TAG Industrial Watch: March 15, 2025

As 2024 wrapped up, the delinquency rate on all outstanding commercial real estate loans issued by banks rose to 1.6%, the highest level in 10 years. With interest rates likely to stay higher for longer due to inflation and government debt levels, delinquency rates will probably continue their ascent as more and more CRE landlords face the challenge of refinancing their mortgages from historically low rates to the highest levels in two decades. However, for industrial owner-users who find themselves in a similar predicament, this challenge may be a blessing in disguise. Despite the level of mortgage rates, the median sale price of industrial properties hit a record high of $125 per square foot in 2024, up 60% since pre-pandemic (CoStar, top 50 metros, minimum 10,000 SF, classes A, B, & C). In other words, there’s never been a better time for owner-users to conduct a sale-leaseback to raise capital to not only pay off mortgage and business debt but better position their companies to weather the economic storm that could be on the horizon. Though, with sale transactions sitting at the lowest levels in over a decade as annual rent growth decelerates toward negative territory, those record sale prices may not last much longer.

I N D U S T R I A L   N E W S

Banks’ Commercial Property Loan
Delinquency Hits 10-Year High
CoStar – March 10, 2025
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Rising Cap Rates Signal Shift in
CMBS Lending Landscape
GlobeSt.com – February 25, 2025
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Manufacturing Demand Surges As Biden’s
Spending Meets Trump’s Tough Talk
Bisnow – February 19, 2025
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Canada To Impose 25% Retaliatory Tariffs
On $21 Billion Worth Of U.S. Goods
CNBC – March 12, 2025
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Potential Trump Tariffs Drive Asian 3PL
Companies To U.S. Industrial Space
Connect CRE – February 27, 2025
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R E G I O N A L   N E W S

Clear Height Properties JV Acquires
Light Industrial Building In Lisle
Connect CRE – February 25, 2025
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BLT Enterprises Divests Of Industrial Building
In Los Angeles To Expo Flooring For $4.7M
REBusiness – March 13, 2025
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Trump Tariff Threats Are Pushing Canada’s Largest
Oil Producer To Break Its Dependence On The U.S.
CNBC – March 12, 2025
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Brennan JV To Build Industrial
Project Near US-Mexico Border
Commercial Property Executive – February 20, 2025
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Asian-Based 3PLs Target Inland
Empire As Tariffs Loom
GlobeSt.com – February 28, 2025
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