While it's not exactly chaos theory that a butterfly flapping its wings in Brazil will cause a tsunami in Japan, changes in the market in one region can have a significant and unexpected impact on real estate.
In short, the growing popularity of weight loss drugs such as Ozempic, Wegovy, and Mounjaro (known as GPL-1) is expected to influence consumer behavior and, subsequently, trends in commercial real estate. CoStar reported.
Anton Pill, global head of alternatives at JPMorgan Asset Management, said the surge in weight loss drug users, which could reach 50 million to 100 million people in the U.S., could have a ripple effect on the real estate market. I predict that there will be.
At a recent market forecast event, Pill highlighted the potential impact of changing consumer behavior, saying GLP-1 users in the US will increase by 300 percent by the end of 2022.
Although the long-term and widespread effects are uncertain, the spending patterns of GLP-1 users are already changing, as shown by anonymous data from 95 million JPMorgan Chase Bank customers.
Pill outlined four potential ways these spending patterns can influence real estate decisions.
- Fast food sales decline: Users of weight loss drugs may reduce their fast food spending by about 85 percent, raising questions about how fast food restaurants will adapt their offerings and real estate Area may be affected.
- Reduced alcohol sales: Individuals taking these drugs can reduce their alcohol consumption by 60-70%, impacting liquor retailers.
- Changes in snack and soda preferences: Spending on snacks could drop by 80% and soda consumption by 70%, potentially leading to increased spending at alternative outlets such as juice bars.
- Increased demand for fitness and apparel spaces: Gyms, spa and beauty retailers, apparel stores as consumers seek to support their new lifestyles with the transition to a healthier lifestyle after using GLP-1 The demand for such space is likely to increase.
Pill said seemingly small consumer decisions, such as purchasing habits, can have a big impact on real estate investors.
— Ted Glanser
