CPI Surprises Revealed: Unlock Retail Real Estate's Future!

Marc Perlof • December 13, 2023

Hey, Retail Real Estate Rockstars! Today, we're diving into some important economic updates and how they impact our world of retail real estate. Let's get into the nitty-gritty of the latest CPI data and what it means for us.

 

Understanding the Economic Landscape for Retail Real Estate

 

1. CPI's Small Increase: This November 2023, the CPI went up by just 0.1% ¹. It might not seem like much, but even small changes can have a big impact on consumer spending and our retail spaces.

 

2. Food and Gas Prices: Food prices at home slightly increased (0.1%) ², which could mean more customers in grocery-anchored properties. Meanwhile, significant drops in gasoline prices (down 6% monthly and 8.9% year-over-year) ² could leave consumers with more money to spend.

 

3. Unexpected Changes in Prices: The prices of used cars went up by 1.6%, against the expected decline ². On the other hand, apparel prices dropped by 1.3% ². These changes could indicate shifts in what consumers are spending their money on, which is crucial for planning our retail properties.

 

4. The Federal Reserve's Role: Everyone's watching the Fed ². A potential rate cut as early as March might lead to lower borrowing costs. But remember, the big picture of the economy is what really matters.

 

Key Data Points to Consider:

 

- Increase in Real Earnings: People are earning more, with real earnings up by 0.5% after adjusting for inflation ². This means consumers might have more money to spend.


- Year-over-Year Inflation Trend: The annual inflation rate in the U.S. was 3.1% for the 12 months ending in November 2023, showing a downward trend ³. This could ease the pressure on consumers' budgets.

 

Staying ahead of these economic trends is crucial for success in retail real estate. Want to explore what this means for your properties? Feel free to reach out to me Call, text, or DM for more personalized advice.

 

How do you think these economic shifts will affect your strategies for leasing, 1031 exchanging, selling, and developing properties in the near future?

 

#RetailRealEstate #EconomicTrends #MarcRetailGuy #CPIInsights #RealEstateSuccess

 

 

1. "CPI rises 0.1% month over month in November: Here's what you need to know - YouTube"

2. Consumer Price Index report, U.S. Bureau of Labor Statistics

3. U.S. inflation rate 3.1% year-over-year as of November 2023, U.S. Labor Department data

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By Marc Perlof • October 27, 2025
If you own retail real estate, here’s what might change for you. The hospitality workers’ union UNITE HERE Local 11 is pushing a bold new initiative to raise the City of Los Angeles $30 minimum wage for all city employees by July 1, 2028¹. While the first ordinance covered hotel and airport workers, the union’s latest ballot measure would extend this wage citywide². As an expert in retail real estate, here’s what that means for your properties. Higher wages will immediately impact tenant affordability and rent-to-sales ratio calculations that drive lease viability. Many retailers operate with payroll costs at 25 to 35 percent of gross revenue, leaving little cushion for a wage that’s nearly double the current state minimum of $16/hour³. When margins tighten, tenants face a choice: raise prices, cut staff, or negotiate rent. For landlords, that translates into valuation pressure because commercial property values depend on stable rental income. The small business impact in Los Angeles could be profound. Independent restaurants, boutiques, and service operators, the lifeblood of local shopping centers, run on razor-thin profits. If forced to meet a $30 wage, some may relocate to cities like Burbank or Glendale, where municipal wage laws are lower, or close entirely⁴. That shift could spark short-term vacancy spikes and longer lease-up periods. Still, there’s a possible upside. When low-wage workers earn more, they spend more locally. For well-positioned centers with necessity-based tenants: grocers, pharmacies, quick-service restaurants, rising wages could strengthen revenue resilience. Key takeaways for retail landlords: Audit tenant financial health and exposure to rising payroll costs. Review lease clauses that address operating-cost pass-throughs. Model new rent-to-sales thresholds under a $30 wage scenario. Track tenant retention and market-rent shifts across nearby cities. Prepare for valuation adjustments as cap rates reflect greater income volatility. If you own retail real estate in the City of Los Angeles, now’s the time to stress-test your portfolio. Let’s review your leases before this wage shift hits. Call or DM me for more information. When the $30 wage arrives, will higher pay strengthen LA’s consumer base or hollow out the city’s small-business retail core? #LosAngeles30MinimumWage #RetailRealEstateInLosAngeles #TenantAffordabilityAndRentToSalesRatio #SmallBusinessImpactLosAngeles #CommercialPropertyValuesLosAngeles

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