TAG Industrial Watch: October 21, 2023

There is no shortage of reasons why annual industrial sales are down six quarters in a row. The highest interest rate environment in over 15 years is hitting investment demand like a wrecking ball. Sellers, still focused on the unprecedented highs of 2021 and 2022, are reluctant to drop asking prices and raise cap rates in order to generate more demand. And oh yeah, banks (loaded with Treasuries and plenty of CRE loans) are sitting on $558 billion in paper losses (Reuters). Whether these unrealized losses become realized in the near future is a topic for another blog. But it is clear that these paper losses are discouraging banks from lending as they seek to conserve capital just in case there’s a run on their deposits. Unfortunately for the industrial market, this will only exacerbate the problems in sales activity. An inevitable credit squeeze appears to be in the waiting, which means that industrial landlords who want to take advantage of historically high property values need to act proactively.

I N D U S T R I A L   N E W S

Bank Of America’s Unrealized Losses
On Securities Rose To $131.6 Bln
Reuters – October 17, 2023
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Who’s Lending For Industrial
Globe St. – October 9, 2023
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Big Banks Are Quietly Cutting Thousands
Of Employees, And More Layoffs Are Coming
CNBC – October 19, 2023
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No Vacancy? Not Anymore: Industrial
Tenants Have Leverage At Last
Bisnow – October 17, 2023
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Prologis Lowers Earnings Outlook As
Global Warehouse Demand Drops
CoStar – October 17, 2023
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R E G I O N A L   N E W S

JCB Chooses San Antonio For $265M
Equipment Manufacturing Plant
Connect CRE – October 13, 2023
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MDH Partners Acquires 247,000-Square-
Foot Industrial Facility In Indiana
REjournals – October 13, 2023
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Industrial Vacancy In DFW Tops 8% As Construction
Pipeline Unloads And Interest Rates Chill Deals
Bisnow – October 10, 2023
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Walmart Opens 1.5 MSF Fulfillment Center Near Dallas
Commercial Property Executive – October 18, 2023
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Industrial Leasing Activity Plunges In Orange County
GlobeSt.com – October 13, 2023
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