TAG Industrial Watch: June 8, 2024

With industrial demand slowing down to levels not seen since 2010 and eight times as much supply hitting the market than what’s being absorbed, it should be expected that rent growth is slowing down. The annual growth rate of asking rents has decelerated from a record high of around 10.7 percent to 4.7 percent heading into the last month of Q2 (CoStar, Top 50 metros, minimum 10K Sf). Rent growth has officially fallen below its pre-pandemic 5.8 percent trendline that was on track since 2016. Rents are quickly decelerating toward the lowest level in a decade and at its current trajectory could drop into negative territory as early as Q1 2025. In coastal markets like Los Angeles, the reality of falling rents has already arrived. Given the current inflationary environment, negative rent growth is not ideal for property values. In the face of these new challenges, investors should strongly consider how to protect their real estate portfolios from stagflation. Today is the perfect time to consider investing in specialized industrial facilities that will allow landlords to raise rents to keep pace with the cost of living.

I N D U S T R I A L   N E W S

US Industrial Construction Outstrips Tenant
Demand For Sixth Straight Quarter

GlobeSt.com – May 31, 2024
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U.S. Industrial Leasing Plunges In
Q1 As ‘Recalibration’ Continues

Bisnow – April 17, 2024
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Why 2024 Is The Year To Invest
In Industrial Real Estate

Commercial Property Executive – June 5, 2024
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Large Banks Face Higher Risk From Commercial
Property Loans, Sparking Increased Concern

CoStar – June 4, 2024
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Private Payrolls Growth Slows To 152,000 In May,
Much Less Than Expected, ADP Says

CNBC – June 5, 2024
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R E G I O N A L   N E W S

RL Cold, Graycor To Deliver
Minneapolis Cold Storage Facility

Connect CRE – May 13, 2024
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Crow Holdings Breaks Ground On 511,000 SF
Industrial Project In East Dallas

REBusiness – May 30, 2024
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$500M Factory Breaks Ground In San Antonio
Commercial Property Executive – June 6, 2024
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DRA Nabs Fully Leased Industrial
Portfolio In Plano As Market Cools

The Real Deal – June 4, 2024
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175,000 SF Of Class A Industrial
Space Breaks Ground In Littleton

Mile High CRE – May 29, 2024
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