TAG Industrial Watch: January 7, 2023

Just a year ago, the general consensus was that industrial real estate would go undersupplied for years to come. Yet this perception took a 180-degree turn when new deliveries surprisingly outpaced absorption in the third quarter of last year. Unfortunately, Q3 was probably just the start of a new trend as new supply outpaced demand again in Q4. With 83% of the nearly 700 million square feet of industrial space currently under construction deemed as speculative builds, vacancies could noticeably pick up in 2023 if demand continues to wane (Globe St.).

However, given that most of the new construction is concentrated in big box warehouses, small industrial properties are starting to diverge on their own course. Unlike the overall market, demand for industrial properties under 50,000 square feet continued to surpass new supply during the last two quarters of 2022. While new deliveries may likely surpass demand among small industrial this year, speculative builds in this product type pale in comparison to big box, giving the small guys the upper hand.

I N D U S T R I A L   N E W S

Industrial Supply Outpaced Demand Again In Q4
Globe St. – January 6, 2023
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Industrial Project Completions and Easing
Demand Drive Up Vacancy Rate
CoStar – January 4, 2023
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Automakers are Cautiously Optimistic for a 2023 Rebound
After Worst New Vehicle Sales in More Than a Decade
CNBC – January 6, 2023
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Pullback on Construction Lending Likely to Cut
Back Industrial Pipeline in 2023
WealthManagement.com – December 22, 2022
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Industrial Vacancies Drop, Rents Increase
Despite Record New Supply
Connect CRE – December 29, 2022
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R E G I O N A L   N E W S

Solid End to the Year: Chicago a Top Market for
New Construction and Sales Volume
REJournals – January 3, 2023
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Clear Height Properties, Harbert JV Buys Chicago
Industrial Portfolio for $100M
Globe St. – December 27, 2022
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MAG Capital Partners Acquires 216,000 SF Kansas
Industrial Property in Sale-Leaseback
REBusiness Online – January 4, 2023
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Clear Height Beefs Up Chicagoland Industrial
Holdings for $100M
The Real Deal – December 28, 2022
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Central Denver Office Warehouse Sells for
First Time in 50 Years
Mile High CRE – December 14, 2022
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