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The spread between the prime rate and industrial cap rates has turned negative, a historical marker of an approaching recession. A new report from NAI Capital shows that these spreads are just beginning to turn negative. The last time this happened was in 2005, and the spreads stayed negative until mid 2008. The spreads also turned negative in 2000, before the Dot Com Bust of 2001, and in 1989 before the 1990 recession.

“Historically, we are due for a downturn. Now, more and more or the signals are starting to point toward a downturn of some kind, but how drastic it is going to be and how sharp it is going to be is anyone’s guess,” Brent Avis of NAI Capital’s investment services group, tells GlobeSt.com. “I don’t think that there is anyone that is educated in finance globally, nationally or hyper locally that doesn’t see something coming.”

Kelsi Maree Borland

Kelsi Maree Borland is a freelance writer and editor living in Los Angeles whose work has appeared in such publications as Travel + Leisure, Angeleno and Los Angeles Magazine.

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