TAG Industrial Watch: May 10, 2025

Thanks to retailers front-loading tariffs by stocking up on their inventories, the biggest contributor to the recent GDP report was business investment. This was not only good for overall economic activity in the U.S. (as explained last week), but specifically industrial real estate. During Q1, 40.4 million square feet of industrial space were absorbed on net, up 148% year-over-year. As you might expect, 90% of that demand was concentrated in big-box distribution and logistics warehouses over 200,000 square feet. While quarterly demand for small industrial space has been in contraction mode for over two years and mid-size demand has tread water recently, the net demand for industrial space has largely been credited to big-box space.

However, with the tariffs and retaliatory tariffs in place, America’s exports and imports are already taking a hit. Consequently, so is the demand for big-box warehouse space. For the first time since the days of the Great Recession, national industrial demand may contract in Q2 as net absorption for all property sizes fell into negative territory in the month of April. While the sentiment remains positive, the actual impact of the president’s trade war on industrial real estate tells a different story. Given that industrial property values are still near record highs, this creates a great selling opportunity for landlords who take a proactive approach versus a reactive approach. Instead of waiting for the investment community to realize the true impact of the tariffs on the industrial market, landlords may consider selling before sentiment changes.
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I N D U S T R I A L   N E W S

Trump Trade Tariffs Slump Widens
To ‘Nearly All U.S. Exports,’ Supply Chain Data Shows
CNBC – May 6, 2025
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Logistics Sector In Flux Amid Economic Uncertainty
GlobeSt.com – May 7, 2025
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How Tariffs Are Reshaping The Industrial Investment Landscape
And Where Opportunity Lies For Institutional Capital
REjournals – May 8, 2025
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Walmart Opens Channel For Battered Chinese Exporters
To “Quickly Expand” In Domestic Market
ZeroHedge – April 25, 2025
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China Adds More Gold To Its Coffers For Sixth Straight Month
Business Day – May 7, 2025
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R E G I O N A L   N E W S

HCB Realty Partners Facilitates Light Industrial Purchases
Connect CRE – April 17, 2025
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Transwestern Report: Don’t Expect Tariffs
To Throw Chicago Industrial Sector Into Chaos
REjournals – May 7, 2025
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Panattoni Breaks Ground On 430,141 SF
Lincolnshire Industrial Center In Suburban Chicago
REBusiness – April 30, 2025
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Trump’s Tariffs Could Offer Chicago’s Industrial Market
A Reshoring Edge
Bisnow – May 7, 2025
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Morgan Stanley Pays $343M for 1.3 MSF National Portfolio
Commercial Property Executive – May 5, 2025
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