TAG Industrial Watch: March 11, 2023

Despite a noticeable slowdown in leasing demand just as a slew of new deliveries are hitting the market, the optimism in industrial real estate remains upbeat. However, the economic environment is quickly changing as higher interest rates begin to impact an important segment of the industrial market, manufacturing. Unlike the retail industry, the manufacturing industry is far more capital intensive (e.g., machines and tools) and therefore is more sensitive to changes in interest rates.

Recent data from the ISM Manufacturing Purchasing Manager’s Index indicates that the industry is already in a recession (ICIS). Contagion effects are being felt particularly in the intermodal transportation industry as freight movements stumble. As higher interest rates continue to ripple throughout the economy, production costs will steadily rise, squeezing profit margins along the way. On a positive note, manufacturers who also own their properties have an essential lifeline to weather the economic storm in the form of a sale-leaseback. Though industrial properties have started to decline in value, equity levels remain at historic high levels, at least for now.

I N D U S T R I A L   N E W S

Exclusive Research: Continued Confidence In
Industrial Real Estate, Despite Headwinds
WealthManagement.com – March 8, 2023
Read More

CDI Economic Summary: US Manufacturing Slowdown
Takes Hold To Kick Off Challenging 2023
ICIS – February 22, 2023
Read More

Column: U.S. Freight Movements FallAmid Excess Inventories
Reuters – March 10, 2023
Read More

Prologis CEO Sees Logistics Warehouse Industry
Remaining On Solid Ground
FreightWaves – March 9, 2023
Read More

Amazon Scales Back Warehouse Portfolio — Again
Bisnow – March 2, 2023
Read More

R E G I O N A L   N E W S

REPORT: Colorado Ranks 9th In Commercial Warehouse Development
Bisnow – March 1, 2023
Read More

GreenPoint Launches $500M Industrial Outdoor Storage Platform
Commercial Property Executive – March 9, 2023
Read More

Defense Supplier Opens Rocket Motor Manufacturing
Plant In Central Texas
CoStar – February 27, 2023
Read More

Masterpiece International Signs 75,072 SF Industrial
Lease In Suburban Chicago
REBusiness Online – March 9, 2023
Read More

Denver Property Among Top 50 U.S. Industrial Asset Sales In 2022
Mile High CRE – March 6, 2023
Read More