TAG Industrial Watch: May 14, 2022

As inflation gets more comfortable throughout the economy, commercial real estate’s reputation as an inflation hedge will be put to the test. While markets such as multi-family, self-storage, and lodging are usually the best performers in an inflationary environment (Globe St.), industrial assets can also stay ahead of the cost of living if structured properly. Historically, single-tenant properties with 10-year leases represented the gold standard in the industrial market. However, today’s industrial investors concerned about long-term inflationary risks should seek multi-tenant assets with varying short-term leases. Preferably, future rent escalations should also be tied to the consumer price index or even the tenant’s sales growth. Nonetheless, escalations should be significantly higher than the customary 2 percent. While no one knows how long high inflation will persist, industrial investors should be prepared just in case today is more like the beginning of the 1970s than the end.

I N D U S T R I A L   N E W S

10 CRE Assets Ranked By Their Ability To Withstand Inflation
Globe St. – May 3, 2022
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Wholesale Inflation Rose 11% In April As Producer Prices Keep Accelerating
CNBC – May 12, 2022
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Rising Costs, Limited Supply Place Pressure On Thriving Industrial Property Market
Commercial Property Executive – May 4, 2022
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The Industrial Sector’s Scorching Run Continues
WealthManagement.com – May 4, 2022
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Brokers And Developers Are Getting Creative To Ease Industrial Space Crunch
SIOR – Spring 2022
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R E G I O N A L   N E W S

El Paso To Get 800,000 Square Feet Of New Industrial Building Space
Connect CRE – May 2, 2022
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Highly Visible Industrial Building In Denver Sells To Industrial Outdoor Ventures
Mile High CRE – May 5, 2022
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What Can We Say? Chicago Is The Place To Be, Especially For Industrial Pursuits
RE journals – May 3, 2022
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Logistics Property Co. Gears Up for Chicago’s First Multistory Industrial
Connect CRE – May 11, 2022
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Clarion Partners Acquires Suburban Dallas Industrial Park
Commercial Property Executive – April 26, 2022
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