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?