TAG Industrial Watch: January 20, 2024

With December retail sales up 5.6 percent annually, last year’s holiday shopping season has been deemed a big success and a sign of strength by American consumers (Reuters). However, the fact that over-indebted Americans continued to pile up debt in historic fashion at the end of last year just to put gifts under their Christmas trees probably should not be viewed so positively. Furthermore, when adjusted for the Consumer Price Index, December may have outpaced prices but 2023 as a whole was the worst year since the Great Recession with retail trade sales declining by -1.8% (FRED). Given that the CPI likely underscores price increases, retailers probably felt more pain than what the government suggests. That would certainly explain why demand for big-box warehouse space over 200,000 SF plunged by 59% in 2023 while supply hit record levels. As a result, the divergence in vacancies between big-box (7.3%) and small industrial properties between 10,000 to 50,000 SF (3.6%) finished 2023 with a record margin of 370 basis points (CoStar, Top 50 MSAs). Small industrial demand took a hit last year as well but its resilience is starting to give safe haven vibes at a time when the economy continues to show signs of weakness.

I N D U S T R I A L   N E W S

Strong US Retail Sales Underscore
Economy’s Momentum Heading Into 2024
Reuters – January 17, 2024
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US Consumer Debt Soared To New Heights
In The Run-Up To The Holiday Season
CNN – January 8, 2024
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Wayfair Shares Surge After Home Goods Retailer
Announces 1,650 Job Cuts, 13% Of Workforce
CNBC – January 19, 2024
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Industrial’s Vacancy Rate Tops
5% For First Time In Three Years
GlobeSt.com – January 5, 2024
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Investment Sales Continue Their Decline
GlobeSt.com – January 9, 2024
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R E G I O N A L   N E W S

Venture One Buys Chicago-Area
Industrial Portfolio For $50M
Connect CRE – January 15, 2024
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Stream Realty Partners Acquires Two Land Sites
In Houston For Speculative Industrial Development
REjournals – January 15, 2024
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Quilvest, Axis Industrial Outdoor Storage
Acquire 18.6-Acre Site In San Antonio
REBusiness – December 13, 2023
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Big Money Already Flowing On Both Sides
Of Chicago’s Real Estate Transfer Tax Battle
Bisnow – January 12, 2024
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US Paint Manufacturer Temporarily Closes
Its Dallas-Area Plant As It Seeks New Investors
CoStar – January 10, 2024
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