 2024 set the new high-water mark for deliveries with more than 34,000 units, according to Point2Homes data, an SFR leasing platform and subsidiary of Yardi Matrix. 

Private equity continues to pour money into the sector to take advantage of macroeconomic and cultural shifts that have made renting more attractive. Persistently high home prices, exacerbated in the last two years by elevated interest rates, have contributed to the sector’s success.

Single-family build-to-rent homes accounted for 27% of all rental housing starts last year, and SFRs accounted for 9% of all single-family housing starts, according to John Burns. 

“Institutional investors are increasingly favoring purpose-built developments over acquisitions, further boosting the growth of SFR/BTR properties,” Doug Ressler, manager of business intelligence at Yardi Matrix, wrote in an email. 

New SFR construction was up 41% year-over-year in 2024 even as traditional housing starts fell by 2%, according to John Burns. A quarter of the SFR developers, operators and investors surveyed by the research firm expect to break ground on more units this year compared to last. 

Today, it is cheaper to rent than to buy in all of the country’s 50 top metros, with the median mortgage priced around $2,703 per month, while rent in a comparable city is around $1,979 per month, according to Bankrate. Homeowners, unlike renters, also have to contend with property taxes, insurance and repair bills. 

Renting becomes even more attractive when factoring in that 30-year mortgage rates are floating between 6% and 7%, up from the sub-3% rates that were common before the Federal Reserve tightening policy in 2022. 

“It’s still expensive, and we’re waiting for our incomes to come up, but you don’t hear that many complaints about rents anymore. But you’re hearing more about home prices, and that’s because home prices have continued to go up,” said Ken Johnson, a housing economist and the real estate chair at the University of Mississippi.

Homebuyers look at today’s prices and sense that the market is near a peak, giving them more reason to hold off on closing a sale, he said. There are signs that Wall Street investors agree.

The stocks of Invitation Homes and American Homes 4 Rent, the two largest public SFR firms, are trading somewhere between a 20% and 35% discount on their net asset values, The Wall Street Journal reported. 

Invitation Homes has been trading at a discount since early 2022, but the gap has widened by 10 percentage points over the last 12 months. With home prices elevated, large institutional investors that own more than 1,000 homes accounted for just 0.3% of U.S. home purchases in the third quarter, according to Point2Homes. 

Sun Belt markets have drawn the bulk of investment in the last five years, after the pandemic provided a burst of energy to existing migration trends driving Americans south. 

Nearly 4,300 new build-to-rent homes broke ground in Phoenix in 2024, the most of any major city. It was followed by Atlanta, which saw 3,236 units break ground, Dallas, Houston and Charlotte. Since 2017, developers have broken ground on 42,000 single-family rentals across those five cities alone. 

“The concept is going to be most effective in large metropolitan areas that are growing,” Johnson said, highlighting cities with large populations of young professionals.

But SFR owners and developers have found themselves in regulatory crosshairs in recent years as the nation’s housing affordability crisis deepens.

Lina Khan, the head of the Federal Trade Commission under former President Joe Biden, took a parting shot at SFR providers in the waning days before President Donald Trump took over the White House. 

The FTC issued a mid-January request for public comment seeking input about how the federal watchdog could probe SFR operators and their impact on the housing market. The investigation would target at least 30 firms, each of which owned at least 1,000 rental units, the FTC said. 

“This proposed study would shed much-needed light on the mega-investors that have amassed huge portfolios of single-family rental units and potentially contributed to the housing challenges that Americans face,” Khan said in a statement at the time. 

FTC commissioners unanimously approved the notice, but it is unclear whether Trump’s nominee to replace Khan, Andrew Ferguson, will follow through with a probe. 

Private equity’s interest in housing has drawn scrutiny for years, including a 2022 ProPublica investigation that found the investment firms were behind 85% of Freddie Mac’s largest apartment deals since 2013.

Earlier this year, New York Gov. Kathy Hochul proposed blocking hedge funds and private equity firms from buying up large numbers of homes in the state. Similar proposals have been floated in Nevada and Minnesota. 

Analysts who spoke to Bisnow said private equity’s interest in single-family housing was a positive development for housing affordability. The build-to-rent communities popping up across the country are a supplement to housing options rather than a replacement, they said. 

It takes tens of millions of dollars in upfront investment to build homes for rent, and the cash has to come from somewhere, Johnson said. 

“We see politicians saying that we don’t need Wall Street or private equity in the rental market or building homes for ownership. That’s a prescription for disaster,” he said. “I don’t hear people saying we don’t need professional investors in the stock market. People that know what they’re doing create price efficiency and liquidity in the housing market.”

With 2023 now behind the retail sector, the current year nonetheless continues some of the headwinds that blew across the previous one. However, says Placer.ai in a new report, “every challenge also brings with it new opportunities, and many retailers are adapting to meet their customers’ changing wants and needs.” 

Titled 10 Top Brands to Watch in 2024, the white paper analyzes location intelligence and consumer demographic insights to identify 10 retailing brands gearing up for growth. The brands vary in their approach, as do the product categories they carry. 

“Some, like low-cost apparel and home furnishing stores, are benefiting from consumer trade-down,” according to Placer.ai. “Others are expanding into rural or suburban areas to meet customers where they are.” And although Macy’s recently made headlines by announcing plans to close approximately 150 underperforming locations, the white paper identifies a department store that is poised for growth this year.