TAG Industrial Watch: July 27, 2024

This week’s edition of the Industrial Watch is a continuation of the second quarter results for TAG’s Texas markets. While oil prices were up 5.6% in the quarter, vacancy rates in Houston climbed to 7.7% as deliveries more than doubled absorption. However, the availability of small industrial spaces continued to outperform that of big-box with vacancies at 5.3% and 10.5%, respectively. Across Houston, annual rent growth decelerated well below the decade’s average to 1.8%. Meanwhile, between San Antonio and Austin, the combined vacancy rate topped the highest level since Q2 2011 at 9.6%, despite net absorption soaring 481% year-over-year. Negative absorption caused vacancies among small Industrial properties to rise to 6.3% but continued to trail big-box at 11.1%. At 3.3 percent, rent growth slowed to the lowest level in a dozen years. Comprised of El Paso, Laredo, McAllen, and Brownsville-Harlingen, the Border Markets experience a slight contraction in industrial demand despite the increase in imports from Mexico, pushing vacancies to 6.3%. The divergence of vacancies between small industrial and big-box may be the most pronounced along the Border Markets with the former creeping toward 3.0% but the latter hitting 11.8%. Annual rent growth posted a 10-year low of 2.8% as asking rents showed signs of peaking. Next week, we are going to shift gears and head toward TAG’s Midwest markets.

I N D U S T R I A L   N E W S

U.S. Economy Grew At A 2.8% Pace In The
Second Quarter, Much More Than Expected
CNBC – July 25, 2024
Read More

These Industrial Buildings Have
An Absorption Problem
GlobeSt.com – June 18, 2024
Read More

CRE Sentiment Ticks Down
Commercial Property Executive – July 24, 2024
Read More

These 10 U.S. States Have America’s
Worst Economies In 2024
CNBC – July 18, 2024
Read More

These 10 U.S. States Have America’s
Best Economies In 2024
CNBC – July 18, 2024
Read More

Lovett Receives Entitlement For Industrial
Build In Inland Empire West
Connect CRE – July 9, 2024
Read More

Brookfield Buys 15 MSF Light
Industrial Portfolio
Commercial Property Executive – July 15, 2024
Read More

Logistics Firm Signs Largest Speculative
Industrial Lease In Colorado
GlobeSt.com – July 15, 2024
Read More

The Fresh Factory Expands Operations With New
56,000 SF Facility In Downers Grove, Illinois
Accesswire – July 9, 2024
Read More

Chinese Manufacturer Hithium To Invest
$100 Million In Mesquite Plant
WFAA, ABC News – July 16, 2024
Read More