Star News

Consumers are experiencing much-needed relief from last year's steep increases in food staples. Prices are dropping on certain key items as retailers slash prices to better compete, and food manufacturers offer promotions to pass along savings realized from raw materials and gasoline costs. This is welcome relief for American consumers looking to save money as they continue to cope with stagnant incomes, job loss, and economic uncertainty. Prices have been cut on dairy, meats, fruits, vegetables, and bread.

In July, a Labor Department price index for foods to be sold and consumed domestically fell for the seventh time in eight months. The index, a single component of the collective Consumer Price Index, fell 0.5% in July and was down 0.9% throughout the course of the prior 12 months. Overall food prices, representing foods sold both to restaurants and direct to consumers, have not risen on a monthly basis since November 2008 though such stability does not make up for the surge in food prices throughout most of ‘08, when costs of items such as wheat and corn soared to record highs.

At the conclusion of 2008, the CPI food-at-home index rose 6.7%, thus the less than 1% drop to date in 2009 does little to curb the impact of significant increases the prior year. Consumers’ efforts to save money are pressuring retailers and manufacturers to cut every day prices and boost promotions throughout their stores. Climate, overall product demand, oil prices, and market competition all play a role in these figures. Each food category boasts it own unique economics of supply and demand. Falling gasoline prices combined with consumer resistance to price increases have been instrumental in driving this latest downward pricing trend. We will keep you posted…

90% Loan to Purchase on Walgreen Acquisition

Penstar recently obtained a loan quote for the acquisition of a Kansas single tenant Walgreen's. The borrower was seeking a high leverage loan at a competitive fixed rate of interest. The lender provided a $4,150,000 non-recourse loan to 90% loan to purchase, with a fixed interest rate of 6.8% for 25 years, and with a 25-year amortization. For more information, please contact Steven Hamermesh at (818) 883-9609 or Hamer@PenstarAdvisors.com..

Helpful Humor

The best antidote for those challenging transactions is to take a moment to have a hearty laugh. Helpful humor is our way of infusing laughter into your work-week

“Rye Bread”

Early one morning, two men in their 60's were resting on their usual bench at the local park.

The elder gentleman had just finished his morning jog and wasn't even short of breath.

The younger man was amazed at his friend's stamina and asked him what he did to have so much energy. The elder responded, saying, “Well, I eat rye bread every day. It keeps your energy level high and you'll have great stamina with the ladies.”

With that, the younger man stopped by the bakery on his way home. As he was looking around, a woman behind the case offered her assistance. “Do you have any rye bread?” He asked. “Yes,” she replied, pointing, “There's a rack filled with rye freshly baked this morning.”

He paused for a moment and pulled 5 large loaves from the rack. As she completed the sale, the woman said, “This is a large purchase; by the time you get to the last loaf, it will be hard.”

“I can't believe it,” the old man said aloud, “everybody knows about this stuff but me!”