ARE HIGH GAS PRICES AFFECTING REAL ESTATE?
As if a sluggish economy wasn't bad enough, just when people have to tighten their belts or do without a regular paycheck, gas prices are shooting through the roof, creating a ripple effect across a number of industries, including real estate. A stunning 82% of this week's poll respondents say that the high price of gas is changing the way they do business. A mere 18% report that it's not having much of an effect. Ira Kerner, a broker with Metro Commercial Real Estate, sees the effect gas prices are having on retail. Here is what he has to say:
"We certainly see the impact on shopping centers that people might have to drive further to get to. We also expect a lot more commerce to be done through the Internet. Retailers are expecting this as well, which is why we're seeing a sense of uneasiness among retailers, because they know this is going to impact them directly.
"I don't know whether their choices relating to renting space are directly attributable to the cost of gas, but it is a factor because they do see declines in the business. Whether that has to do with the economy in general or the economy's weakness due to high gas prices is hard to say, but it's definitely being considered. Retailers are realizing that shoppers are not willing to drive a long distance to get to shopping centers or take frequent trips.
"Higher gas prices are also having an effect on prices of goods in the stores. Whether you're talking about shoes, a shirt or a carton of milk, the cost to distribute goods and services are going up considerably.
"I haven't seen an increased interest in transit hub retail developments. Not only have I not seen that, I haven't heard from the tenants I represent that they want to focus more on these transit hubs. Do I expect to? In this market, it's difficult to expect a lot, but nothing surprises me. If somebody said to me, 'I want to be closer to the train station or the bus station because it's less distance for a consumer to drive,' it wouldn't surprise me, but I wouldn't expect them to say something like that. I think at the end of the day, tenants want to go to a good shopping center where a strong anchor is a good draw."
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
