Middle Market Digest: This Week in the South and Mountain Regions

Precarious footing in Europe and Asia is causing currents throughout the international community. Adding in the Brexit kerfuffle, and the uncertainty that always accompanies US elections, gives an air of unrest in the global markets. In our back yard, a topsy-turvy stock market earlier this year and the will they/won’t they uncertainty of interest rates, along with oil-related woes are having an impact on US commercial real estate. The implications touch most of the sectors, with the office vacancy rate declining from the second to the third quarter in all major regions of the country, says Cushman & Wakefield. There were large increases in vacancy during the quarter in Tulsa (+130 bps) and Houston (+110 bps) as the softness of the oil sector continued to weigh on energy-centric markets, according to the C&W report. In industrial, the news of Hanjin Shipping Company filing for bankruptcy last month set off shockwaves. Overcapacity in the shipping industry has been a looming concern as shippers have been introducing larger post-Panama ships to fleets. Retail and multifamily seem to be the only sectors that have strong footing due to continued demand, however, what comes up, must come down?—Lisa Brown