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Hi, I’m Stewart Heath, CEO of Harvard. Grace.
Hope you enjoyed a great Thanksgiving weekend and you got to spend some time with loved ones while relaxing and reflecting on what you’re thankful for. Today, I’m talking with you about inflation. Again, I’ve talked about inflation for the last couple of weeks now, and it’s a factor out there, it’s happening.
Really for the first time in a long, where it’s really significant impacting almost every person, if you were involved in preparing for a Thanksgiving meal, then you saw it hit food prices and probably some energy prices. This post is about what inflation is going to hit next that you might not be thinking about.
I want to tell you I believe it’s going to hit a real estate price; a rental real estate next cause inflation will hit every item that a real estate operators’ expense schedule is. They will be behind the curve, so to speak. As they’re writing new leases, you can expect those CPI increases built into some leases or just anniversary rent escalators to be on the rise. Maybe in 2022 the inflation factor will settle back down, but we’re looking at a 6% for Q3. So, it has to settle down quite a bit.
Most leases had been tied to CPI and they’ve been going up, but the next anniversary of those leases, there’s going to be some pretty significant rent increases. Other shorter three to five-year leases, where you might have an annual rent escalator of two or two and a half percent. Those are going to be going up to three or three and a half. You should expect to see that. I’ve linked a couple really great articles. I encourage you to check those out. Tell me if you think I’m wrong, tell me what you think inflation is going to hit next in, in your business. Let me hear from you and thanks for stopping by! Until next time!
Resources: https://www.wsj.com/articles/economy-week-ahead-factories-inflation-jobs-11638129600
