TAG Industrial Watch: February 24, 2024

When the Regional Bank Crisis unfolded a year ago, many analysts overlooked the unprecedented growth in commercial real estate loans over the last decade and downplayed the threat they posed to the banking sector. Predictably, CRE loans are becoming a real issue for banks as delinquent loans more than doubled to $24.3 billion from $11.2 billion in 2023. Compounding this problem is that bank reserves intended to cover CRE losses are dropping below the value of delinquent loan amounts. New York Community Bank (which overtook the failed Signature Bank last year) lost more than 50% of its market value after reporting losses tied to its CRE loans (Financial Review).
Given that $929 billion worth of commercial mortgages are coming due in 2024 (up 28% annually) troubles in the banking industry may be far from over as we seemingly get closer to a credit crunch. When it comes to the industrial market, 27% of all industrial loans (second only to the lodging market) will need to be either repaid or refinanced this year in an environment with a dwindling pool of buyers and the highest interest rates in over 15 years (MBA). Fortunately, industrial property values remain historically high for the moment, giving landlords who have debt maturing within the next couple of years an opportunity to exit the market before the economic sands shift again.

I N D U S T R I A L   N E W S

20 Percent Of Commercial And Multifamily
Mortgage Balances Mature In 2024

MBA – February 12, 2024
Read More

Bad Property Debt Exceeds
Reserves At Largest US Banks

Financial Review – February 19, 2024
Read More

The Changing Direction Of Industrial CRE
GlobeSt.com – February 20, 2024
Read More

Prologis Predicts Lower Occupancy, Slower
Cash ​​​​Flow On Softening Industrial Market

Bisnow – January 17, 2024
Read More

Business Inventories Increase 0.4%
In December, As Expected

Seeking Alpha – February 15, 2024
Read More

R E G I O N A L   N E W S

Deerfield Votes To Ban Warehouse,
Distribution Facilities

Connect CRE – February 12, 2024
Read More

Mexican Development Giant Meor Seeks U.S.
Equity Partner For $1.7B Industrial Plan

Bisnow – February 21, 2024
Read More

Massive Industrial Hub Coming To El Paso
Commercial Property Executive – February 15, 2024
Read More

Chicago Suburb Bans Warehouse,
Logistics Development

GlobeSt.com – February 12, 2024
Read More

Reports: SpaceX To Open $100M Office,
Industrial Facility In Brownsville, Texas

REBusiness Online – February 21, 2024
Read More