TAG Industrial Watch: February 10, 2024

Take a look inside your typical warehouse and you’ll quickly realize that America’s industrial real estate industry is largely dependent upon the nation’s import-driven trade deficits that topped $1 trillion for the third consecutive year. In 2023, those imports declined by -1.9% when adjusted for the import price index. However, thanks in part to record oil exports, total shipments rose 3.2% once the export price index was accounted for (U.S. Census Bureau, FRED). The recent trade data provides further evidence of the divergence between small industrial and big-box that TAG has been covering over the last year. Less imports largely impact big-box while higher exports relatively support small industrial. Given that retail trade sales, adjusted for the Consumer Price Index, contracted by -1.8% last year – representing the first decline since the Great Recession (FRED), we can expect demand for big-box space to continue to fall as long as consumer demand continues to weaken. On the flip side, if the dollar starts to break down against other currencies, foreign demand for American goods will only be heightened. For small industrial properties tied to export industries like oil, the future remains bright even though the overall industrial market faces uncertainty.

I N D U S T R I A L   N E W S

US Trade Deficit Rises Marginally In
December; Narrows Sharply In 2023

Reuters – February 7, 2024
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Available Space For Smaller Industrial
Properties Remains Near Record Low

CoStar – February 7, 2024
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Red Sea Supply Chain Inflation May Be Peaking
Already, New Trade Data Suggests

CNBC – January 31, 2024
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Disruptions In Red Sea, Panama Canal Causing Supply
Chain Snafus That Bring Déjà Vu For CRE

Bisnow – January 24, 2024
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Extra-Large Warehouse Leasing Slows Down
Commercial Property Executive – January 30, 2024
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R E G I O N A L   N E W S

1M-SF Industrial Outdoor Storage
Portfolio Trades In Inland Empire

Connect CRE – February 6, 2024
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Contegra Construction Co. Completes
Inland Port 9 In Kansas

REjournals – February 2, 2024
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Invesco Sells Denver Industrial Campus For $74M
Commercial Property Executive – January 19, 2024
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Blackstone Lists L.A. Campus As
Industrial Redevelopment Opportunity

GlobeSt.com – February 8, 2024
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Industrial Rent Growth At Record High In
Minneapolis, Bucking National Trend

CoStar – January 30, 2024
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