Nearly 600 Colliers professionals and clients attended the National Industrial Conference in Austin on October 6-7. Here are 10 takeaways and observations surrounding capital markets.

1. Prologis closed on its acquisition of Duke Realty earlier in the week. Prologis doesn’t use much debt, so despite a credit market upheaval, this transaction was able to go through.
2. Lenders are focused on primary markets, suggesting liquidity challenges will be more pronounced in secondary and tertiary markets. However, local and regional banks have stepped up their lending.
3. Tenant credit – and risk – matter again. While the markets have been liquid as of late, buyers were willing to look past marginal credit.
4. It is hard to reconcile the strength of market fundamentals with the challenges investors have with transacting. This disconnect is not normal.
5. Investors need to consider “real” returns, taking inflation into account. Market participants are looking for positive news on the inflation front, not just a data point but a trend.
6. Buyers’ profiles have changed. What was, most recently, an institutionally dominated market is now a private/exchange buyer-driven market.
7. Opportunity lies in the best infill locations. The durability of a site and being as close to consumption as possible were top priorities for investors.
8. Panelists questioned whether fear of an economic slowdown or recession would drive rent down. One speaker noted a 15% reduction in rent was equal to a 75 basis point increase in cap rates.
9. Investors used to be comfortable with negative leverage if the mark-to-market event happened during their hold period. Today that has narrowed to two, possibly three years.
10. Overheard during networking: deals are falling through, and this seemed to ramp up in the first week of October.