Tariffs, Tax Breaks, and the Tug-of-War Over Industrial Real Estate

• Factory reset: Trump’s trade policies are reshaping industrial real estate, creating uncertainty but opening the door for a potential manufacturing-driven revival.

• Eastern bondage: Another Chinese developer has defaulted on its loan obligations, adding more fear that the country has systemic property issues.

• Closing pitcher: Shohei Ohtani’s name was meant to boost a $240 million Hawaii luxury project. Instead, a lawsuit claims his camp derailed it.

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Industrial

Tariffs, Tax Breaks, and the Tug-of-War Over Industrial Real Estate

Trump’s new trade agenda is shaking up the industrial real estate market. With tariffs targeting major U.S. trading partners and the repeal of key green and tech manufacturing incentives, his “Big Beautiful Bill” pivots investment toward domestic production. The shift brings uncertainty for sectors tied to global trade, while hinting at fresh opportunities for American manufacturing.

Vacancy rates are climbing, but some see it as a temporary pause before new leasing momentum builds. Last-mile logistics remains resilient, e-commerce demand continues its steady rise, and developers are eyeing the bill’s generous tax incentives for factory construction and high-tech equipment.

If the effort to bring manufacturing back succeeds, it could spark a revival in export-related logistics, especially in regions that have been hardest hit by globalization. For now, the market remains in flux, balancing short-term pressures with the possibility of a manufacturing-led rebound that could reshape demand across the industrial real estate sector.

Focus: Industrial

Overheard

Road King To Become First Hong Kong Developer To Default on Bond As Pressure Mounts

Road King Infrastructure is poised to become the first Hong Kong–based developer to officially default on a bond since China’s property crisis began in 2021. The company failed to pay an $11.3 million coupon on its 2029 bond when the 30-day grace period expired, placing bondholders in limbo and putting further stress on an already fragile local property market.

The default comes amid rising liquidity pressures, falling sales, and looming debt maturities for Hong Kong developers. Road King, which earns most of its revenue from mainland China, had already proposed a restructuring but these proposals failed to gain bondholder approval. Other prominent players like New World Development are also deferring coupon payments and scrambling to refinance massive loan obligations. The liquidity strain does not seem to be isolated to a few heavily leveraged companies. HSBC recently flagged that 73 percent of its $32 billion Hong Kong commercial property loan book now faces elevated credit risk.

Road King’s default signals a sobering moment. The event underscores deepening sector-wide stress in Hong Kong, where both debt-distressed developers and cautious financiers may drive a flight from riskier assets. Rising defaults could also “normalise” credit losses, prompting more cautious underwriting and wider spreads across Asia real estate debt. The bond defaults have already triggered cross-border risk reassessment. China’s property crisis—including defaults from Evergrande to South City—continues reverberating globally. If Hong Kong developers increasingly falter, capital flows could shift toward more stable markets.

Celebrity Name Game Turns Sour in Hawaii Real Estate Fight

Shohei Ohtani’s name was supposed to be the selling point for a $240 million luxury housing development on Hawaii’s Big Island. Instead, it’s now part of the reason for a lawsuit. Court filings claim that Ohtani’s agent, Nez Balelo, strong-armed the project’s partners into cutting ties with the broker and developer who brought him in, using “threats and baseless legal claims” to reshape the deal in his client’s favor. The alleged power play, according to the complaint, torpedoed contracts and left millions in commissions unpaid.

Bringing a celebrity into a real estate project shoudl be a marketer's dream. One splashy photo in a glossy magazine, and the phone starts ringing. But fame changes the power dynamics and heightens the stakes. Katy Perry’s drawn-out legal fight over a Montecito estate showed how quickly those dynamics can spill into court when expectations, contracts, or egos collide. High-profile names attract attention, but they also raise the stakes when things get messy.

The Ohtani saga is a reminder that celebrity cachet doesn’t replace a solid deal structure. The more famous the face, the more important the paper behind the partnership. Clear governance and airtight dispute-resolution clauses are necessary guardrails to keep high-profile backers from blowing up a project.

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