Yes, that’s right, with recent state of the economy it is no surprise that food prices have started to sky rocket causing concerns for the public. But how does this affect commercial real estate directly? Before anything, we must remember Florida’s continuing rising rents come from the population migration and continued demand for commercial real estate has greatly impacted retail owners bottom line. The main impact for commercial real estate will be found in most retailing restaurants who are going to be faced to raise their prices once again just to be able to mitigate the continued rising food costs. Not only this but their workers are going to feel the negative impacts that come from this when it comes to fueling up their cars due to all time high inflation and gas prices. Not to forget that food is shipped from all over, which will include the need for fuel in travel meaning restaurants will have no choice but to up their own prices also. The systemic negative effect that comes from the economic status of the world with without a doubt find its way into the commercial real estate industry and in these coming weeks we will see a serious struggle for the likes of restaurants and other import related businesses. The next 4 to 8 weeks are going to be a real challenge and might just question the financial stability of many of our favorite and beloved restaurants in the Orlando area. Especially for the smaller restaurants that rely on a steady cash flow to keep their bottom line intact. Not only will restaurants feel the pain but the retail commercial real estate market, those particularly in smaller grocery chains. The future is not looking positive for these specific sectors within the commercial real estate industry but fortunately not all companies with be as directly affected as others. Analysts are predicting a correction between costs of fuel if Biden deicides to release oil reserves but if not, we could see oil prices continue to increase as the current situation if Europe does not deescalate anytime soon.
March 28, 2022