TAG Industrial Watch: June 3, 2023

Since the reopening of the economy, industrial outdoor storage space (IOS) has perhaps been the best-performing asset class in the industrial real estate market. Just three years ago, IOS properties rarely even traded, but today, real estate investment firms such as Alterra Property Group are making a $2.5 billion bet on the niche industry (Commercial Property Executive). Meanwhile, the driving force behind IOS’s recent surge in popularity is starting to show some concerning signs. Flushed with stimulus checks, Americans went on a global shopping spree starting in 2021 and as business inventories soared along with imports, IOS space became a hot commodity.

But a weakening economy is taking a toll on business inventories and thus imports. Since last summer, manufacturers and wholesalers have scaled back on their inventory buildup, which weighed down economic activity (GDP) during the first quarter of the year (CoStar). Consequently, total imports are down 5.2% during the first four months of 2023 compared to the same period in 2022 (U.S. Census Bureau). IOS properties are still performing well, but the signs of concern are starting to show up in the form of slowing rent growth (Commercial Property Executive). While investment demand remains robust, IOS owners still have a good opportunity to take advantage of historic levels of equity.

I N D U S T R I A L   N E W S

Industrial Outdoor Storage’s Growth Spurt Continues
Commercial Property Executive – May 23, 2023
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Stockpile Levels Signal Near-Term Risk For Industrial Space Demand
CoStar – May 26, 2023
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Companies Scale Back Their Logistics Ambitions Amid Industrial Slowdown
Bisnow – May 26, 2023
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Industrials, SFR Lead A Mostly Down Week For REITS
Globe St. – June 1, 2023
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Senate Passes Bill To Raise Debt Ceiling, Preventing First-Ever U.S. Default
CNBC – June 1, 2023
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R E G I O N A L   N E W S

Wilmer Home To New 1.5M SF Industrial Project
Connect CRE – May 26, 2023
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Industrial Flex Business Parks Booming In Chicago And Midwest
REJournals – May 24, 2023
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Slowing Down, But Not Stopping: Bisnow’s Denver Industrial Update
Bisnow – May 24, 2023
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Expansion Of Iowa’s Industrial Sector Drives Job Gains In Des Moines
CoStar – May 18, 2023
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Amazon Pulls Back From Planned Bridgeport Warehouse
Previously Opposed By Community Groups
Yahoo! News – May 23, 2023
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