TAG Industrial Watch: May 27, 2023

Corporations emerged from the Great Recession in 2010 with debt levels slimming down to about $6.1 trillion. But thanks to the Federal Reserve’s zero percent interest rates, corporations more than doubled their debt loads to the tune of $12.8 trillion by the end of 2022 (FRED). With the Fed jacking up interest rates to the highest levels in over 15 years, that mountain of debt is now posing a threat not just to overleveraged companies, but the commercial real estate market. Faced with soaring debt payments, companies are being forced to scale back operations, including their real estate. This contributed to the 40% decline in industrial absorption during the first quarter of the year from the end of 2022 (Commercial Property Executive). Unfortunately, we are still in the early stages of this corporate debt reset, meaning a lot more pressure is to be expected on industrial real estate demand. For industrial owners that are considering taking advantage of historically high equity levels, time is of the essence.

I N D U S T R I A L   N E W S

How Debt Costs Will Affect Industrial Demand This Year
Commercial Property Executive – May 22, 2023
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Industrial Faces An Additional Upcoming Challenge In Overall Corporate Debt
Globe St. – May 22, 2023
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Industrial Real Estate Development Heads For “Cyclical Reset”
Connect CRE – May 19, 2023
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Jamie Dimon Warns Of A Commercial Real Estate Downturn
CNN Business – May 23, 2023
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Manufacturing Activity Is Still Shrinking, but New Orders Show Improvement
Barron’s May 1, 2023
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R E G I O N A L   N E W S

Amazon Puts Bridgeport Warehouse Up For Sublease
Connect CRE – May 24, 2023
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The Nation’s Second-Worst Housing Shortage Is Crashing Into ‘The Texas Miracle
Bisnow – May 23, 2023
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Stillwater Capital Breaks Ground On Dallas-Area Industrial Park
Commercial Property Executive – May 18, 2023
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Industrial Rent Growth As Far As The Eye Can See
Globe St. – May 24, 2023
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New Warehouse Construction In Grapevine Approved By Council
Community Impact – May 19, 2023
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