TAG Industrial Watch: March 30, 2024

When it comes to industrial (especially flex) properties, office and industrial spaces have always gone hand-in-hand, which creates great opportunities in markets with plenty of empty office buildings but a short supply of small industrial properties. If developers can successfully rezone office buildings or find properties located in general commercial districts that include light industrial, they will be able to take advantage of market conditions as they change. As the first quarter comes to a close, the national vacancy rate for small industrial properties between 10,000 and 50,000 square feet sits at 3.9 percent versus 8.6 percent for office buildings of the same size. Thanks to high-interest rates and steadily rising construction costs, little development has gone toward small industrial spaces (despite low vacancies) because these properties lack economies of scale, unlike their big-box counterparts. Office-to-industrial conversions could help alleviate supply constraints for small industrial space. Traditionally, the cost of conversions typically deters these types of redevelopments but if small office buildings continue to lose value (down 10% in 2023), industrial investors may soon become big players in the office market (CoStar, Top 50 Metros).

I N D U S T R I A L   N E W S

Is Office-To-Industrial Part Of The Obsolete
Office Solution? One City Is About To Find Out
Bisnow – March 22, 2024
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Small Industrial Spaces Are In Short Supply
Across The US. Here’s Where They Are Scarcest
CoStar – March 20, 2024
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This Exec Thinks It’s A Long Way to Bottom
GlobeSt.com – March 21, 2024
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Staying Busy When Industrial Momentum Hits The Brakes
Commercial Property Executive – March 18, 2024
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Logistics Companies Scramble After Bridge Collapse
Closes Port Of Baltimore Until Further Notice
CNBC – March 26, 2024
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R E G I O N A L   N E W S

ElmTree Funds Launches Two
Industrial Property REITs
Connect CRE – March 20, 2024
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‘We Are Buying As Much Office As We Can Swallow’:
One Shark Is Circling Chicago’s Depressed Office Market
Bisnow – March 18, 2024
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Prologis Sells Denver Industrial Park
Commercial Property Executive – March 19, 2024
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Korean Tech Company Hanwha Plans $100M
Georgetown Project To Work With Tesla
My San Antonio – March 22, 2024
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Lovett Industrial Scores Financing
For Addison Industrial Project
TheRealDeal – March 20, 2024
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