TAG Industrial Watch: July 1, 2023

This week marks the midpoint of 2023 and so far, the report card on the industrial real estate market is not looking too good. The Federal Reserve’s rate hikes predictably hit sales activity particularly hard. At less than 1,800, the number of transactions posted so far for the second quarter ranks as the lowest level for any quarter since 2010 (CoStar, minimum 10,000 square feet). Compared to last year, transactions are down a record 55%.

Unfortunately, it’s just not sales activity that is rapidly deteriorating, but market fundamentals. Going into 2023, the national industrial vacancy rate sat near historic lows at 4.1%, but thanks to a record amount of new supply and falling demand, vacancies have already increased to 4.8% by mid-year. Net absorption, which fell toward “normal” levels during Q1, is set to post its weakest quarter in a decade as Q2 concludes. Given that deliveries are expected to pick up during the second half of 2023, the national vacancy rate could top 6% by year’s end (a level not seen since 2016). While all the attention is on the office sector, industrial owners should take advantage and sell now before property values start to reflect reality.


I N D U S T R I A L   N E W S

CRE Transactions Have Crashed 70% Year Over Year
GlobeSt.com – June 20, 2023
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We Also Need To Amenitize Industrial. Start With The Break Room
Commercial Property Executive – June 6, 2023
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Prologis To Acquire 14MSF Blackstone Industrial Portfolio In $3.1 Billion Deal
PR Newswire – June 26, 2023
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A Former CRE Investment Darling, Industrial Properties Are Coming
Back To Earth But Could Stabilize With Just-In-Case Thinking

Benzinga – June 28, 2023
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Factbox: Big Banks Stand Strong Against Fed’s Commercial Real Estate Gloom
Reuters – June 28, 2023
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R E G I O N A L   N E W S

Highflier Brookfield Developing Austin Industrial Project
Connect CRE – June 29, 2023
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Trade-Critical Warehouse On Texas-Mexico Border Sells For $9.1 Million
REJournals – June 27, 2023
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Colorado Leads The U.S. In YOY Construction Job Losses
Bisnow – June 20, 2023
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Canadian Solar To Build $250M Manufacturing Facility
Commercial Property Executive – June 16, 2023
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Ace Hardware Picks New Kansas City Industrial Park For Distribution Hub
CoStar – June 22, 2023
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