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Stay Ahead! What Jerome Powell's Updates Mean for Your Retail Property Investments

Tuesday, June 18, 2024

By: Marc Perlof

(310) 774-3721

 

 

Hey, Retail Real Estate Rockstars! Last Wednesday, some important news came out that might affect your retail properties. Let's break it down!

 

Interest Rates Stay the Same

 

The Federal Reserve decided to keep interest rates steady at 5.25% to 5.5%. This is good news for you because it means the cost of loans won’t go up suddenly. Whether you’re buying, selling, or refinancing your retail property, you can count on stable loan costs.

 

Inflation: A Wild Ride

 

Inflation has been up and down lately. The good news is that it has dropped from 7% to 3.3% as of May 2024. While it's not at the Fed's target of 2% yet, it's improving. Lower inflation helps people keep their spending power, which is great for retail stores. When people feel confident, they spend more, which means more customers for our stores. A survey showed that consumer spending went up by 3.8% in the first quarter of 2024.

 

Economic Growth: Slow but Steady

 

The economy is growing slowly but surely. The GDP grew by 1.3% in the first quarter of this year. Even though this is slower than before, it shows that the economy is strong. When the economy is stable, we see fewer empty stores and a better environment for our tenants. A strong economy supports a healthy retail real estate market.

 

Labor Market: Strong and Balanced

 

Jobs are looking good too. On average, 272,000 new jobs were added each month up to May 2024, and the unemployment rate is low at 4%. This means more people have money to spend, which is great for our stores. Steady job growth also means people are earning more, which supports their ability to spend.

 

Retail real estate owners, now is the time to use this information to make smart investment choices. Understanding these trends can help you improve your properties and attract great buyers and tenants. Don’t wait for the market to change; be the one to change it! Call or DM me today to learn how to get your properties ready for the changing economy.

 

Are you ready to adjust your retail real estate investments in a market with high inflation and delayed interest rate cuts?

 

 

Footnotes:

 

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