Navigating the Debasement Trade: Is Commercial Real Estate included?

Debasement Dynamics and CRE’s Role

Currency debasement can challenge fixed-income assets, but for CRE, it may create avenues for adjustment through rising rents and property values that align with inflation. In industrial markets, leases typically include annual rent escalations, helping to maintain real returns over time. Recent data shows national industrial asking rents growing at a steady 2.6% annually as of Q2 2025, a deceleration from prior years but still indicative of underlying resilience. Vacancy rates, meanwhile, are projected to hover around 7.0% by year-end, reflecting a market where demand, though tempered, continues to support absorption.

This environment isn’t without hurdles—elevated construction costs and selective leasing activity require careful navigation. Yet, for investors viewing CRE through the lens of the debasement trade, the industrial sector presents a chance to focus on a sector with enduring utility.

The Case for Industrial CRE

Industrial real estate stands out in the debasement context for its essential role in logistics and distribution, potentially making it less sensitive to economic swings. With leasing activity up 4.2% year-over-year (as of Q2 2025), driven by third-party logistics providers, the sector shows signs of adaptability. National vacancy has edged up to 9.3%—the highest in over a decade—largely due to new supply deliveries, but the vast majority of these deliveries are in large, bulk warehouse facilities. Elevated construction costs have made it extremely difficult for developers to build multi-tenant, small bay facilities in primary and secondary markets.

In secondary markets, where growth is often more promising, industrial properties could offer a compelling mix of entry points and income potential. Rent escalations in these areas, tied to market conditions, may provide a subtle hedge, allowing owners to adapt as costs evolve. Whether this translates to stronger performance will depend on broader trends, but the sector’s track record invites further exploration for those aligned with the debasement narrative.

Excelsior Capital: A Measured Approach to Industrial Opportunities

Excelsior Capital exemplifies a thoughtful entry into this space, with a strategy centered on small bay industrial as well as industrial outdoor storage assets in high-growth primary and secondary markets. By targeting high growth locales—such as Nashville, Charlotte, and Atlanta—the firm seeks properties with clear value-add avenues such as under-market rental rates, vacancy, and operational tweaks. This approach aims to build resilience by acquiring properties at a healthy basis, which minimizes potential downside and allows property values to grow at rates potentially faster than the overall market.

As Excelsior notes, “We’ve long recognized the value in acquiring and optimizing industrial assets in high-growth, undercapitalized secondary markets.” Their focus on markets with proven demand dynamics could position investments to benefit from gradual rent uplifts and lower cap rate risks, offering a pathway for institutional and individual investors alike. In a debasement scenario, this selective lens—prioritizing assets with inflation-responsive features—might appeal to those weighing long-term preservation over short-term speculation.

Of course, outcomes will vary based on execution and market shifts, but Excelsior’s model suggests secondary industrial plays could serve as a steadying force amid uncertainty.

Looking Forward: Considerations for the Debasement Era

As 2025 progresses, gold and crypto have stolen headlines regarding the debasement trade, but could CRE be an alternative due to its blend of utility and adaptability? With rent growth holding steady and vacancies manageable, opportunities exist for strategies like Excelsior’s to deliver measured returns while protecting against long term inflation. Ultimately, how these trends unfold leaves room for interpretation—perhaps a quiet strength in a volatile world, or simply one piece of a broader puzzle.

For those intrigued, exploring Excelsior Capital’s insights could provide a starting point. Explore our site to learn more about our perspective on real estate investing.

As always, investment decisions should align with individual circumstances and investment criteria.