TAG Industrial Watch: November 2, 2024

Before the Federal Reserve cut rates on bank-to-bank lending in September, the general expectation was for interest rates throughout the economy to continue their decent. However, if you follow the Industrial Watch then it should come as no surprise that since the Fed cut its benchmark rate by 50 basis points, rates on the closely watched 10-year Treasury is up 60 basis points to 4.3%. In May, we warned, “Industrial investors sitting on the sidelines waiting for lower (mortgage) rates should consider that rates may not be significantly lower in the future (following Fed rate cuts) and potentially even higher.” One measure of average mortgage rates on industrial loans shows that borrowing costs are up 70 basis points to 6.8% since the Fed began cutting rates (Select Commercial Funding).

While the Fed is expected to cut rates further at its meeting next week, interest rates throughout the economy will likely proceed higher over time even if rates recede on the news. The reason for rates defying the Fed is simple, America’s ever-growing mountain of debt, driven by the federal government, is fundamentally pushing rates up. Simply put, there are too many borrowers and not enough lenders. Nonetheless, interest rate-sensitive sellers and buyers who continue to sit on the sidelines still have an opportunity to take advantage of the current environment before the threat of a credit crunch impacts the market.

I N D U S T R I A L   N E W S

The Surprising Reason Mortgage Rates
Are Up Despite Interest Rate Cuts
The Street – October 20, 2024
Read More

Even Some Of The ‘Safest’ CRE
Bonds Are Getting Hammered
GlobeSt.com – October 31, 2024
Read More

Industrial Construction Continues
Its Plummet As Vacancy Rises
Bisnow – October 7, 2024
Read More

US Job Openings Drop To More
Than 3-1/2 Year Low In September
Reuters – October 29, 2024
Read More

U.S. Economy Grew At A 2.8% Pace In
The Third Quarter, Less Than Expected
CNBC – October 30, 2024
Read More

R E G I O N A L   N E W S

238K-SF Houston Industrial
Property Changes Hands
Connect CRE – October 11, 2024
Read More

DFW Industrial Vacancy Rate Remains Elevated
Even As New Construction Nose-Dives
Bisnow – October 11, 2024
Read More

Foundry Eyes 2nd Office-To-Industrial
Conversion In Dallas
Commercial Property Executive – October 17, 2024
Read More

$80M Federal Grant Fuels Launch Of Hillwood’s
AllianceTexas Smart Port, A ‘Once-In-A-Generation’ Project
Dallas Innovates – October 25, 2024
Read More

Documents Show Tesla Planning Massive
Expansion Of Gigafactory In Austin
KVUE – October 29, 2024
Read More