TAG Industrial Watch: November 25, 2023

During the height of the recent industrial real estate boom, investors completely changed their investment strategy in order to take advantage of skyrocketing rents, fueled by record-low vacancy rates. The old standard of buying single-tenant properties with long-term leases quickly went out the window in favor of multi-tenant assets with expiring leases. However, now that the Consumer Price Index (CPI) is under 4% and the industrial real estate market is clearly showing signs of recession, many investors are reverting back to the norm. While the economic environment calls for another change in strategy, going back to the old ways probably won’t help for what’s likely to come next.

Despite what the government reports, inflation is not only alive and well but poised to get far worse. For example, after recent changes to the methodology, the October report showed a whopping 34% decline in the price of health insurance over the last year. Compared to reality, the CPI is simply farfetched and poses a risk to any investor who uses it to make decisions. For a number of reasons such as rising unemployment, debt levels, and high interest rates, inflation could bounce back in historic fashion. The silver lining is that industrial investors have the opportunity to reap massive returns but only if they understand that buying properties that can survive both high inflation and high vacancy rates is the solution.


I N D U S T R I A L   N E W S

No Big Bang On Inflation From Health Insurance
MarketWatch – November 14, 2023
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October CPI Report Offers Key Risk
Management Lesson For Investors

Forbes – November 20, 2023
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Fed Continues To Worry About CRE Lending
GlobeSt.com – November 13, 2023
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Electrical Supply Chain Issues
Sapping Speedy Industrial Deliveries

Bisnow – November 13, 2023
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Layoffs And Bankruptcies Pile Up
In Logistics Amid Shocking Downturn

ZeroHedge – November 21, 2023
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R E G I O N A L   N E W S

Clear Height, Harbert Acquire Minnesota Industrial Complex
Connect CRE – November 13, 2023
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It’s The Long Game For Industrial Developers,
Investors As DFW Market Rebalances

Bisnow – November 8, 2023
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Principle Construction Completes Warehouse
For Seefried Industrial Properties 

Connect CRE – November 20, 2023
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Fort Worth Scales Back Plans For Industrial Zone In
Echo Heights After Health Concerns From Community

NBC DFW – November 15, 2023
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HighPoint Elevated Industrial Park Adds
New Whole Foods Market Distribution Center 

MileHigh CRE – November 13, 2023
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