Guest: Karly Iacono
Topics: inflation, retail trends

Transcript:

Chris Ressa 0:00
This is retail retold the story of how that store ended up in your neighborhood. I’m your host, Chris ReSSA. And I invite you to join my conversation with some of the retail industry’s biggest influencers. This podcast is brought to you by DLC management, everyone.

Today’s episode is a little bit different. Today’s episode is a recording of what’s in store. What’s in store is a show where myself and Carly Iacono unpack the latest news on the intersection of retail and real estate. The show typically airs once a month on LinkedIn live. I’m excited to share it with you today. Listen in as we discuss the impact of inflation on retail real estate. I hope you enjoy this special episode of resale retold next.

Hi Karly.

Karly Iacono 0:53
Good morning, Chris. Good morning everybody who’s watching live. This is what’s in store with Carly and Chris. I’m currently Iacono Senior Vice President at CBRE.

Ressa 1:06
I’m Chris ReSSA, Chief Operating Officer at DLC management.

Iacono 1:10
And we are here for our monthly series What’s in store which covers all topics at the intersection of retail and real estate. We have a really pressing topic today that we’re going to be covering it’s on the forefront of everyone’s mind is inflation, and real estate or inflation and everything I feel like in life but obviously Chris and I are not economists, but I think we’ll have some good insight on our age predictions on inflation, how will impact retail real estate and then also how we think it may affect consumer behavior and retailers themselves. If you are watching us live on LinkedIn, feel free to type in your comments questions, we’ll get to as many as we can. If you’re watching the replay and have any follow up questions, feel free to reach out to either of us after the broadcast. All right, let’s jump in Good to see you can’t believe it’s been another month. Time is flying. Time is

Ressa 2:09
flying. It is wild. It’s wild. What do you been up to lately?

Iacono 2:14
Seems to accelerate accelerate. Well, I’m selling a house and buying a house and wanting a bunch of new deals and just trying to do everything all at once.

Ressa 2:22
So oh my god lock in that interest rate.

Iacono 2:26
I did yesterday, actually. But I had the rate lock from the day before so it could have been better but it could have been worse. So you know, just forging ahead. How

Ressa 2:37
about you? A lot. Getting ready for spring, like kids activities and whatnot. We did my son’s in boxing lessons, which is three years old, which is fascinating. And got a vacation planned in late April. So that’s exciting. Like I don’t know if you’ve ever been but you’re looking for a little r&r. My wife and I we’ve we hate going to the same place. So we have we’ve been like so many different places. But this we’re doing a repeat because we love the place so much Captiva Island. Are you familiar?

Iacono 3:23
I have been so my grandparents used to have a condo in Sanibel right next to Captiva. Oh, beautiful down there.

Ressa 3:31
Yeah. So we rented the same house that we had last year in Captiva. So that’s looking forward to that. So

Iacono 3:39
amazing. Glad you’re getting away. Yes. Great. Great. All right. So to be mindful of everyone’s time we will jump into our topic is going to be two parts. So let’s start Chris with how we think inflation may impact this booming real estate market. Now we know rates went up finally right we’ve been saying this for how many years now that we think they’re gonna go up so yesterday was the day if you’re watching this in the future interest rates went up yesterday. It’s official. So we both come at the business a little differently, right you’re on the ownership side I’m on the the transaction brokerage side. What’s your sense of how this is going to impact the real estate market and there’s a lot we’ll dive into on this.

Ressa 4:27
So I think that I mean, there’s so many things I think the first thing people have been preparing for this rate hike I think the Fed really tells their hand it’s not like I think how it used to be where it was like a surprise, right this is this is been the foreshadowed for a while so that’s the that’s the first thing. So when you look at some of the markets, you could argue it’s priced in already because people We’re expecting this I think, I think to me from a buying and selling, and this is so non economic, but it feels the 25 the bips that raised yesterday. I think that that’s that’s one thing. And I don’t think that’s what’s really on investors minds, I think what’s on investors minds is how many hikes and what, at how big of jumps throughout the year? What does it look like 12 months from now? I think that’s really what’s happening because they’re already talking about in in May. Could this be a a 50 Pip hike? Now we’re moving, right, you’re talking about moving at a point over, you know, a multi month period. And I think that could start to impact the market more, it still feels like today, and we’re only literally one day in from a rate hike. Yes, we’re expert planners, we plan this around the Fed meeting.

Iacono 6:11
We just got really lucky. Anyone listening. We planned the topic weeks ago.

Ressa 6:17
So I think that your your good morning, someone said good morning in the cars. I think that you’re going to see a little bit more reaction to the market. A little bit later in the year right now. People are still trying to buy there’s the excess cash in the market. And the savings to me is outweighing this. And then the the psyche of commercial real estate being a inflation hedge is still in people’s minds. So and whether that’s I think, whether that’s true or false, I believe it to be true. But there’s an argument to be made, right? If it’s if it’s inflation based on your economic growth, then yes, if it’s inflation based on the supply side economics, then then potentially it’s not necessarily a hedge. So I think it’s a

Iacono 7:21
really unique time because we have such a confluence of competing factors, right, we have the supply demand imbalance that you just mentioned. And I see this every day, we still have so many buyers looking for deals in the market, it’s definitely still a seller’s market. And it’s because of a few reasons. One, we have new buyers coming into the market who are looking for that inflation hedge, we’re looking for a tangible asset, who are coming maybe out of the stock market, because they’re worried about the volatility moving forward with new clients coming into commercial real estate. And they’re looking for stability, and long term leases and long term investment property. Couple that with the limited, especially single tenant demand and demand, excuse me, development that we’ve had over the last three years due to COVID due to retailers changing their strategy, and this is not across the board. Obviously, there’s retailers expanding like wildfire. But we definitely had a pullback, a new deliverables for construction. In the single tenant world. We have less long term leases, but yet we have more demand. So that’s really putting an interesting push on cap rates for long term, especially long term credit tenants.

Ressa 8:41
I think I think that’s a part that’s hard. That’s niche to our industry. That’s hard to pull from general economic data, which is the supply constraint, lack of new construction in retail real estate across the board, lack of vacancy, driving rents, and driving pricing on sales. So I you know, how does rising rates impact that is going to be interesting, because it seems that force is so strong. The lack of supply with the demand to open stores and new businesses is so strong. I think is is interesting. So we got we got a we got a bunch of comments here, Carly. So do you mind if we take a because I think there’s questions here. I’ll let you answer one which is from Francisco which says, Good morning. Why don’t people want to sell?

Iacono 9:51
The thing I hear most often is they don’t know what they’re gonna buy. So 80% I am just pulling a number out but it’s roughly 80 Plus One of our clients do 1031 exchanges when they sell, rarely do we have people sell cash out and exit the real estate market, the number might even be higher. So if you’re in that position, and you sell, you’re now a buyer. And if you don’t know what to buy, you get into this sort of frozen mentality of okay, no, I want to sell this is great pricing. I want to transition my business plan, but how do I make the next piece work in this market? And that’s really where we come in to help facilitate, but that’s been the challenge. That’s making a lot of people pause and say, Well, I want to sell but

Ressa 10:34
then what? Yeah, I think that’s really true. Especially, I think that’s exacerbated in an inflationary time. Because if you leave the cache in too long, it’s just eroding away. So inflation is eating you alive, I think that is really problematic. I would also add that in right now, people want to maximize pricing, right? When you’re seeing what it is right? Like, in in, in times that are great, right? Nobody wants to be the one who sold for deal everyone wants to sell at max pricing. So the reality is, that’s what’s being sold right now, you’re, you know, there’s not so many steals out there, you have to have conviction around the real estate, otherwise, they’re gonna, they’re gonna, they’re gonna hold on right now, it’s hard to sell at a, at a discount in this market.

Iacono 11:46
I have seemed to comment on that a bit of pricing adjustment happening, though it is starting because there’s this point when you hit negative leverage, right? If you are selling a deal, and it’s a 4% return and interest rates are 4%, like that, that doesn’t work from a financing perspective, right, you’re gonna have negative leverage. So there is an inflection point out to smaller deals, they’re still cash buyers. But as people are looking at this imbalance, they’re saying there should be some sort of spread here. So I think we are starting to get pushback on certain types of deals and very aggressive cap rates, and there’s a bit of price discovery going on, seller still want peek at the market. And if they should have sold six months ago and didn’t, now they’re frustrated, and they’re holding out for prices that they probably won’t get because the rates are changing. And buyers are saying we know what’s happening in the next year, theoretically, we think prices are going to come down cap rates are gonna go up, we’ll just wait a little bit. So there’s this, this push and pull, which is always the case, right in any transaction of the two sides wanting having different objectives and different agendas. But I think it’s becoming a little more poignant as we hit that inflection point with the interest rates.

Ressa 13:02
Totally. So Francisco has another question. I think this one’s for you. So how do you answer the I don’t know what to buy? Question.

Iacono 13:10
really individualized question. And I actually love these conversations, because it’s strategy. This is one of my favorite parts of my job is looking and getting to know a client and helping them figure out why they would sell why are they really even looking at this, and then that impacts what they would buy. And that’s why the market is so dynamic because there are so many different types of buyers with different needs in their investment portfolio. Some there are buyers for 25 years, CVS is at a four to five cap rates, tons of them, right, that’s long term stability, you know, what you’re getting, it is set in that to some people is the absolute gold standard. There are buyers for multi tenant retail with vacancy and upside and short term leases and maybe a slightly higher cap rate, very different assets. The what you should buy really depends on how you want to spend your time managing or not what your risk tolerance is, what your price point is, and where you want to be in 710 years what your exit strategy is. So I love that question, but you can’t answer it without understanding who’s asking it better.

Ressa 14:22
Yeah, I think that was well said and I’ll save. I’ll leave that one to you. I think you hit the nail on the head. The you know, we talked a lot about we’ve talked a lot about the interest rates and what is what buyers are doing. You mentioned though, that you’re seeing a pricing adjustment because of negative leverage. Can you expand further on that are people are price or cap rates stabilizing? Are they still compressing?

Iacono 14:58
I think they’re stabilizing and And, again, it’s really hard to do a blanket statement because it’s somewhat asset specific, at least industrial think they’re stabilizing. I mean, that is a different animal, right? So I don’t want anyone listening to this, to interpret that we’re saying, oh, office and all these other asset classes, right, everything is so unique because of the underlying fundamentals. But I think if we’re sticking with retail, multi tenant retail, Net Lease retail, I really do feel that we’re at a point where Cap rates have stabilized, I don’t know how much more compression we have with rates going up. We do have the the approvals and the development markets opening back up. So we are getting projects done. There’s still not enough tenants expanding, but some of those that were delayed during COVID are coming online. Seven elevens expanding like crazy. That’s a great example. Right? So we have a bunch of those coming to market, which is meeting not just us, obviously, but meeting the demand of investors looking for that type of product. So I think we’re we’re at a point where this is pretty peak pricing for most at least retail.

Ressa 16:08
Any, are anything from a 1031 perspective, anything unique happening? Because of 1031? We kind of we’ve gotten through the closed by year end stuff or is anything? You know, we’ve gotten through tax reform, anything else unique with 1031 right now? Thank goodness. No,

Iacono 16:34
I don’t I have heard no other proposals. And of course, it’s a weird time, anything to change any day, I feel like but there’s nothing being actively talked about in regards to changing the 1031 law right now that I’ve seen. So I think we are in a great period where we have clarity on the 1031 exchange ID rules, the timeframes. It’s not limited by your gain, which was something they were talking about last year, there no limitation, the same process, lifetime for lifetime, any dollar value. You have to replace the dead. There’s you know all there’s a lot to it. But it seems to be pretty set right now.

Ressa 17:19
On? Yeah. On the rent side, I’m curious in some of the new leases you’re seeing, we are definitely starting to see because of CPI, more rent escalations and leases. Yeah, I’m seeing as that translate in your world? Absolutely.

Iacono 17:39
We’re seeing more developers push for higher rent escalations, expects them. And on the investor side. Again, there’s different buyer profiles for different types of deals, but everyone kind of has inflation in the back of their mind. So I do, we don’t see a ton of CPI increases, there’s very few tenants that will agree to them, especially in this market. But the fixed increases are certainly a focus.

Ressa 18:07
Yeah, it certainly seems the Fed is going to do whatever it takes to keep inflation under control, we’re going to have rising rates, quantitative tightening, this should, you know, damping inflation a bit, especially if inflation, which I believe started as a supply chain issue. Not necessarily a money supply issue. So I think that is going to be a an interesting thing of how long of a period we have this significant inflation, because, you know, the Fed has been pretty clear that they’re going to try to put a damper on it. What I what I think is interesting, more of an economic discussion is right now the fret Feds target is 2%. Inflation. They want that’s what they try to target and and should that be the target, as is 3%. Okay. And I think that’ll be interesting to see

Iacono 19:16
what we add seven, seven and a half percent Oh, nine now. Okay. So two seems.

Ressa 19:24
So I think that’s what’s concerning investors, right, because rates move significantly, because it’s four times the Feds target right now. Yeah, that’s very material. Yeah.

Iacono 19:38
What are you seeing from your tenants? In terms of you? We’ve talked about rental escalation, but what about base rents? Have you seen any shifts in the last 12 months in the rent that new tenants are

Ressa 19:52
offering? The answer is yes, because demand, demand is high. and construction costs are high. So rents definitely been pushed. It’s always asset and market dependent. But in general, rents are moving and you can look at the lease spreads that public REITs produce rents are moving considerably.

Iacono 20:21
Do you have any concern from a fund that real estate fundamental perspective on the sustainability of the increased rents for these tenants?

Ressa 20:31
I don’t because I’m, I’m very bullish on physical retail, I think that the inflation, especially some certain commodity prices, is going to force the consumer and already seeing to the store. I’ve said this before, right shipping is, is a big challenge, right. And as oil right rises, this this compounds, the problem for E commerce, that is, makes physical retail uniquely positioned to win. I also think in my portfolio, and a lot of the retail you’re working with, is a value consumer, whether that’s, you know, most majority of open air retail in America is positioned around value, whether that’s TJ Maxx and Ulta and Five Below and Dick’s Sporting Goods. I think, in inflationary times, people are looking for value. You know, the CEO of Burlington said that in inflationary times consumers trade down, and so they feel good about their positioning in inflationary times. So I think that is that positions a lot of open air retail, really, in a really strong spot. So I think all consumers trade down know, the super high end, maybe they buy less, maybe it’s, you know, 5% isn’t, you know, or 8%, and nothing burger to them. But I think, you know, value retailers really benefit during from people trading down.

Iacono 22:26
So let’s pause right there. Because we did a poll this week, connected to this show about consumer behavior. So I’d like to share the poll results from LinkedIn. So the question was, have your shopping habits changed due to inflation directly related to what you were just sharing your thoughts on? Now, one of the comments we got, which I think is very true, was this is probably not a widely representative pool of people answering, right? We’re all employed likely, right. And LinkedIn, this is not just broad America wide cross section. So keep that in mind. But from the respondents we had were, which were about 130. We had 10% say that they were driving less, because of the gas prices. We had 8% say that they were trading down and we phrased the question, are you eating less state and more burgers? So 8% of the respondents said yes, which is exactly what you’re saying they’re trading down and their consumption. 18% said all the above. So they are making widespread changes to their shopping habits. That’s right. And again, this is LinkedIn. And then 64% said, No, my habits, my habits have not

Ressa 23:52
changed. Well, one is interesting. Less more, more burgers, less steak, less driving. Yeah, that’s less topping

Iacono 24:03
all of it. Right. It’s already starting to impact behavior. And I think what’s what’s really interesting to me is we’re just at the beginning of it, I know you’re optimistic that they’re going to rein in inflation. Quickly, I may be less optimistic that that’s going to be the case. So I feel like we’re at the beginning of this time. So if 18% of people are already changing behavior, where will that put us in six months?

Ressa 24:29
Yeah. Let me think about the reason. I believe that inflation will be reined in a little sooner than maybe most is because the alternative to me seems a little daunting, which means rates are gonna get really high. Because the I don’t think the Feds going to stop until they rein it in. And that to me, is Is means they need to rein it in, because they’re going to keep going. Right? We keep talking about rate hikes for the next 12 months and what those look like, but we’re in a similar inflationary period. You know, I don’t know if the Fed is going to change course. So quickly, in 2023.

Iacono 25:24
Through Yeah, so they’re gonna want to let this run rampant. So we talked about consumer behavior, we had our our sample, right. What do you think, broader picture? We’re not just talking about our crew on LinkedIn. When you say the consumer is trading down, what, which is an interesting point in inflationary time, What brands do you think or what retailers do you think will actually benefit and increase sales because of that shift in consumer behavior?

Ressa 25:54
So let’s, I just want to unpack that real quick. So one, consumers have trillions in excess savings, more cash than they ever had, to, consumers are making more money under can get a job if they don’t have one and are employed. So these are good signs for consumer spending. And what I think is going to happen, I don’t think they’re not going to spend what I think is they’re going to make sure that they’re spending on things where they can get a value. And you know, I’ve done a lot of homework. I’ve done a lot of homework on like, in, you know, if you look at like, even in the Great Depression, you can look at the Great Depression, what were the top products that people bought? One of them was cosmetics. It’s in the top 10. You wouldn’t guess that? Yeah, no, that’s categories that did fantastic. And that’s because people want to feel good. Even in tough times, people still want to feel good. So I think that when you just mentioned brands, I think that brands that it’s there’s a clear value proposition in the product will win. And, and sales will go so whether that’s Walmart target on the big departments or not department store, but discount, general merchant stores, whether that’s TJ Burlington Ross, on the apparel side, Ulta. On the cosmetic side, Five Below in the tween side, I think that there’s a significant amount of retailers that provide a value proposition and have a store footprint to enable them to not have to lose money by shipping or charge the shipping to the consumer, which they can’t afford to pay for.

Iacono 27:59
So that ties into something you touched on earlier. But I want to revisit that. I believe I don’t want to say this wrong. It was your comment, but I believe you were indicating that inflation will directly benefit physical retail, because of the higher costs of shipping delivery, everything connected to online. We both been very bullish on physical retail. We still are. So why don’t you revisit why inflation specifically it will be such a win for physical

Ressa 28:29
stores. Yeah, so if you look at there was just an article put out about the DTC, which is one sector of E commerce direct to consumer and the challenge they’re having getting to profitability. And a lot of it is on customer acquisition cost. After you get through that, then, you know, you have the shipping cost and shipping costs are going to rise. And it’s who bears that burden. And it’s already hard to make a product by giving away free shipping. Now that rising costs are happening. You’re going to see that cost, you know of convenience, be high to majority of Americans, and I believe for many unaffordable and therefore, it will be cheaper to go to the store significantly if inflation continues to take hold and even if inflation settles, but oil prices don’t, which is quite possible given the war in Ukraine. I think that’s going to be a big tailwind for physical retail and the need for physical stores.

Iacono 29:55
And this plays into something we were talking about one of our last episodes that we both feel more online stores will close than in person. And I think that makes complete sense that you would continue to see consolidation of online retailers because of the shipping costs because at the expense of just getting the goods to consumers. So either the stores will close and move to a physical retail format, or they’re going to transition to one of the behemoth platforms that can benefit from the scale, Amazon, Etsy eBay,

Ressa 30:32
or or have, you know, I’m a believer in omni channel or have both right, ecommerce and physical stores, I think. You know, when we mentioned the online stores, the other thing that’s continued to be magnified, that, you know, etail insights just put out their report where 70% of all ecommerce sales were done by 12 companies 70.9. There’s 2.5 million online stores 12 of them have 71% of the market share. So a lot of those stores are not going to be able to break through to profitability unless they can gobble up more share. And it seems like it’s going to be hard to take share from Amazon, Walmart, Target Wayfair and these brands. And there’s, you know, and there’s a that’s the one way the other way is the DTC model, right. You mentioned going on marketplaces. The other way is the DTC model, we’re seeing Nike really push their DTC. They want you to go to their store, they want you to go to their website. We’re seeing other brands do that as well. We have a good Thomas Costello Ultra mentioned, the shipping which, and he said the returns are a big issue. Yeah, so the reverse logistics are a big challenge. There’s the cost for potentially the consumer, but also what the retailer has to do with the returns. But I will say that, on that front, I don’t know if it will make it in time. But at least in the in and when I say in time, I mean in time to make an impact in the short term. In the long term. The answer to this returns issue seems to be augmented reality and you know, in this and virtual reality, that seems to be a but really AR that seems to be the answer. Whether it’s the you know, I can I make it i They make me an avatar of my exact body type on online, and then I can see exactly what fits on it and how it looks and it’s my exact body type, right? AR does that happen in the next 12 months while inflation and commodity prices are rising? seems doubtful, but long term returns challenges seem to be the answer that people are coming to write. Everyone has business model plans on returns. That’s one solution, which is can we make returns like a more affordable business model. The other that’s really gaining traction is can we just stop returns by augmented reality and there’s some that are much harder but they’re definitely you know, Rian is new store has there was a whole thing on Rian his new store if you saw it on their augmented reality partnership and how they’re combat combat combating returns I don’t know if you saw that

Iacono 33:59
I didn’t put that’s really interesting I hadn’t contemplated

Ressa 34:04
savage X Fenty is her new story think she’s she just opened her first one. I don’t know if that’s how you say that’s how it reads savage. There’s probably some younger generations listening going out there talking about that’s a that’s a that’s really honest, your store and it’s clearly they’ve got you go in and they take these photos of you and now you have an avatar of yourself that can help with, you know, getting the right size, making sure the color looks good on you. Do you like that? Do you like that style and fit on you and whatnot. So we’ll say

Iacono 34:52
What a neat concept. Do you know what other categories have the highest percentage of returns? I’m under Before I missed that you probably don’t have the data in front of you.

Ressa 35:02
Aside from cabbage by Fenty. So the X is by.

Iacono 35:06
Okay. Thank you. So, if that’s an answer to apparel, what’s behind that? Right? Like, how else can we solve for returns with AR if it’s not just

Ressa 35:19
I think the hardest, the hardest one apparel? The one of the hardest ones is cosmetics. Right? That lipstick on the computer, depending on the lighting on the computer, and that’s really challenging. Okay, right, if you know the brand, and you know the color and the shade, and all that it makes it easy. But if you want to try a new product, it’s it’s pretty challenging now. I’m not personally a big lipstick purchaser. But so I don’t have this issue. I know that’s a big one cosmetics, okay.

Iacono 35:59
Sporting Goods or anything that would be specialized to would be be an issue. What other categories

Ressa 36:06
custom custom and personalization is? Oh, it’s

Iacono 36:11
more variety of items. You might just not like that particular, whatever. Wait a bit.

Ressa 36:16
We had another comment that said driverless cars will change retail real estate more than AR VR.

Iacono 36:22
Okay, that’s different from inflation. But I like it. Let’s go with it.

Ressa 36:28
I think that I’m driverless cars i My take is so on retail real estate short on Unreal tale. I think AR and VR is going to have a significant impact on the retail and retail real estate. It certainly will, I think there’s a lot of things. One, the first thing that comes to mind is the X Serbs and suburban real estate start to be become, you know, a continued boon because of the the easier commute, right, you don’t have to be so close in. That’s one I think, you know, obviously parking ratios and everything like and the light start to become less problematic. How you get, you know, the could the front of the shopping center start to look like the line at the airport, and how the center’s design starts to really be impactful. Because, you know, there’s that if it’s your car, then then it’s going to park in a spot just like everybody every other car, so doesn’t have to be just looking like an airport. So I think it’ll play an impact. I think it will probably increase traffic to physical real estate because, you know, if you’re one of those people who just don’t feel like driving, you don’t have to drive. Right, right.

Iacono 38:03
I hope we are closer to that than farther away. Until you I had a Tesla for quite a few years. And I used to write emails all the time I put in auto drive and write emails, wherever I was going to work to appointment and just got very comfortable with the auto drive. I no longer have it it’ll be getting another one but in this time, I’m like almost lost time all the commuting, going to building like I’m not as productive because I actually have to drive so I could see that becoming when we get comfortable with the technology piece of it and the safety and the price point becomes a little more reasonable which it is. I could see that being widely adopted although people say they love to drive. Great but once you get into that not having to I really think it would be a game changer. And then to your point though the car will go park itself doesn’t you don’t have to be right next to the front door.

Ressa 39:00
You need speechify me to die. Okay,

Iacono 39:03
you have another answer another tech answer. Okay, good.

Ressa 39:06
You need speechify it’s it you can it’s like 100 something bucks a year you need speechify it it reads your emails for you if you’re on a website and you’re looking at an article so if you’re on your way to work and you’re driving and you want to look for articles you want to read but you can’t read them because you’re not bothered driving a Tesla speech or file just read the articles for you.

Iacono 39:26
Okay, that I need to get another test I just need

Ressa 39:30
this is how much money make you money.

Iacono 39:35
Really appreciate that today it’s been very worthwhile.

Ressa 39:39
speechify the Okay. Where we’re running toward 840 What anything else you’re thinking as it relates to inflation or interest rates and on retail and on retail real estate that we haven’t covered?

Iacono 39:59
I think we covered the big ones, this is going to be an ongoing conversation. It’s a really interesting time in the market. I think we we have so many competing factors that it’s relevant to revisit this. Yeah, like every day, but probably, you know, every month or two to just kind of see where rents are going which drives valuations where Cap rates are, which drives valuations, right, rents are going up, cap rates are going up, like where does that leave us at the end? So it’s think it’s something that we have to keep revisiting as the market adapts. Totally agree.

Ressa 40:34
All right. Thanks for your comments, everyone. A lot of comments, really appreciate him.

Iacono 40:40
So that everyone could join us, Chris. always wonderful to see you. Thanks for the good conversation and everyone else. Join us next month for what’s in store. Take care.

Ressa 40:53
Thank you for listening to retail retold. If you want to share a story about a retail real estate deal that you were a part of on our show. Please reach out to us at retail retold at DLC mgmt.com This show highlights the stories behind the deals from all perspectives. So it doesn’t matter if you are a retailer, broker, entrepreneur, architect or an attorney. Also, don’t forget to subscribe to retail retold so you don’t miss out on next Thursday’s episode. I’m excited to announce on Sunday Night March 6 at 7:30pm. I will host a live asked me anything virtual event. I’m going to talk about all things commercial real estate and retail. Check out retail retail.com/ama For more details on how to sign up for the event. And submit your questions today. Join me on Sunday March 6 at 7:30pm. Eastern Standard Time. Sign up today at retail retail.com/ama for more information. Hope to see you there