High demand for dealership acquisitions is continuing in 2021, according to firms that broker buy-sells.

"We are well on pace to exceed our record activity in 2020 of the sale of 37 dealership franchises, including the largest strategic transaction from a price perspective in history," said George Karolis, president of the Presidio Group.

Karolis is referring to last year’s $735 million acquisition by Asbury Automotive Group of most of the Dallas-based Park Place Dealerships, representing additional annual revenue of about $1.7 billion. The Presidio Group advised Park Place in the deal.

In 2021, Karolis and his competitors expect keen demand for dealerships to continue, led by publicly traded new-vehicle dealership groups such as Asbury and Lithia Motors, which have announced huge acquisition targets in the next few years.

"Our 2021 closings to date and pipeline are a leading indicator for Presidio of heightened buy-sell activity and another expected record year for our firm," Karolis said in an email.

Erin Kerrigan, founder and managing director of Kerrigan Advisors, said recently that she also expects another record year.

"Inertia is increasingly considered to be a bad strategy," she said during a recent webinar hosted by the American International Automobile Dealers Association. "Dealers feel they either need to commit to growth or sell their business."

There were 289 buy-sell dealership transactions in 2020, up 24% from 2019, Kerrigan wrote in her quarterly Blue Sky Report summarizing the year and the fourth quarter of 2020.

Cliff Banks, president of Banks Media Enterprises and creator of The Banks Report on dealership buy-sells, agrees demand is high for dealerships. "Q1 was as active as we’ve seen the market since the Great Recession," Banks said.

For all the talk about "disruptors" such as Tesla and Rivian supposedly shaking up auto retail, Banks said Wall Street investors seem to have latched onto the more traditional, franchised new-car networks. That’s driving stock prices higher for publicly traded new-car retailers. In turn, that generates the means for the public groups to make more acquisitions, he said.

However, Banks said he’s not convinced 2020 was a record year, statistically.

According to Banks, there were 226 transactions in 2020, representing 357 dealership "rooftops." That’s an increase of just three transactions compared with 223 in 2019. And by Banks’ reckoning, 2019 was down from 251 transactions in 2018.