TAG Industrial Watch: September 30, 2023

Higher borrowing costs have resulted in a corporate landscape that is plagued with bankruptcies in 2023. After 11 rate hikes, the consequences are beginning to unfold as corporations with overstretched balance sheets are struggling to stay afloat. As of July, over 400 corporations have gone under. Apart from the heights of the pandemic in 2020, the U.S. has not seen these kinds of numbers since 2010, when 530 corporations had filed for bankruptcy through July. Although the economy as a whole will be affected by the rising interest rate environment, some sectors are feeling the effects harder than others. With the second most bankruptcies so far in 2023, the industrial sector is inherently at greater risk of default as it is historically more capital intensive and thus more reliant upon debt compared to other sectors. With the potential for more rate hikes in the future, and a slew of corporate debt coming due at much higher costs, the number of industrial firms going under is likely to surge. As an owner-user of industrial real estate, it’s a good time to consider a sale-leaseback in order to raise capital that could be used as a lifeline if needed.

I N D U S T R I A L   N E W S

Visualized: U.S. Corporate Bankruptcies On the Rise
VisualCapitalist.com – August 21, 2023
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Fed’s Neel Kashkari Isn’t Sure If Interest Rates
Are High Enough To Stop Inflation

CNBC – September 27, 2023
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Prologis Explains Why Today’s Supply Chains
Require More Logistics Space

GlobeSt.com – September 27, 2023
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Manufacturing Rebound Faces Real Estate Roadblocks
CommercialSearch.com – September 25, 2023
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Steady Times Again? That’s What One CRE Veteran
Says Is Waiting For Commercial Construction Firms

REJournals.com – September 29, 2023
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R E G I O N A L   N E W S

Inland Empire Industrial Slows In Q3 Yet Remains Stable
Connect CRE – September 26, 2023
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Exclusive: Investcorp Pays $216M For Industrial Portfolio
Commercial Property Executive – September 21, 2023
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Top Markets For Industrial Deliveries In H1 2023
Commercial Property Executive – September 18, 2023
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BGO Industrial REIT Buys Stake In Midwestern Portfolio For $130M
GlobeSt.com – September 28, 2023
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Industrial Construction Turns A Corner In Dallas-Fort Worth
CoStar – September 21, 2023
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