TAG Industrial Watch: June 17, 2023

So far this year, corporate bankruptcies are piling up at the fastest pace since 2010 when the economy was still struggling to emerge from the Great Recession. Among them is AeroFarms, a promising company that helped pioneer vertical farming that uses up to 95% less water than traditional farming and no pesticides (CoStar). With its use of warehouse space, AeroFarms grabbed headlines across the industrial real estate market back in 2021 as potentially a new source of demand.

Unfortunately, the business model of vertical farming hasn’t proven to be profitable, in part due to the high energy costs of producing artificial light. To make matters worse, venture capital investments in the niche sector collapsed by 91% as the Federal Reserve hiked interest rates. Joining the downfall of AeroFarms are multiple vertical farmers around the world including INFARM, App Harvest, and Fifth Season (The Food Institute). While vertical farming may be ahead of its time, profitable industrial opportunities will likely be found in traditional food production as high inflation becomes the norm.

I N D U S T R I A L   N E W S

AeroFarms’ Bankruptcy Filing Illustrates Trials Of Vertical Farming Industry
CoStar – June 9, 2023
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What Does AeroFarms’ Bankruptcy Signal For CEA’s Future?
The Food Institute – June 13, 2023
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US Corporate Bankruptcies Tick Up In May; Year-To-Date Total Highest Since 2010
S&P Global – June 6, 2023
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A Closer Look At Property Prices’ Downward Trajectory
GlobeSt.com – June 5, 2023
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East Coast Ports Challenge West Coast Mainstays
Commercial Property Executive – June 7, 2023
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R E G I O N A L   N E W S

Single-Tenant Industrial Finds New Owner In Chicago’s Southwest Suburbs
Connect CRE – May 15, 2023
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Buyer Pays Cash For 4-Building Industrial Portfolio Across Dallas Metro
Bisnow – June 14, 2023
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Canadian Solar To Build $250M Manufacturing Facility
Commercial Property Executive – June 16, 2023
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Industrial Availability Rises In Dallas-Fort Worth
CoStar – June 13, 2023
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Industrial Construction Update: Is The Market At Risk For Oversupply?
Mile High CRE – June 6, 2023
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