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Diesel hits new highs, adding pressure to retail real estate strategies
Diesel averaged over $6 per gallon in September, up from about $3.81 per gallon when the U.S.-Iran conflict began in late February.
Diesel prices have surged, forcing retailers to reconsider how they approach U.S. brick-and-mortar real estate, Commercial Observer reports. Diesel is a transportation cost that influences the pricing of many consumer goods, and it surpassed an all-time average high of $6 per gallon in September.
The article cites U.S. Energy Information Administration data showing diesel’s average cost was around $3.81 per gallon when the U.S.-Iran conflict began in late February. Since then, businesses have had to manage continued diesel price hikes.
Commercial Observer also links the higher fuel costs to a broader strain on retail property development, noting that the sector has faced flat retail rents for years. It further points to U.S. Census Bureau data indicating construction spending rose more than 42% between August 2020 and August 2026, while retailers’ profit margins are not described as able to absorb higher rents needed for new development.