TAG Industrial Watch: September 9, 2023

It is no secret that commercial real estate is no longer experiencing the boom witnessed during the post-COVID-19 era. For the second quarter, debt origination fell by 52 percent year-over-year (The Real Deal) with banks tightening their lending standards across the board. In turn, sales volume has plummeted as financing deals have become increasingly more difficult and the spread between buyers and sellers widens. The current market conditions yield a not-so-optimistic outlook for the commercial real estate industry. With approximately $900 billion of real estate loans and securities coming due by the end of next year (WSJ), there will certainly be losses on loans that will have to be refinanced at higher interest rates. Consequently, this could set off a chain reaction, or “doom loop” as banks tighten up and restrict lending further, causing property prices to decline and ultimately exacerbating losses for lenders.

While this is bad news for lenders, this is good news for tenants (especially in the industrial market where rents continue to rise) who want to stop renting and start owning. After falling to the lowest level in two decades, the share of industrial properties purchased by tenants is up from 7% in 2022 to 13% so far in 2023 (CoStar). As cap rates rise, putting more pressure on property values, buying opportunities for tenants will continue to improve.

I N D U S T R I A L   N E W S

Banks’ Exposure To CRE Triggers “Doom-Loop” Fears
The Real Deal – September 6, 2023
Read More

August 2023 Commercial Real Estate Market Insights
NAR – August 30, 2023
Read More

Inside the Wild Swings Of Smaller Industrial Sales
GlobeSt.com – September 7, 2023
Read More

Why Kingbird Investment Management Sees
Opportunity In Higher Interest Rates

Wealth Management – August 24, 2023
Read More

Construction Spending To Rise In H2 2023
Commercial Search – September 6, 2023
Read More

R E G I O N A L   N E W S

The Top Item On The Agenda During Kansas
City Industrial Summit? Optimism

REJournals – August 30, 2023
Read More

Industrial Influencers
GlobeSt.com – September 5, 2023
Read More

Missner Group, Realterm Complete Development
Of 130,354 SF Spec Industrial Building In Chicago

RE Business Online – September 7, 2023
Read More

Standard Real Estate Invests In TCC’s Woodridge Industrial Center
Connect CRE – September 7, 2023
Read More

Shovel-Ready Industrial Site In SoCal Sells For $61M
Commercial Observer – July 19, 2023
Read More