TAG Industrial Watch: February 18, 2023

Just like the beginning of last year, one of the biggest expectations in 2023 is for inflation to slow down towards the Federal Reserve’s 2% target rate. While it is too early to determine if this time is different, recent data suggests that the general consensus might be surprised once again. In January, the Consumer Price Index unexpectedly jumped up by 50 basis points from December, up 6.4% year-over-year (Globe St.). The Producer Price Index followed suit, rising above expectations at 70 basis points, which equates to a 6.0% annual rise (CNBC).

If this is indeed the beginning of a resurgence in inflation, it comes at a time when the industrial market is quickly losing steam. After touching an all-time high of 12.2% in Q2 2022, year-over-year rent growth among the top 50 metros in the U.S. has slowed down to 10.5%. The slowdown in rents has been driven by a noticeable reduction in demand combined with a surge in new supply (CoStar, properties 15K SF plus).

While the first quarter is still developing, owners-users need not wait until the picture becomes clear for everyone. Before the economic reality of high inflation and high interest rates sets in, these landlords have an opportunity to unlock historic levels of equity by conducting a long-term sale-leaseback with minimum rent escalations.

I N D U S T R I A L   N E W S

As Inflation Ticks Back Up To 6.4%, It’s Time For A Broader View
Globe St. – February 15, 2023
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Wholesale Prices Rose 0.7% In January, More Than
Expected, Fueling Inflation Increase

CNBC – February 16, 2023
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Still Hot, Just Not ‘Blistering’: U.S. Industrial
Market Starting To Look Like 2019

Bisnow – February 12, 2023
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US Port Activity Reaches Peak: Savills
Commercial Property Executive – February 16, 2023
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Commercial Real Estate Lending Drop Steepens,
Led Lower By Industrial Financing

CoStar – February 14, 2023
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R E G I O N A L   N E W S

Logistics Fund To Add S. Dallas Outdoor Truck Yard
Connect CRE – February 6, 2023
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Panattoni Plans 1 MSF Industrial Park Near US-Mexico Border
Commercial Property Executive – February 10, 2023
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World’s Biggest Pinball Machine Maker Expands After Bump In Demand
CoStar – February 15, 2023
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Venture One Acquires 15,359 SF Industrial Building In Chicago
RE Business – February 15, 2023
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Rare Industrial Park In Pueblo Sells For $3.6M
Mile High CRE – February 9, 2023
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