Some Light At the End of The Tunnel
Retail and restaurant expansion plans are perking up for the first time in two years.
The National Restaurant Association is reporting that its Restaurant Performance Index (RPI) index rose to its highest level in 27 months in February and capital expenditures and expansion plans are also in the rise. Given that we have lost more than 280,000 eating and drinking place jobs during the recession, and an untold number of restaurant locations, this is a welcome sign for the industry (read the full press release).
At the same time, Retail Lease Trac is reporting an increase in projected store openings for the first time in a year. Their tracking of 2,000 leading retail companies indicates plans to open over 65,000 stores in the next 24 months.
All of this bodes well for net lease investment which is leading the charge as one of the few bright spots on the commercial real estate horizon. Many restaurants and a large number of expanding retailers are single tenant entities and often look to investors as landlords and to assist with their expansion plans. Net lease investments have long had the attraction of very limited property management duties and maintenance compared to other real estate investments. In addition,with banks paying a paltry .25% on money market accounts, the opportunity to receive an 8% or better return on that same cash, and limit investment risk, is a compelling opportunity in current environment.
Tags: net lease investing, restaurant real estate, restaurant sales, retail expansion, Retail Real Estate Posted in
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