TAG Industrial Watch: December 31, 2022

Unlike the single-family market, commercial real estate, particularly the industrial market, held up well in 2022 as the Federal Reserve hiked interest rates at the fastest pace in 40 years. But the new year will be a challenge for CRE as an estimated $500 billion in mortgages will start to come due (Bisnow). Given that most of these borrowers were planning to refinance, interest payments are set to explode, putting many investments into negative leverage territory.

When it comes to the industrial market, the good news is that market fundamentals are still strong with vacancy rates sitting at just 4.1% at the end of 2022. Despite historically low vacancies, rent growth started to decelerate in the third quarter. Nonetheless, rents finished off the year up 11.4% year-over-year (CoStar, Top 50 MSA markets). While sales activity will continue to be hampered by rising interest rates, the market’s strong fundamentals will help keep a floor under property valuations, giving current landlords a good opportunity to take advantage of historically high equity levels.

I N D U S T R I A L   N E W S

Top Ten CRE Predictions For 2023
Globe St. – December 21, 2023
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Q3 Industrial: Construction Reaches Record Territory, Demand Starts To Wane
Connect CRE – December 1, 2022
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Warehouse Development To Drop In 2023: Prologis
Commercial Property Executive – December 12, 2022
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Pullback On Construction Lending Likely To Cut Back Industrial Pipeline In 2023
WealthManagement.com – December 22, 2022
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Distressed Asset Specialists See Deals In Reckoning That ‘Dwarfs ’08 Collapse’
Bisnow – December 20, 2022
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R E G I O N A L   N E W S

Marcus & Millichap Negotiates Sale of 11,688 SF Industrial Property In Denver
REBusiness – December 19, 20222
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Lovett Industrial Acquires 15 Acres In Denver For Industrial Development
Mile High CRE – December 14, 2022
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First Phase Of Austin Industrial Park Underway
Commercial Property Executive – December 21, 2022
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Box Investment Group Launches, Announces Two Industrial Developments In Dallas
REJournals – December 16, 2022
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Hunt Midwest Brings In UPS for Kansas City Warehouse Lease
Connect CRE – December 21, 2022
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