Industrial real-estate executives expect only limited fallout from the turmoil that has engulfed the U.S. banking sector, even as warehouse developers grapple with the rising interest rates and weakening demand that are dampening construction following a period of historic growth.
“The availability of credit might likely be diminished in the short term as banks will begin to be more stringent on underwriting,” said Craig Meyer, president of industrial for the Americas at real-estate services firm JLL. He said he expects new projects this year will “be down as a result of some of these couple of financial issues, the increasing cost of capital and then the availability of capital.”
The failures of Silicon Valley Bank and Signature Bank earlier this month set off fears that customers would pull deposits from U.S. regional banks. Many small and regional lenders are also under pressure as a record amount of commercial mortgages are set to expire this year. Smaller banks hold about $2.3 trillion in commercial real-estate debt, according to an analysis by data firm Trepp Inc.
