Why Inflation Remains a Key Tenant Concern

Recent inflation data offers encouraging signs for both consumers and commercial real estate investors. While inflation remains above the Federal Reserve's long-term target, price growth has slowed, with core inflation remaining relatively contained despite ongoing volatility in energy markets. This suggests the most disruptive phase of inflation may be behind us, providing greater stability for businesses and tenants alike.

Energy prices continue to be the primary source of inflationary pressure, but strong U.S. crude oil exports and strategic reserves have helped cushion global supply disruptions. If oil prices remain stable, inflation could continue moderating in the months ahead, reducing pressure on both businesses and household budgets.

Not all sectors are experiencing the same impact. Retailers that rely on consumer goods may benefit from softer goods inflation, while restaurants could continue facing higher food input costs. Regional differences also remain significant, with inflation running higher in the Northeast and Midwest than in the South and West, where stronger apartment construction has helped moderate rent growth.

What This Means for Investors

Although inflation has not fully subsided, the latest data points to a more stable operating environment for commercial real estate. Slower price growth and a more predictable interest-rate outlook could improve investor confidence, while property performance will continue to vary by asset type, tenant mix, and local market conditions.

Source: Marcus & Millichap Research Brief – Inflation, June 2026.