Thought Leadership

Retail Real Estate Q4 2013: Discussion with Peter Linneman

An Economic Discussion on Retail Real Estate

Trademark|December 5, 2013

Written by: Terry Montesi, CEO & Tommy Miller, President of Trademark

Montesi: Let’s start with what is going on with retail sales? 

Linneman: You take retail sales and you back out auto and you back out gasoline. You do the same thing, right? And in real terms, it’s at a new all-time high slightly. Just barely at an all-time high. It’s higher than 2008 but only by a percent or so, net of CPI. 

Miller: That’s real, not nominal? 

Linneman: Yes. Nominal would be 9% above, something like that. But most of it is just inflation that occurred. When I say inflation, I’m just meaning CPI. I’m not doing anything cute. And again, it says that we’re down. We’re roughly 1.5% higher than the previous peak. But we’re 4.5-5 years later, almost 5 years later, and we’ve had about 4% population growth. Remember, I told you GDP is back to essentially the same on a per capita basis? “Store sales” are not back on a per capita basis. They’re up 1.5%, and you’ve had the population grow about 4.25%. So you’re down about 3%, and you say well how did that happen? 

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