{"id":1004653579,"date":"2023-03-30T12:12:23","date_gmt":"2023-03-30T20:12:23","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004653579"},"modified":"2023-04-14T04:00:53","modified_gmt":"2023-04-14T12:00:53","slug":"manufacturings-comeback-boosts-industrial-space-demand","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/manufacturings-comeback-boosts-industrial-space-demand\/","title":{"rendered":"Manufacturing&#8217;s Comeback Boosts Industrial Space Demand"},"content":{"rendered":"\n<div class=\"wp-block-jetpack-slideshow aligncenter\" data-effect=\"slide\"><div class=\"wp-block-jetpack-slideshow_container swiper-container\"><ul class=\"wp-block-jetpack-slideshow_swiper-wrapper swiper-wrapper\"><li class=\"wp-block-jetpack-slideshow_slide swiper-slide\"><figure><img loading=\"lazy\" decoding=\"async\" width=\"1200\" height=\"750\" alt=\"\" class=\"wp-block-jetpack-slideshow_image wp-image-1004653606\" data-id=\"1004653606\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-4.jpg?w=1024\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-4.jpg 1200w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-4.jpg?resize=300,188 300w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-4.jpg?resize=768,480 768w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-4.jpg?resize=1024,640 1024w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><figcaption class=\"wp-block-jetpack-slideshow_caption gallery-caption\">Rendering shows plans for two new leading-edge Intel processor factories in Licking County, Ohio. Announced in January 2022, the $20 billion project spans nearly 1,000 acres and is the largest single private-sector investment in Ohio history. Production may begin as soon as 2025. All images courtesy of Intel Corporation<\/figcaption><\/figure><\/li><li class=\"wp-block-jetpack-slideshow_slide swiper-slide\"><figure><img loading=\"lazy\" decoding=\"async\" width=\"1200\" height=\"750\" alt=\"\" class=\"wp-block-jetpack-slideshow_image wp-image-1004653602\" data-id=\"1004653602\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-1.jpg?w=1024\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-1.jpg 1200w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-1.jpg?resize=300,188 300w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-1.jpg?resize=768,480 768w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-1.jpg?resize=1024,640 1024w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/figure><\/li><li class=\"wp-block-jetpack-slideshow_slide swiper-slide\"><figure><img loading=\"lazy\" decoding=\"async\" width=\"1200\" height=\"750\" alt=\"\" class=\"wp-block-jetpack-slideshow_image wp-image-1004653604\" data-id=\"1004653604\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-2.jpg?w=1024\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-2.jpg 1200w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-2.jpg?resize=300,188 300w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-2.jpg?resize=768,480 768w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-2.jpg?resize=1024,640 1024w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/figure><\/li><li class=\"wp-block-jetpack-slideshow_slide swiper-slide\"><figure><img loading=\"lazy\" decoding=\"async\" width=\"1200\" height=\"750\" alt=\"\" class=\"wp-block-jetpack-slideshow_image wp-image-1004653605\" data-id=\"1004653605\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-3.jpg?w=1024\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-3.jpg 1200w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-3.jpg?resize=300,188 300w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-3.jpg?resize=768,480 768w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-3.jpg?resize=1024,640 1024w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/figure><\/li><li class=\"wp-block-jetpack-slideshow_slide swiper-slide\"><figure><img loading=\"lazy\" decoding=\"async\" width=\"1200\" height=\"750\" alt=\"\" class=\"wp-block-jetpack-slideshow_image wp-image-1004653607\" data-id=\"1004653607\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-5.jpg?w=1024\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-5.jpg 1200w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-5.jpg?resize=300,188 300w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-5.jpg?resize=768,480 768w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-5.jpg?resize=1024,640 1024w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/figure><\/li><li class=\"wp-block-jetpack-slideshow_slide swiper-slide\"><figure><img loading=\"lazy\" decoding=\"async\" width=\"1200\" height=\"750\" alt=\"\" class=\"wp-block-jetpack-slideshow_image wp-image-1004653608\" data-id=\"1004653608\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-6.jpg?w=1024\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-6.jpg 1200w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-6.jpg?resize=300,188 300w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-6.jpg?resize=768,480 768w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-6.jpg?resize=1024,640 1024w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/figure><\/li><li class=\"wp-block-jetpack-slideshow_slide swiper-slide\"><figure><img loading=\"lazy\" decoding=\"async\" width=\"1200\" height=\"750\" alt=\"\" class=\"wp-block-jetpack-slideshow_image wp-image-1004653610\" data-id=\"1004653610\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-7.jpg?w=1024\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-7.jpg 1200w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-7.jpg?resize=300,188 300w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-7.jpg?resize=768,480 768w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-7.jpg?resize=1024,640 1024w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/figure><\/li><li class=\"wp-block-jetpack-slideshow_slide swiper-slide\"><figure><img loading=\"lazy\" decoding=\"async\" width=\"1200\" height=\"750\" alt=\"\" class=\"wp-block-jetpack-slideshow_image wp-image-1004653611\" data-id=\"1004653611\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-8.jpg?w=1024\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-8.jpg 1200w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-8.jpg?resize=300,188 300w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-8.jpg?resize=768,480 768w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-8.jpg?resize=1024,640 1024w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/figure><\/li><\/ul><a class=\"wp-block-jetpack-slideshow_button-prev swiper-button-prev swiper-button-white\" role=\"button\"><\/a><a class=\"wp-block-jetpack-slideshow_button-next swiper-button-next swiper-button-white\" role=\"button\"><\/a><a aria-label=\"Pause Slideshow\" class=\"wp-block-jetpack-slideshow_button-pause\" role=\"button\"><\/a><div class=\"wp-block-jetpack-slideshow_pagination swiper-pagination swiper-pagination-white\"><\/div><\/div><\/div>\n\n\n<p>For years, manufacturing companies have moved their production centers overseas to reduce labor and land costs and benefit shareholders. But the tide has shifted, and manufacturing is returning to North America on a large scale.<\/p>\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link has-white-color has-text-color has-background wp-element-button\" href=\"https:\/\/mydigitalpublication.com\/publication\/?i=787859\" style=\"background-color:#00aeab\" target=\"_blank\" rel=\"noreferrer noopener\">READ THE DIGEST<\/a><\/div>\n<\/div>\n\n\n<p>\u201cWe have seen the manufacturing sector respond to supply-chain disruptions for reasons ranging from the fallout of COVID-19 to the lack of availability of semiconductor chips,\u201d Rene Velasquez, senior managing director of asset and property management at <strong>BKM Capital Partners,<\/strong> told <em>Commercial Property Executive<\/em>. \u201cThis shift has occurred rapidly, reflected by the fact that 13 new electric vehicle battery plants were announced in 2021 and are expected to be operational within the next five years,\u201d Velasquez said. According to <a href=\"https:\/\/www2.deloitte.com\/us\/en\/insights\/focus\/transportation\/future-of-transport-industry.html\" target=\"_blank\" rel=\"noopener\">a report by Deloitte<\/a>, transportation companies anticipate that 20 percent of freight originations from Asia will relocate to closer-proximity markets by 2025.<\/p>\n<p>Pandemic lockdowns in China led to a global chip shortage and shone a bright light on U.S. dependence on Chinese chipmakers, Valesquez noted. \u201cThis dependence has created a massive trickle-down effect since semiconductor chips are used in everything from computers and smartphones to cars, microwaves and health-care devices.\u201d Delivery time lagged and transportation costs soared; the cost of shipping a container from China to the U.S. <a href=\"https:\/\/www.commercialsearch.com\/news\/how-the-supply-chain-crisis-impacts-industrial-real-estate\/\">rose some 200 percent<\/a> during the pandemic.<\/p>\n<h2>The new globalization<\/h2>\n<p>While onshoring to the states long seemed to be an expensive and cumbersome task, the idea became a necessary step for many manufacturers. \u201cThe combination of various conditions for this movement (reshoring) to gain a whole new ethos happened very quickly,\u201d Barry LePatner, founder of <strong>LePatner &amp; Associates <\/strong>and a longtime real estate and construction consultant, told <em>Commercial Property Executive<\/em>. \u201cPeople realized that moving production lines closer to the United States, or even Europe, would alleviate the snarls and complexities of the global supply chain.\u201d<\/p>\n<p>The reasons for shortening the distance between manufacturers and customers are numerous. Reshoring creates an increase in local e-commerce, shortens the delivery times for materials and produces thousands of jobs. Numerous manufacturing companies have already announced a shift to onshoring their operations. Last year Intel released plans to build semiconductor chip factories in Ohio and Arizona, Texas Instruments launched a $30 billion project in Texas and Taiwan Semiconductor Manufacturing Co. started two facilities in Arizona. All told, more than 75 companies have announced onshoring plans.<\/p>\n<p>\u201cBased on these announcements, we estimate demand for nearly 500 million square feet of space, including both manufacturing and related supplier networks,\u201d said Matthew Rand, senior vice president of research and analytics at <strong>Link Logistics<\/strong>. He expects electric vehicle and semiconductor manufacturers to lead the resurgence.<\/p>\n<p>\u201cWhile the move for electric vehicles has been driven by the need to produce vehicles close to end users, the move for semiconductors has been driven by more strategic reasons, such as tax incentives and geopolitical tensions that are encouraging companies to produce chips domestically,\u201d Rand said. On a smaller scale, manufacturing of both industrial and consumer is starting to move back to the U.S, he noted.<\/p>\n<div id=\"attachment_1004653617\" style=\"width: 1034px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Texas-Instruments-fab-plant_aerial_Feb2023.jpg\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-1004653617\" data-attachment-id=\"1004653617\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/manufacturings-comeback-boosts-industrial-space-demand\/texas-instruments-fab-plant_aerial_feb2023\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Texas-Instruments-fab-plant_aerial_Feb2023.jpg\" data-orig-size=\"1200,600\" data-comments-opened=\"0\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;1&quot;}\" data-image-title=\"Texas Instruments fab plant_aerial_Feb2023\" data-image-description=\"\" data-image-caption=\"&lt;p&gt;Texas Instruments\u2019 $30 billion facility in&lt;br \/&gt;\nSherman, Texas, is under construction. Image courtesy of Texas Instruments&lt;\/p&gt;\n\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Texas-Instruments-fab-plant_aerial_Feb2023.jpg?w=1024\" class=\"size-full wp-image-1004653617\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Texas-Instruments-fab-plant_aerial_Feb2023.jpg\" alt=\"\" width=\"1024\" height=\"512\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Texas-Instruments-fab-plant_aerial_Feb2023.jpg 1200w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Texas-Instruments-fab-plant_aerial_Feb2023.jpg?resize=300,150 300w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Texas-Instruments-fab-plant_aerial_Feb2023.jpg?resize=768,384 768w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Texas-Instruments-fab-plant_aerial_Feb2023.jpg?resize=1024,512 1024w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><p id=\"caption-attachment-1004653617\" class=\"wp-caption-text\">Texas Instruments\u2019 $30 billion facility in Sherman, Texas, is under construction. <em>Image courtesy of Texas Instruments<\/em><\/p><\/div>\n<h2>Wanted: manufacturing sites<\/h2>\n<p>As more companies re-shore, the opportunities for industrial real estate locations outside of major markets increases. The effects of a national <a href=\"https:\/\/www.commercialsearch.com\/news\/supply-chain-challenges-the-era-of-deglobalization\/\">supply chain turning regional<\/a> could mean that more manufacturing tenants will look for sites adjacent to population centers and in infill locations.<\/p>\n<p>\u201cInfill locations are and will continue to be in high demand as they support a critical component of the modern supply chain: the ability to move product quickly with the shortest delivery times to the consumer,\u201d said Velasquez. Infill locations often benefit from the presence of light industrial facilities as well as the location-optimization requirement, which has increased the value of properties with lower clear heights.<\/p>\n<p>The dramatic increase in onshoring \u201chas led to a significant increase in demand for warehouse and industrial spaces that don\u2019t necessarily have traditional clear heights,\u201d said Lee Brodsky, CEO of <strong>BEB Capital<\/strong>. \u201cCompanies are using these spaces both for manufacturing and storage purposes to help with the onshoring process.\u201d<\/p>\n<p>However, some infill locations are likely to remain difficult to find and expensive to develop, in part because of their appeal for onshoring manufacturers. Therefore, those CRE markets may also see more big-box space development in last-mile urban hubs and alternative markets. \u201cLess than 3 percent of the 500 million square feet of industrial space that will be built this year will be small- or mid-bay product, while the vast majority will be big-box space,\u201d Velasquez noted.<\/p>\n<p>These spaces could be built in a variety of locations, including markets in the Southeast, the Midwest and Texas, which are generally well-suited to future manufacturing demand, according to Rand. \u201cWe continue to see new facilities popping up along the \u2018battery belt,\u2019 which stretches from Michigan down through Kentucky and Tennessee to the Carolinas and Georgia,\u201d he told <em>CPE<\/em>.<\/p>\n<p>Being close to transportation infrastructure to reduce delivery time is critical. Other key elements that play into location decisions include existing manufacturing activity, labor availability, living costs, tax incentives and manufacturing grants, said Rand. \u201cSemiconductor manufacturers are also looking for areas with access to universities with STEM programs and competitive electric rates,\u201d he noted.<\/p>\n<p>Last-mile urban hubs, can offer savings of up to 50 percent of greenhouse gas emissions compared to less densely developed locations, Velasquez explained, and also reduce transportation costs.<\/p>\n<h2>Decision factors<\/h2>\n<p>In addition to location, a huge consideration in site decisions is the availability and cost of power. It was a key factor in BEB Capital\u2019s recent acquisition of 9 Fairfield Blvd., a 32,745-square-foot industrial property in Wallingford, Conn. Because the city has its own electrical grid, energy costs are about one-third lower than for many other sites in Connecticut and the Northeast.<\/p>\n<p>Automation, supply chain management, cloud computing and artificial intelligence technologies do much to alleviate labor shortages and improve efficiency. \u201cThe warehouse automation market is expected to grow by 1.5 times to $37.6 billion by 2025,\u201d Velasquez noted. \u201cAutomation solutions, which are already common in large fulfillment centers (e.g., Amazon, Walmart, Target), are now being customized to accommodate smaller buildings.\u201d Automation also yields savings that offset higher development costs for urban-core facilities, which are closer to customers and generate growing demand for light industrial space.<\/p>\n<p>Automation technologies and modern practices, such as 3D printing, are transforming traditional manufacturing processes and permitting far smaller footprints. Production that once required 500,000 square feet now needs only 10,000 square feet, Velasquez noted.<\/p>\n<p>As less space becomes required by manufacturing tenants, flexibly zoned sites are becoming more popular. Light-industrial properties offer manufacturers the option to locate warehousing and manufacturing and office functions in a single unit. Multi-tenant assets now often also offer enough space.<\/p>\n<div id=\"attachment_1004653621\" style=\"width: 1034px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Texas-Instruments-fab-plant_steel-installation.jpg\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-1004653621\" data-attachment-id=\"1004653621\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/manufacturings-comeback-boosts-industrial-space-demand\/sony-dsc-8\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Texas-Instruments-fab-plant_steel-installation.jpg\" data-orig-size=\"1200,600\" data-comments-opened=\"0\" data-image-meta=\"{&quot;aperture&quot;:&quot;9&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;DSLR-A200&quot;,&quot;caption&quot;:&quot;SONY DSC&quot;,&quot;created_timestamp&quot;:&quot;1167609600&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;26&quot;,&quot;iso&quot;:&quot;100&quot;,&quot;shutter_speed&quot;:&quot;0.002&quot;,&quot;title&quot;:&quot;SONY DSC&quot;,&quot;orientation&quot;:&quot;1&quot;}\" data-image-title=\"Texas Instruments\u2019 $30 billion facility in Sherman, Texas, is under construction. Image courtesy of Texas Instruments\" data-image-description=\"&lt;p&gt;Texas Instruments\u2019 $30 billion facility in&lt;br \/&gt;\nSherman, Texas, is under construction.&lt;br \/&gt;\nImage courtesy of Texas Instruments&lt;\/p&gt;\n\" data-image-caption=\"&lt;p&gt;Texas Instruments\u2019 $30 billion facility in&lt;br \/&gt;\nSherman, Texas, is under construction.&lt;br \/&gt;\nImage courtesy of Texas Instruments&lt;\/p&gt;\n\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Texas-Instruments-fab-plant_steel-installation.jpg?w=1024\" class=\"size-full wp-image-1004653621\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Texas-Instruments-fab-plant_steel-installation.jpg\" alt=\"Texas Instruments\u2019 $30 billion facility in\nSherman, Texas, is under construction.\nImage courtesy of Texas Instruments\" width=\"1024\" height=\"512\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Texas-Instruments-fab-plant_steel-installation.jpg 1200w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Texas-Instruments-fab-plant_steel-installation.jpg?resize=300,150 300w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Texas-Instruments-fab-plant_steel-installation.jpg?resize=768,384 768w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Texas-Instruments-fab-plant_steel-installation.jpg?resize=1024,512 1024w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><p id=\"caption-attachment-1004653621\" class=\"wp-caption-text\">Texas Instruments\u2019 $30 billion facility in Sherman, Texas, is under construction. <em>Image courtesy of Texas Instruments<\/em><\/p><\/div>\n<h2>Ripple effects<\/h2>\n<p>Increased demand for manufacturing space, no matter the location or size of the facility, directly correlates to more demand for other kinds of space. Industrial and CRE companies alike will need more room to deliver equipment, building materials or other needs of manufacturers, LePatner told <em>CPE<\/em>. Also in the mix are office, retail and other commercial property types that support manufacturers and their workers.<\/p>\n<p>\u201cWe anticipate that supplying and supporting (the manufacturing support network) and other new manufacturing plants will drive greater demand for mining, manufacturing, warehousing and distribution space, which is often composed of vendors found within the multi-tenant light industrial space,\u201d said Velasquez.<\/p>\n<p>That demand, partially brought about by reshoring, is pushing industrial vacancy down and prices up. Industrial rents are up 6.3 percent nationally year-over-year, according to a recent <a href=\"https:\/\/www.commercialedge.com\/blog\/national-industrial-report\/\" target=\"_blank\" rel=\"noopener\">CommercialEdge report<\/a>. Last year also posted a record for industrial space deliveries, with more than 450 million square feet added nationally. New space is expected to be quickly absorbed by new tenant signings from the growing ecosystem of suppliers following large manufacturers into the market.<\/p>\n<p>These ecosystems are especially large around automotive manufacturers, Rand observed. \u201cFor example, when BMW began producing cars in Spartanburg, S.C., in the mid-1990s, suppliers followed to place production for important components close to BMW\u2019s assembly plant,\u201d Rand recalled. \u201cToday, Mercedes-Benz, Volvo, Michelin and Magna operate in South Carolina.\u201d A similar trend of increased industrial demand ensued in Austin, Texas, after Tesla announced plans for the Giga Texas plant in 2020.<\/p>\n<p>New ecosystems won\u2019t be created by every manufacturer, however. \u201cSemiconductor production is relatively insulated, and most new plants will be equipped to handle almost all needs internally,\u201d said Rand. \u201cThere will be minimal spillover impact for uses such as storing raw materials, including silicon, and specialized construction for building new sites.\u201d<\/p>\n<p>As the network of manufacturing suppliers continues to grow, the industry is feeling the pressure to develop and build accordingly. Manufacturers are in the process of vetting properties\u2019 power potential, workforce capabilities, load capacities, zoning requirements and quality of life, while commercial real estate developers and investors are continuing to scout adjacent opportunities.<\/p>\n<p><a href=\"https:\/\/mydigitalpublication.com\/publication\/?i=787859\"><em>Read the April 2023 issue of CPE.<\/em><\/a><\/p>","protected":false},"excerpt":{"rendered":"<p>What the rise of onshoring means for the sector\u2019s market dynamics.<\/p>\n","protected":false},"author":3006,"featured_media":1004653634,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1521,21748],"tags":[],"class_list":["post-1004653579","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-digital","category-industrial"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v24.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Manufacturing&#039;s Comeback Boosts Industrial Space Demand - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/manufacturings-comeback-boosts-industrial-space-demand\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Manufacturing&#039;s Comeback Boosts Industrial Space Demand\" \/>\n<meta property=\"og:description\" content=\"What the rise of onshoring means for the sector\u2019s market dynamics.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/manufacturings-comeback-boosts-industrial-space-demand\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2023-03-30T20:12:23+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-04-14T12:00:53+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-4-featured.jpg?w=874\" \/>\n\t<meta property=\"og:image:width\" content=\"874\" \/>\n\t<meta property=\"og:image:height\" content=\"656\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Jordana Rothberg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/manufacturings-comeback-boosts-industrial-space-demand\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/manufacturings-comeback-boosts-industrial-space-demand\/\",\"name\":\"Manufacturing's Comeback Boosts Industrial Space Demand - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/manufacturings-comeback-boosts-industrial-space-demand\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/manufacturings-comeback-boosts-industrial-space-demand\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-4-featured.jpg\",\"datePublished\":\"2023-03-30T20:12:23+00:00\",\"dateModified\":\"2023-04-14T12:00:53+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/366883c93fc1efde412301ab6a4570f9\"},\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/manufacturings-comeback-boosts-industrial-space-demand\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/manufacturings-comeback-boosts-industrial-space-demand\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/manufacturings-comeback-boosts-industrial-space-demand\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-4-featured.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/Intel-Ohio-Fabs-rendering-4-featured.jpg\",\"width\":874,\"height\":656,\"caption\":\"Industrial: The Manufacturing Comeback and Industrial Space Demand. 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