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Why We Hunger For Fast Food

April 17, 2018

 

 

Investors continue to have an appetite for quick- service restaurants (QSR).  Numerous factors contribute to the hunger to own these properties - price point, long-term leases, rent escalations and brand names that are recognizable to buyers all play roles in investors, particularly 1031 investors, desire to add QSR assets to their portfolios.

 

The current environment is causing both corporate and franchises to look to liquidate some of their real estate holdings.  Why?  Investors still have a real appetite for these assets and the proceeds are being used for opening new locations, remodeling existing stores and even paying down debt that they may have on their books.  Inventory is still ample and unlike most other retail sectors in that QSR seems somewhat insulated from online competition.  Yes, there are fast food delivery options but brick-and-mortar is still necessary.  Where Amazon is taking over the world sector by sector, QSR is still unaffected by the “Amazon Effect” and this provides security for investors further bolstering their appetite for these assets.

 

QSRs are, in fact, very aware of what their customer’s appetites are.  They have made sure that the healthy food movement has been reflected in updated menu options.  Additionally, they have incorporated technology to better service the customer and make their experience more seamless.  From the ability to order online to digital payments, QSR is not looking to be left behind as technology continues to move the world forward. 

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Lcasano@raemcapital.com

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