The ongoing return to U.S. manufacturing jobs will continue to drive industrial real estate development, according to a new report. NAIOP Research Foundationin cooperation with Newmark.
Forging the Future: Manufacturing Growth and Its On North American Industrial Markets, written by Lisa DeNight, Managing Director of National Industrial Research at Newmark, and Liz Berthelette, CRE, Director of Northeast Research and National Life Sciences Research predicts that as manufacturing growth gains momentum: Reshoring could increase the size of the U.S. manufacturing footprint by more than 10 percent (estimated at 6-13 percent) over 10 years.
DeKnight commented in a prepared statement that the existing statistically tracked manufacturing inventory in the United States is less than 5 billion square feet. Market expansion could represent more than 10 percent (500 million square feet) of its total stock over the next 10 years alone, she said, adding that this unprecedented surge in project announcements in recent years has led to global Incentives in industrial markets, it added, highlighting the significant impact of risk considerations and domestic manufacturing.
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Bertolette said the confluence of the CHIPS Act, the Inflation Control Act, and the Infrastructure Investment and Jobs Act represents an amount of federal spending aimed at promoting industrial development that is almost unparalleled in modern U.S. history. He said that it is appropriate to consider this as a watershed. For the sector.
Intertwined with these federal efforts, totaling well over $400 billion, are major changes in global manufacturing patterns, the report says. Of course, supply chain disruptions due to the coronavirus are a big factor, as are tensions between the U.S. and China and the federal government's focus on specific industries such as semiconductors, biomanufacturing, electrification, and green energy. The same is true.
The scale of this trend is undeniable. The new report references a September study by Newmark that documented the announcements of more than 300 major manufacturing facilities across the country since 2020. These represent a projected project investment of approximately $400 billion, with at least 210,000 new jobs proposed.
deep and wide
And just as some industrial sectors benefit more than others, some regions of the United States are also expected to see demand and growth in industrial real estate. Although construction of new manufacturing facilities has been announced in every state in the U.S., the report says investment is concentrated in the Midwest and Southeast, with most new construction coming from areas with affordable energy and adequate supplies. is expected to be built in a secondary or tertiary market location that can provide skilled workers.
Another trend that NAIOP and Newmark are seeing is that while most new manufacturing construction will be build-to-suit or owner-built, there is also demand for speculative manufacturing space, including logistics real estate and other types. There is also demand for commercial space. A community around a new plant.
Finally, some of the trends driving domestic shoring in the United States are also encouraging nearshoring of manufacturing, primarily to Mexico and Canada. “This investment will create demand for logistics and complementary manufacturing facilities along the U.S.-Mexico border, driving down vacancy rates and spurring new construction near major border crossings such as Laredo, Texas. ”, the report states.
