Interest rates are expected to remain low for the foreseeable future, according to D. Scott Lee, managing partner at Tauro Capital Advisors. The low interest rate environment combined with the high availability of capital creates a veritable storm of opportunities for investors.
“The Fed’s announcement that it will cut its bond purchases will likely end up impacting interest rates. That said, it looks like the impact on future interest rate hikes is unlikely to materialize until the middle of next year. And then the rate hikes will probably be minimal, ”Lee told GlobeSt.com. “Interest rates have also remained historically low and the availability of capital remains strong. There is ample capital hungry for transactions and investors can capitalize on the foreclosure of rates now when they are low. “
Lee expects capital markets to remain active through the end of the year and into 2022, and industrial and multi-family assets will continue to be preferred assets due to their strong performance. “Overall, our outlook for commercial real estate investments and capital markets is optimistic for the fourth quarter and through 2022. Investing and lending activity has continued to gain momentum and we expect this to continue. Momentum will continue into the New Year, ”said Lee. “Naturally, multi-family and industrial assets continued to perform. “
While multi-family and industrial buildings are the best performing assets, there are still retail opportunities that emerged during the pandemic, and ghost kitchens are a prime example. “Ghost kitchens have become a great opportunity for investors,” says Lee. “Ghost Kitchen, also known as Dark Kitchen, Cloud Kitchen, or Virtual Restaurant, is a restaurant that does not provide on-site or take-out food services to customers. It’s mostly virtual and relies on food delivery apps like Grubhub, website / web portal orders, and / or calls to drive sales.
While this asset class is relatively new, there is already significant traction. “The global cloud kitchen market size was estimated at US $ 43.1 billion in 2019 and is expected to reach US $ 71.4 billion by 2027,” said Lee. “Before the pandemic, food delivery apps and delivery services were in increasing demand. The pandemic has accelerated this trend, and we expect to continue to see this increase in the years to come. “