TAG Industrial Watch: August 17, 2024

At 8.6%, the vacancy rate among big-box warehouses is now more than twice that of small industrial properties at 4.1% and growing (CoStar). Since the beginning of the year, this historical divergence between big-box and small industrial (which TAG was perhaps the first to observe) has been making headlines and now institutional investors are starting to take advantage of this new opportunity. For example, one of Los Angeles’ largest industrial REITS, Rexford Industrial Realty, is gaining a competitive advantage by growing its portfolio of small industrial properties averaging just 26,000 square feet with only a 2.7% vacancy rate. The limited availability of these properties has allowed Rexford to increase rents by 4% in a market where asking rents are actually declining (CRE Daily). Historically, small industrial investments have been dominated by local investors. However, the entrance of REITS like Rexford could soon change the landscape, creating an opportunity for local investors to flip their properties to large institutional investors seeking a safe from skyrocketing big-box vacancies.

I N D U S T R I A L   N E W S

Rexford Navigates Industrial Market
Slump With Smaller Warehouses
CRE Daily – July 25, 2024
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Industrial Demand Nears Turning Point
GlobeSt.com – August 13, 2024
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Top 5 Markets For Industrial Deliveries
Commercial Property Executive – August 13, 2024
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US Store Closings Outstrip Openings
In Break From Past Two Years
CoStar – August 13, 2024
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Inflation Rate Falls To 2.9% In July, Adding To
Signs That Surging Prices Have Abated
NBC News – August 14, 2024
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R E G I O N A L   N E W S

KKR Spends $234M On Houston Industrial Park
Connect CRE – June 15, 2024
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Capital Development Completes 800 KSF Houston Facility
Commercial Property Executive – July 17, 2024
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KKR Buys Houston Industrial Park For $234M
GlobeSt.com – July 16, 2024
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DICK’S Sporting Goods Plans New 800K-Square-
Foot Distribution Center In Fort Worth
Supply Chain Brain – August 13, 2024
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Denver Records 13th Largest Industrial
Inventory Under Construction
Mile High CRE – August 12, 2024
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