Economic Recovery Underway – Some Headwinds Persist
- May retail sales are slightly down from April, but 18% above pre-pandemic levels; Core retail sales up 16%
- As more states reopen, signs point to a summer boost
- Labor shortages forcing restaurants, Hotels and Retailers to operate understaffed; driving wage & inflation pressure
Current Market Conditions Bolstering CRE Investor Demand
- Real estate’s rents and value tend to keep pace with rising costs, making it a good hedge against inflation
- High liquidity and low interest rates further fuel investor demand, particularly for Apt, Industrial and Self-Storage
- This lifts prices and puts downward pressure on cap rates
Sellers Can Ride Major Tailwinds, For Now
- Investors who sell will benefit from the wave of buyers and capital flooding into the sector
- Prime opportunity to take chips off the table, do a sale-lease back, or reposition to new market or property type
- However, the eventual market recalibration and potential rise in interest rates could limit this window of opportunity
*Core retail sales exclude auto and gasoline sales
Sources: Marcus & Millichap Research Services, U.S. Census Bureau