TAG Industrial Watch: February 1, 2025

After three consecutive rate cuts, the Federal Reserve hit the pause button this week, expressing concerns over inflation. Since consumer prices began surging in 2021, TAG has maintained that inflation will likely be problematic for many years to come but it might not be the biggest problem that the economy will face. With interest rates on the 10-year Treasury recently touching 4.8% before a pullback, announced job cuts hitting the highest-level outside of the pandemic year since the Great Recession, corporate bankruptcies reaching 14-year highs, and retail store closures expected to double this year, the biggest threat could be stagflation.

For the industrial market, vacancies hit 10-year highs and net absorption trends toward negative territory along with rent growth. However, industrial investors may have a great opportunity to sell high and buy low again. At $125 per square foot, the median sale price of industrial properties hit another record high in 2024, up 8.8% annually. However, with fundamentals trending lower, prices are bound to follow. This gives investors an opportunity to trade out of typical warehouses that have done well hitherto when stagflation was not a concern and trade into specialized industrial assets that will likely benefit from high inflation and weak economic growth.

I N D U S T R I A L   N E W S

Rising 10-Year Yields Come Back
To Punish Regional Banks
GlobeSt.com – January 22, 2025
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This Year’s US Store Closings Expected
To Surpass Pandemic Peak
CoStar – January 23, 2025
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Fed Holds Rates Steady, Takes
Less Confident View On Inflation
CNBC – January 29, 2025
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Job Cuts Rise 5.5% Over Last
Year; 38,792 In December 2024
Challenger, Gray, & Christmas, Inc. – January 9, 2025
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Peter Schiff: All The
Data Confirms Stagflation
ZeroHedge – January 20, 2025
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R E G I O N A L   N E W S

Gantry Secures $32M For
Kansas City Industrial
Connect CRE – January 20, 2025
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Leasing Volume In Milwaukee Industrial
Market Soars By 70% During Fourth Quarter
Commercial Property Executive – January 17, 2024
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Rosewood, Pillar Buy 200,765 SF
Industrial Property In East Plano
GlobeSt.com – January 7, 2025
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Realterm Makes Lending Debut
Businesswire – January 7, 2025
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Large Deals Drive Positive
Industrial Absorption In Central Valley
WFAA – January 14, 2025
Read More