Top 5 Markets for Industrial Construction in the South
These cities account for more than 80 percent of the region’s development activity, CommercialEdge data shows.
The Southern U.S. is a hotbed for industrial construction, with several markets standing out for their growing economies. According to CommercialEdge data, a total of 31.3 million square feet of industrial space was underway in the region as of April, accounting for 3.2 percent of total stock. Whether it’s logistics and distribution, manufacturing or petrochemicals, industrial construction activity is booming in a handful of markets. These locales offer opportunities for developers to capitalize on their strong economies and growing populations.
The table below utilizes CommercialEdge data to highlight the top five markets for industrial construction activity across the Southern region, listed as Arkansas, Alabama, Kentucky, Louisiana, Mississippi and Tennessee. Some 25.4 million square feet of industrial space was underway in these markets, accounting for 81.2 percent of the region’s active pipeline as of April.
1. Louisville, Ky.
The largest metro in Kentucky is a prime area for industrial construction due to its central location, robust transportation network and thriving logistics and distribution industry. Louisville is also home to the UPS Worldport—the largest automated package handling facility in the world, as well as to several major manufacturers, including Ford and General Electric. A total of 10.5 million square feet of industrial space was under construction in the metro in April, accounting for 8.9 percent of total stock, CommercialEdge data shows.
A little over 704,000 square feet of industrial space came online in the market year-to-date in 2023. Meanwhile, the largest industrial property under construction was BlueOval SK Battery Plant, a 4 million-square-foot project developed by Ford Motor Co. The asset is taking shape at 1 BlueOval in Glendale, Ky., and will consist of twin battery plants that will power new Ford and Lincoln electric vehicles.
2. Baton Rouge, La.
Second on our list, Baton Rouge’s industrial success can be attributed to its location along the Mississippi River and proximity to major shipping channels. The market also houses several major petrochemical companies such as ExxonMobil and Dow Chemical, which drive the local economy and industrial construction to new heights. More than 3.9 million square feet of industrial space was underway in the market as of April, representing a staggering 26.4 percent of the total industrial stock.
According to CommercialEdge, the largest industrial project underway was 9001 Cortana Place, a 3.8 million-square-foot robotic and fulfillment center developed by Amazon. The property is scheduled for completion this fall and is being built on what was once Baton Rouge’s premier shopping destination, Cortana Mall.
3. Nashville, Tenn.
Nashville is a growing market for industrial construction due to its location along major transportation routes—interstates 65 and 40—but also thanks to its workforce and business-friendly environment. Developers kept active in the metro, resulting in 3.9 million square feet of industrial space under construction as of April, or 1.9 percent of total stock. Another 1.6 million square feet was added to the market’s total inventory year-to-date in April.
In Gallatin, Tenn., Meta is currently working on its Gallatin Data Center campus, a four-building, $1 billion project encompassing nearly 1.7 million square feet of space. The LEED Gold-certified facility, located on more than 900 acres, represents the 13th Meta data center to be built in Tennessee and will be entirely supported by renewable energy, using 80 percent less water than a typical data center.
4. Memphis, Tenn.
Memphis is home to one of the busiest cargo airports in the world, the Memphis International Airport, which is also a hub for FedEx. This, coupled with a skilled workforce in logistics, manufacturing and distribution, as well as land availability, have led to an increase in industrial construction. Some 3.6 million square feet of industrial space was under construction in the market as of April. That accounts for 1.3 percent of total stock. Industrial deliveries year-to-date in April amounted to 3.1 million square feet.
Homegrown company H&M Co. is currently working on a 1.2 million-square-foot facility in Byhalia, Miss. Situated at the junction of SWC Wingo Road with Cayce Road, the property sits within the 450-acre Interstate 269 Industrial Park, which is home to national brands such as Asics, Nike, Amazon and Adidas.
5. Little Rock, Ark.
Little Rock’s strong and diverse infrastructure makes it easier for businesses to establish operations quickly and efficiently in the area. The market also boasts a large amount of available land for industrial development, including greenfield sites and brownfield sites that are ready for redevelopment. As a result, close to 3.5 million square feet of industrial space was underway in the market as of April, or 6.6 percent of total stock.
A 1.3 million-square-foot logistics center developed by Tractor Supply Co. at 150 Champs Blvd. in Maumelle, Ark., was the largest project under construction as of April. Construction on Tractor Supply Distribution Center began last August, while delivery is anticipated for the end of the year.
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