TAG Industrial Watch: August 3, 2024
As we continue to dig through the industrial market’s performance in the second quarter, we head to the Midwest. Despite an 80% reduction in net absorption year-over-year, Chicago continues to enjoy a below-average vacancy rate of 5.5%. At 3.2%, the availability of small industrial spaces sits more than half below that of big-box warehouses at 7.1%. While the deceleration increased, annual rent growth across the Windy City kept its lead on the Consumer Price Index at 5.4%.
As Chicago’s neighbor to the East, the Northwest Indiana market experienced an even lower vacancy rate of 4.2%, thanks to a big rebound in demand and the demolition of the 2-million-square foot Cleveland-Cliffs steel mill in East Chicago. Although small industrial demand dipped into negative territory, at 2.6% the vacancy rate was well below big-box at 6.9%, which was heavily aided by the demolition. Unfortunately, below-market vacancies did not prevent rent growth across Northwest Indiana from slipping to its pre-pandemic trend of 4.1%.
Rounding out TAG’s Midwest territory are Kansas City and Saint Louis, which combined for a vacancy rate of 5.2% after net absorption bounced back into positive territory and topped last year’s Q2 total by 6.0%. Demand for small industrial spaces continued to contract but vacancies only crept toward 3.2% versus big-box at 7.2%. Rent growth between the two metros slowed to 4.0% but managed to stay above pre-pandemic levels. Next week, we finish our Q2 reports by traveling West to Denver and Los Angeles!
I N D U S T R I A L N E W S
Fed Chair Powell Says September Interest Rate
Cut Could Be ‘On The Table’ As Inflation Cools
AP News – July 31, 2024
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Private Payroll Growth Slowed To 122,000
In July, Less Than Expected, ADP Says
CNBC – July 31, 2024
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Property Taxes Put The Squeeze On Industrial
GlobeSt.com – June 27, 2024
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Is The Multistory Industrial Niche Taking Off?
Commercial Property Executive – July 22, 2024
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Treasury Estimates $1.3 Trillion In Borrowing
Needs For The Remainder Of 2024
ZeroHedge – July 29, 2024
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R E G I O N A L N E W S
Investcorp Sells 640 KSF Chicago Industrial Portfolio
Commercial Property Executive – July 22, 2024
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Industrial Leases On The Rise In Chicago
The Real Deal – July 26, 2024
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6.4 MSF Kansas City Industrial Portfolio Lands $244M Refi
Commercial Property Executive – July 19, 2024
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Hines Picks Up Houston Industrial Asset
As Part Of Portfolio Acquisition
Connect CRE – June 16, 2024
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Fortress Closes First-Of-Its-Kind $500M
Industrial Outdoor Storage Deal
Bisnow – June 21, 2024
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