TAG Industrial Watch: June 1, 2024

As we expected, the initial report of Gross Domestic Product for Q1 has already been revised lower this week to just 1.3% (Yahoo! Finance). Meanwhile, a significant recession indicator has gone unreported this year. In 2023, U.S. merchandise imports (adjusted for import prices) declined by -1.8%, reflecting the true weakness in consumer demand (U.S. Census Bureau, FRED). Since the 1980s, the U.S. economy has become reliant upon foreign goods, so it should come as no surprise that real imports declined each of the last four times the economy was in recession. Falling imports also have major implications on industrial real estate, particularly for big-box warehouses that are mainly used to distribute imports. First-quarter real imports did bounce back into positive territory up 1.6% year-over-year but if imports resume their decline, companies like Amazon who are leasing large industrial spaces may be forced to sublease those spaces in the near future. Consequently, vacancy rates will continuously rise at a faster pace among big-box, widening the divergence between small industrial.

I N D U S T R I A L   N E W S

Amazon’s Warehouse Leases Keep Getting Bigger
GlobeSt.com – May 20, 2024
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Look Out, Industrial Landlords: Amazon Is Once
Again Taking Down Big Blocks At A Rapid Clip

Bisnow – May 10, 2024
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GDP: US Economy Grew At A Slower
Pace Than Initially Thought In Q1

Yahoo! Finance – May 30, 2024
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Americans Bought Fewer Chinese Imports In 2023,
But Chinese Exporters Aren’t Necessarily Hurting

Marketplace – February 8, 2024
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Property Management Success:
Cool Heads For Cold Storage

Commercial Property Executive – May 19, 2024
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R E G I O N A L   N E W S

Northern Builders Inks Two Chicagoland
Build-To-Suit Developments

Connect CRE – April 26, 2024
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Sansone Group Breaks Ground On
Commerce Center Project In Austin

REjournals – May 17, 2024
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W. P. Carey Secures Largest Industrial
Lease In Chicago This Year

GlobeSt.com – May 20, 2024
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Chicago Industrial Build-To-Suits Begin Overtaking
Spec Builds As Developers Lose Appetite For Risk

Bisnow – May 23, 2024
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Blackstone Industrial Arm Plots 1.1M
SF Project Near Tesla Gigafactory

TheRealDeal – May 29, 2024
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