Higher CAP Rates
The viability of certain businesses after COVID-19, and therefore their ability to pay rents, has come into question as they seek bankruptcy protection. The increased risk results in lower prices and higher CAP rates.
Congress and the White House have committed more than $2T in stimulus to help small and medium sized businesses. The Fed has begun a historic drive to purchase Treasury and Corporate Bonds. As a result, mortgage interest rates are at historical lows.
Although the current situation is tragic, the conditions are even better than before for investing in certain kinds of commercial real estate.
M3N™ mitigates post COVID-19 risks by focusing on banking, gas, pharmacy, and retail and restaurant tenants that have drive-throughs or are otherwise best suited for a post-COVID-19 economy.
The combination of higher CAP rates, government stimulus, lower interest rates, and a focus on tenants that are best suited for a post-COVID-19 economy, results in higher margins for M3N™ without an increase in risk.