TAG Industrial Watch: June 29, 2024

In our January edition of the Industrial Watch magazine, we examined how the development of the BRICS nations (a group of nations that aim to decline its use of U.S. dollars) could profoundly impact America’s industrial real estate. The U.S. dollar is still the world’s reserve currency, meaning that globally traded commodities (most importantly oil) are primarily traded in greenbacks. However, the dollar’s dominance has quickly been chipped away in recent years. Earlier this month, the world’s largest oil exporter, Saudi Arabia, allowed its 50-year-old oil deal with the U.S. to expire (news conveniently overlooked by major media outlets). Giving rise to the term “petrodollar”, this deal provided the kingdom military protection from the U.S. in exchange for Saudis strictly selling their oil in dollars that would circulate back to the U.S. in the form of Treasury purchases, helping to finance U.S. budget deficits.

With Saudi Arabia not renewing this agreement with the U.S., the newest member of the BRICS is free to sell its oil in exchange for other currencies such as the Chinese yuan, in addition to the dollar. The Saudi’s actions have followed those of the United Arab Emirates and Russia, which are also top-ranked oil exporters that belong to the BRICS. If demand for dollars to buy oil on the international market continues to fade, the price of oil in dollars could rise exponentially in the years to come, providing a windfall for certain industrial markets. At a time when port cities are seeing a surge in vacancies, areas like metro Houston (the nation’s top oil refiner and exporter) will likely outperform the commercial real estate market this decade.

I N D U S T R I A L   N E W S

Petrodollar: US Dollar in Jeopardy If
Saudi Arabia Stops Accepting USD

Watcher.Guru – June 24, 2024
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The Mysterious Gold Buyer In China
ThinkChina – June 19, 2024
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There’s More Large Industrial Spaces
Near Major Seaports Than In Decades

GlobeSt.com – June 10, 2024
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Big Box Industrial Space Available
Near Major US Ports Hits Record High

CoStar – June 4, 2024
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May Retail Sales Rise 0.1%,
Weaker Than Expected

CNBC – June 18, 2024
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R E G I O N A L   N E W S

Chicago City Council Approves Land Sale
To Developer For Industrial Project

Connect CRE – June 19, 2024
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Google Leases More Than 1 Million-Square-Foot
Industrial Building That Sat Empty For Nearly A Year

CoStar – May 31, 2024
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Brennan Acquires Two
Distribution Buildings In Denver

PR Newswire – June 3, 2024
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Ballot Measure To Overturn ULA Struck
Down By California Supreme Court

The Real Deal – June 20, 2024
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Kansas City Fed Manufacturing
omposite Weakens Further In June

Seeking Alpha – June 27, 2024
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