TAG Industrial Watch: February 25, 2023

The spike in interest rates is finally starting to take its toll on commercial property values. As reported by MSCI, commercial real estate prices dropped 4.8% in January from a year earlier, with much of this decline occurring within the previous month. On an annualized basis, the decline from December to January would amount to nearly 28%, representing the fastest downward pace since the Great Recession days of 2010. Among all property types, only industrial was able to post an annual gain in January at 6.4%. However, even the industrial market is quickly losing steam (Globe St.).

The good news for industrial landlords is that we are early in this cycle and there is still an opportunity to take advantage of historic high property values through a sale-leaseback. Given the recent ascent in the cost of business capital, many companies are turning towards a sale-leaseback as a means to raise capital to help maintain operations, expand production, or retire debt. Although cap rates are now trading between 6% and 8%, this may be a better alternative to traditional business loans (WealthManagement.com).

I N D U S T R I A L   N E W S

CRE Prices Slide At A Rate Not Seen Since 2010
Globe St. – February 24, 2023
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Higher Interest Rates Fuel Sale-Leaseback Activity
WealthManagement.com – February 21, 2023
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CRE Lending To Contract 15% This Year, MBA Predicts
Bisnow – February 15, 2023
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How CRE Boosts The Economy: NAIOP
Commercial Property Executive – February 1, 2023
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So Many New Spec Buildings, Tenants Just
Can’t Fill Them Fast Enough…Right?

REJournals – February 21, 2023
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R E G I O N A L   N E W S

Baytown Site For New 1.3M SF Industrial Project
Connect CRE – February 3, 2023
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Wayfair Abandons Plans For 1.2M SF Warehouse
Under Construction In North Houston

Bisnow – February 22, 2023
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Uline Eyes 1.4 MSF Expansion At Milwaukee-Area Campus
Commercial Property Executive – February 21, 2023
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Westcore Expands Its Texas Industrial
Portfolio With Denton Acquisition

Westcore – February 2023
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San Diego Firm Pays $32 Million For
Industrial Portfolio North Of Dallas

CoStar – February 22, 2023
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