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Jerome Powell Spills: What's Next for Retail Real Estate?

Monday, May 6, 2024

By: Marc Perlof


Hey Retail Real Estate Rockstars! Today, we’re diving into the latest updates from the Federal Reserve that could really shake up our retail real estate game. Jerome Powell, who leads the Federal Reserve, had a big meeting this past Wednesday, May 1, 2024. He shared some news that might change how you think about your next moves in the retail property market.


Market Analysis and Trends

We're moving through 2024, and it’s more important than ever to stay on top of what’s happening in retail real estate. Here’s what’s going on and how it could affect you.


Consumer Confidence and Retail Growth

Even though prices are going up, people are still shopping. This is great news for retail property owners because when people feel good about spending, they shop more, and that makes retail properties like malls and shops a hot ticket.


Shifts in Retail Formats

Shopping isn't just about buying stuff anymore; people want to have fun when they shop. Places that mix shopping with fun activities, like places where you can eat, watch movies, or play games, are becoming more popular.


Economic Growth Moderation

Jerome Powell mentioned that the economy isn't growing as fast as before—it went from growing a lot at 3.4% to growing a little at 1.6%. This slowdown might make people cautious about spending, which could mean fewer shoppers.


Consumer Spending Resilience

Even with the economy slowing down a bit, people are still buying things, which shows they still have money to spend. This is especially true for stores that sell things people need every day.


Stable Interest Rates

The Federal Reserve has decided to keep interest rates the same at between 5.25% and 5.5%. This means if you're thinking about getting a loan to buy or fix up a retail property, the cost won’t go up right now, which is good news.


Interest Rates and Economic Plans

Jerome Powell said they’re not planning to increase interest rates anytime soon. They want to keep them steady to help manage how much things cost and support the job market. This means they are being very careful and watching how things go, which could help the economy stay steady.


What This Means for You

If things cost more to make and sell, this could make it harder for stores in your properties to pay their rent. However, since people are still spending money, it could mean good business for stores that are in great spots or sell must-have items.


What’s Next?

The Federal Reserve is watching everything closely, which means they might make small changes if needed to keep everything balanced. This could mean a stable or slightly better situation for making money in retail properties.


How Can This Help You?

Want to make sure your retail real estate investments are ready for these changes? I'm here to help you figure out the best moves to make based on what's going on with interest rates and the economy. Call or DM me for more information and let's make a plan to grow your investments even in these changing times!


Let’s Talk!

What do you think about all this? How are you planning to adjust your investments in retail real estate? Drop your thoughts in the comments. Let’s chat and share ideas to help each other succeed in this exciting market.



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