TAG Industrial Watch: July 22, 2023

At this point, it has become well recognized that the industrial market, along with the rest of commercial real estate, is in decline. However, the common belief is that the industrial market is simply returning to normalcy after the heightened years of the pandemic. Unfortunately, this argument mistakenly assumes that the economic environment we had for years prior to the pandemic was normal. From 2010 to 2022, the U.S. economy was artificially propped up by the lowest interest rates in our nation’s history. Among the unintended consequences, the Federal Reserve’s artificially low interest rates blew up a massive bubble in industrial real estate.

Now that rates have gone from 0% to 5%, that bubble is now beginning to pop. When markets go from boom to bust, they usually act like a pendulum swing. This means that market fundamentals like vacancy rates and rent growth are far more likely to skyrocket and collapse than return to “normal.” Given that it could take a decade for property values to return to current levels, as was the case during the aftermath of the Great Recession, industrial owners considering a sale should act sooner, rather than later.

I N D U S T R I A L   N E W S

Prologis CEO Moghadam: Industrial Is Returning
To Normal After ‘Ridiculous’ Few Years
Bisnow – July 18, 2023
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Inside Industrial’s Rising Vacancy Rate
GlobeSt.com – July 7, 2023
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Can Cold Storage Keep Its Cool This Summer?
Commercial Property Executive – July 18, 2023
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US Industrial Market Cooldown Hits One Year
Mark, But Tight Availability Persists
CoStar – July 18, 2023
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Report: Don’t Assume That Onshoring
Will Boost CRE’s Warehouse Segment
Connect CRE – June 29, 2023
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R E G I O N A L   N E W S

Tesla Supplier Chooses Manor For 350K SF Plant, 800 Hires
Connect CRE – July 10, 2023
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Denver’s First New Mayor In 12 Years
Takes Office With Support Of CRE
Bisnow – July 17, 2023
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Birtcher Breaks Ground On Inland
Empire Industrial Project
Commercial Property Executive – July 20, 2023
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Former Tuesday Morning Warehouse
Undergoing Major Revamp
Connect CRE – July 14, 2023
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Meridian Completes Construction On
West Chicago Spec Project
REJournals – July 20, 2023
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