According to a recent report by Northmarq, the net lease retail market has seen significant growth over the years. From $9 billion in 2022, it has now reached over $24 billion. However, one category that stands out is quick-service restaurants (QSRs), which have exceeded expectations and surpassed other categories within this space.
In fact, QSRs are currently among the most sought-after assets for private investors due to their reliable cash flow in an uncertain financial climate. This information was shared by Bryn Feller, Isaiah Harf and Christian Tremblay from Northmarq in their new report.
Despite cap rates for other retail segments increasing slightly, cap rates for QSR assets have remained stable at around 5-6%. This indicates a strong investor appetite for these properties.
The success of QSR properties can be attributed to several key factors mentioned in the Northmarq report. These include low price points that make them attractive to private investors with available funds and reduced dependence on 1031 exchange investors. Additionally, long lease terms and ease of ownership also contribute to their appeal as investments.
Furthermore,
the lack of competition from online retailers is another advantage cited by the report as you cannot get a fresh hot burrito delivered via Amazon – making these properties even more appealing to potential buyers looking for stability and security in their investments.
