PPI Falls 0.1%: Key 2025 Insights for Net-Lease Investors
Fed Cuts Rates: How the 0.1% PPI Drop Impacts Real Estate
Inflation showed new signs of cooling in August as the Producer Price Index (PPI) unexpectedly declined by 0.1%, marking a significant shift in pricing pressure heading into the fall. Year-over-year, wholesale prices rose 2.60%, while the Consumer Price Index (CPI) increased 2.90%, pointing to a steady but easing inflation trend.
This deceleration comes at a pivotal time for the Federal Reserve, which has spent the past four years battling persistent inflation and attempting to guide the economy toward stability. August’s lower PPI reading has now intensified the focus on Fed Chair Jerome Powell’s policy path moving forward — especially as jobless claims stand at 263,000, the highest in four years.
The Federal Reserve Responds: A 25-Basis-Point Rate Cut
As highlighted in the newsletter, the Federal Reserve announced a 25-basis-point reduction to the Federal Funds Rate on September 17, 2025. Jerome Powell delivered the update during a live press event, raising hopes of a gradual shift toward more borrower-friendly conditions.
The Fed’s new target range of 4.00%–4.25% is a meaningful step for investors, commercial borrowers, and those seeking refinancing. The move follows a volatile summer in the bond market, which included the 10-Year Treasury briefly hitting 3.99% before rebounding to 4.09% — a 10-basis-point jump following Powell’s presentation.
For shorter-term debt structures such as 5-year fixed-rate loans, the Fed’s policy shift may provide welcome relief. Lower Treasury yields and easing rate pressure can help investors improve net operating income (NOI), reduce debt service burdens, and stabilize cash flows.
Why Lower Inflation Matters for Commercial Real Estate
When inflation cools, borrowing conditions typically improve — and that’s exactly what many investors have been waiting for.
Key implications for CRE and net-lease investors include:
- Improved Financing Conditions: Lower benchmark rates reduce borrowing costs for acquisitions and refinancing.
- Better Cash-Flow Visibility: Reduced interest expense enhances debt-service coverage ratios (DSCR).
- Stronger Buyer Activity: Lower rates often reinvigorate the market, encouraging sidelined investors to reenter.
- Higher Valuations Over Time: As cap rates compress with lower interest rates, property values may strengthen.
Given these dynamics, now may be an opportune moment for investors to revisit stalled deals, evaluate refinancing scenarios, and explore new net-lease acquisition opportunities.
Featured Net-Lease Properties
The newsletter highlights several high-quality single-tenant assets currently showcased on the Marabella Finance website. These include:
Dutch Bros – Price: $3,225,000
- 15 years remaining on lease
- Cap rate: 4.65%
7-Eleven – Price: $5,500,000
- 15 years remaining
- Cap rate: 4.40%
Starbucks – Price: $5,504,587
- 10 years remaining
- Cap rate: 4.36%
Investors who are actively seeking long-term stability, corporate guarantees, and predictable income streams may find these NNN opportunities ideal under current market conditions.
For one-on-one financing guidance, President Christian S. Marabella encourages investors to call and discuss available loan programs tailored to net lease transactions.
Recently Funded Transactions
The newsletter also reports a series of successful loan closings, reflecting the strong demand for net-lease financing solutions:
| Tenant & Transaction Type | Loan Amount | Amortization | Fixed Rate | Status |
|---|---|---|---|---|
| Starbucks & AT&T Refinance Cash-In | $500,000 | 30 years | 7.25% | Funded |
| Chick-Fil-A Bridge Loan | $1,850,000 | 10 years | 6.00% | Funded |
| Starbucks Acquisition Loan | $1,495,000 | 25 years | 6.25% | Funded |
| Starbucks Cash-Out | $1,450,000 | 20 years | 6.05% | Funded |
Looking Ahead: What Investors Should Expect
With inflation easing and the Fed signaling a potential shift toward gradual rate normalization, market conditions for commercial real estate — especially net-lease — are improving.
Over the coming months, investors should watch:
- Treasury yield movements
- Inflation trendlines
- Fed communications and economic projections
- Financing spreads across banks and private lenders
Lower inflation is a promising sign, but disciplined underwriting and strategic financing remain essential.
Need Financing Guidance?
Marabella Commercial Finance continues to assist investors nationwide with NNN acquisition loans, refinance strategies, and custom financing programs.
- Office: 760-479-0800
- Cell: 760-803-6464
- Email: [email protected]
- Website: marabellafinance.com
