TAG Industrial Watch: August 10, 2024

Wrapping up the second quarter report of TAG’s industrial markets, we travel west to Denver. The Mile-High City posted an above-average vacancy rate of 8.4%, up 30 basis points on the quarter and nearly matching the 10-year high set in Q4 2023. Outside of the onset of the pandemic in Q2 2020, quarterly leasing activity slowed to a 14-year low, causing net absorption to fall by 91% year-over-year. The availability of small Industrial crept up to 5.3% but sat roughly half of big-box’s vacancy rate of 10.4%. At 3.9%, annual rent growth slipped to a decade’s low.

Last but not least is Los Angeles, one of the nation’s hottest industrial markets over the last decade. However, since the Federal Reserve began raising interest rates in 2022, Los Angeles has cooled off with nine consecutive quarters of negative absorption, pushing vacancy rates up to the highest level in 12 years at 5.5%. The good news is that the vacancy rate was 100 basis points lower than the national average with small industrial topping 4.4% and big-box at 7.1%. After rents peaked in Q4 2023, Los Angeles became one of the first markets to experience negative rent growth, falling -2.0% in Q2 (CoStar).

I N D U S T R I A L   N E W S

Keeping Up With Industrial In A ‘Wildcard’ Year
GlobeSt.com – June 28, 2024
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Prologis To Ramp Up Acquisitions,
Says Market Has ‘Opened Up’
Bisnow – July 17, 2024
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Cracks Show In Port Industrial Markets
Commercial Property Executive – July 23, 2024
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Special Report: Industrial Real Estate Seeing
‘Stagnation’ As Vacancies Rise
Los Angeles Business Journal – June 17, 2024
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Recession Triggered: Payrolls Miss Huge, Up Just 114K As
Soaring Unemployment Rate Activates “Sahm Rule” Recession
ZeroHedge – August 2, 2024
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R E G I O N A L   N E W S

Trammell Crow JV’s 1.7M-SF Santa Clarita
Industrial Reaches Completion, 100% Leased
Connect CRE – July 30, 2024
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Provident Industrial Closes Disposition Of
Two Buildings In El Paso Logistics Park
REjournals – August 7, 2024
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Ryan Cos., PGIM To Develop Denver Industrial Campus
Commercial Property Executive – July 17, 2024
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Logistics Firm Signs Largest Speculative
Industrial Lease In Colorado
GlobeSt.com – July 15, 2024
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Ryan Companies To Build Class-A
Industrial Project In Broomfield
Mile High CRE – July 16, 2024
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