TAG Industrial Watch: May 3, 2025
The Gross Domestic Product (GDP) numbers are out, and for the first time since the first half of 2022, the economy officially contracted at an annualized rate of -0.3%. While price inflation accelerated, indicating stagflation, the culprit for the economic slowdown was record-high imports that knocked off -4.8% from GDP (BEA). In anticipation of the president’s tariffs levied at the start of Q2, U.S. retailers boosted their purchases from overseas and stocked up on inventories. Although imports contract from GDP (which is intended to only track domestic production of goods and services), the increase in foreign goods actually supported our economy.
Economic activity in America is heavily dependent upon imports, directly supporting dock workers, the shipping industry that transport imports (trains, trucks, ships, and planes), oil needed for transportation, industrial real estate used to warehouse imports, the majority of our retailers, construction, manufacturing, and even Wall Street, which finances the debt needed to purchase imports by retailers and consumers. Given that Q1 GDP was negative despite the boost in economic activity derived from the increase in imports, the president’s tariffs and foreign retaliatory tariffs that took effect in Q2 foreshadow a consecutive economic decline as both imports and exports are already being severely affected.
Unlike during H1 2022, when most experts denounced a recession due to apparent strength in the labor market, there are numerous industries and thus jobs (noted above) that stand to be directly impacted by the ongoing trade war. Just as retailers front-run tariffs by adding to their inventories, industrial owner-users should consider doing the same with a sale-leaseback before a possible recession drags down business activity and property values.
I N D U S T R I A L N E W S
US Economy Shrinks In First Quarter
As Tariffs Unleash Flood Of Imports
Reuters – April 30, 2025
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Longshore Union Blasts Trump Tariffs,
Warns Of Massive Job Losses
FreightWaves – April 28, 2025
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Port Of Los Angeles Says Shipping Volume Will
Plummet 35% Next Week As China Tariffs Start To Bite
CNBC – April 29, 2025
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Trump Says He’s Talked With Xi About Tariffs.
China Has Denied Talks Are Taking Place
CBS News – April 25, 2025
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US Farmers In ‘Full-Blown Crisis’ As Chinese Orders
For Pork, Soybeans Plunge Over Trump Tariffs
New York Post – April 28, 2025
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R E G I O N A L N E W S
Northern Builders to Develop Industrial Facility In Plainfield
Connect CRE – April 22, 2025
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Clear Height Properties, Harbert US Real Estate Acquire
82,692-Square-Foot Industrial Property In Elmhurst
REjournals – April 15, 2025
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Cotton Commercial USA Signs 124,000 SF
Industrial Lease In Brookshire, Texas
REBusiness – April 17, 2025
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This Week’s Denver Deal Sheet: Off-Market
Northern Colorado Industrial Trade Tops $19M
Bisnow – April 30, 2025
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500 KSF Industrial Lease Signed Near Houston Port
Commercial Property Executive – May 1, 2025
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