{"id":1004746955,"date":"2025-02-12T07:47:03","date_gmt":"2025-02-12T15:47:03","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004746955"},"modified":"2025-02-19T12:06:10","modified_gmt":"2025-02-19T20:06:10","slug":"manufacturing-demand-for-industrial-space-is-mushrooming","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/manufacturing-demand-for-industrial-space-is-mushrooming\/","title":{"rendered":"Manufacturing Demand for Industrial Space Is Mushrooming"},"content":{"rendered":"\n

Manufacturing in the U.S. is expanding at a rate not seen in decades, and it is going to have a major impact on the U.S. industrial real estate markets, according to a new JLL report, U.S. Manufacturing Renaissance. <\/p>\n\n\n\n

In fact, JLL predicts, manufacturing-related demand will reach 25 percent of U.S. industrial demand by 2028, up from less than 19 percent last year.<\/p>\n\n\n\n

\"Chart<\/a>
Manufacturing-related demand is expected to reach 25 percent of U.S. industrial demand by 2028. Chart courtesy of JLL<\/em><\/figcaption><\/figure>\n\n\n\n

Manufacturing demand for space has already expanded in a major way, the report notes. In 2019, such demand represented only 4.3 percent of total industrial space demand<\/a>. By 2024, that share was 18.8 percent, well over a three-fold increase.<\/p>\n\n\n\n

This is a complete turnaround from before 2020. From 2018 to that year, manufacturing requirements decreased 1.9 percent each year, on average. Since 2020, those requirements have increased by 50 percent each year, on average.<\/p>\n\n\n\n

\"Manufacturing<\/a>
Manufacturing real estate requirements have increased by an average of 50 percent year-over-year since 2020. Chart courtesy of JLL<\/em><\/figcaption><\/figure>\n\n\n\n

Reasons for the change<\/h2>\n\n\n\n

\u201cA confluence of economic, technological, and geopolitical factors is compelling manufacturers to reassess their operational strategies and locations,\u201d Greg Matter, JLL\u2019s executive managing director of industrial leasing told Commercial Property Executive<\/em>.<\/p>\n\n\n\n

The resurgence has come from a number of different industries, but the prime driver has been in such industries as batteries and electric vehicles, clean energy and semiconductors. The automotive industry, led by EVs and autonomous tech, is expanding, and so are aerospace, defense and AI.<\/p>\n\n\n\n

\n\n\n\n

READ ALSO<\/strong>: Sector Transitions as Supply Shrinks<\/a><\/p>\n\n\n\n

\n\n\n\n

The demand has been in a lot of places, but major markets such as Chicago, Dallas-Fort Worth and Phoenix are benefiting the most.<\/p>\n\n\n\n

A number of factors are at play in pushing up demand for manufacturing space, including reshoring, which is at least in part a reaction to supply chain issues during the pandemic, as businesses seek more resilient and stable supply chains.<\/p>\n\n\n\n

\u201cAs companies seek to optimize their production processes and bring operations closer to end markets, the demand for modern, technologically advanced manufacturing spaces is likely to continue its upward trajectory,\u201d the report noted.<\/p>\n\n\n\n

Political support<\/h2>\n\n\n\n

Political considerations are also important, and the political will seems to be there to support manufacturing growth.<\/p>\n\n\n\n

\u201cAmid the ongoing discourse surrounding tariffs, it is evident that there exists bipartisan support for the \u2018reindustrialization\u2019 of American manufacturing,\u201d Matter said. \u201cOur data projections indicate that this trend will persist over the coming decade.\u201d<\/p>\n\n\n\n

The new administration is pushing protectionist policies that will likely encourage domestic manufacturing, the report explained. Also, the former administration oversaw policies spurring domestic chip manufacturing and sustainable energy manufacturing, which has momentum that is unlikely to be undone.<\/p>\n\n\n\n

New development is in the cards<\/h2>\n\n\n\n

Satisfying the surge in demand for manufacturing space will be more than a matter of retooling or expanding existing facilities, because the average age of existing manufacturing space in the U.S. is 51 years, with more than half between 30 and 60 years old. That is, they are leftovers from the previous golden age of U.S. manufacturing\u2014before the 1980s.<\/p>\n\n\n\n

The bulk of the older facilities are in such traditional manufacturing markets as Chicago, Detroit and New Jersey, which will see both new development and updating facilities to use the latest technologies. Markets such as Savannah, Ga., and Phoenix are leading the way in new facility development.<\/p>\n\n\n\n

\"Chart<\/a>
Obsolete manufacturing buildings hint at a need for more modernized infrastructure. Chart courtesy of JLL<\/em><\/figcaption><\/figure>\n\n\n\n

Besides the age of the building stock, other challenges for manufacturing will include finding suitable land, enough power and enough skilled labor, JLL reported<\/a>.<\/p>\n\n\n\n

In terms of land acquisition, a lot of the suitable brownfield sites have already been taken, the result of a \u201cgold rush\u201d for such sites between 2020 and \u201823, the report explained. Much of what is left is functionally obsolete, with the expense of redevelopment enough that greenfield options are also being considered.<\/p>\n\n\n\n

As for power, manufacturers will be competing with data centers in the future for access to robust and cost-effective sources of electricity. <\/p>\n\n\n\n

Labor challenges<\/h2>\n\n\n\n

Manufacturers will also be competing against each other for relatively scarce skilled labor, especially as manufacturing processes become more advanced.<\/p>\n\n\n\n

\u201cThe most significant challenge facing companies as they seek to scale up operations in the U.S. will be the long-term availability of skilled manufacturing talent,\u201d Matter said.<\/p>\n\n\n\n

When considering the establishment of new facilities, decision-making criteria are evolving beyond traditional metrics such as job creation, growth potential and industry concentration, Matter noted. Companies are now incorporating quality of life factors to enhance their ability to attract and retain a high-caliber workforce. <\/p>\n","protected":false},"excerpt":{"rendered":"

In three years, a quarter of industrial demand will be from factories, JLL predicts. Read more.<\/p>\n","protected":false},"author":1023,"featured_media":1004747074,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21782,21808,21748,21783,23891,21742,51132,37749,51037],"tags":[32796],"class_list":["post-1004746955","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-development","category-featured","category-industrial","category-investment","category-national","category-latest","category-newsletter-graph","category-research-center-cpe","category-trends","tag-jll"],"acf":[],"yoast_head":"\nManufacturing Demand for Industrial Space Is Mushrooming - Commercial Property Executive<\/title>\n<meta name=\"description\" content=\"Manufacturing in the U.S. is expanding rapidly, and it is going to have a major impact on U.S. industrial real estate markets, JLL projects.\" \/>\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\/manufacturing-demand-for-industrial-space-is-mushrooming\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Manufacturing Demand for Industrial Space Is Mushrooming\" \/>\n<meta property=\"og:description\" content=\"Manufacturing in the U.S. is expanding rapidly, and it is going to have a major impact on U.S. industrial real estate markets, JLL projects.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/manufacturing-demand-for-industrial-space-is-mushrooming\/\" \/>\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=\"2025-02-12T15:47:03+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-02-19T20:06:10+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/02\/JLL_Obsolete_Manufacturing_Buildings-feat.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"620\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Dees Stribling\" \/>\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\/manufacturing-demand-for-industrial-space-is-mushrooming\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/manufacturing-demand-for-industrial-space-is-mushrooming\/\",\"name\":\"Manufacturing Demand for Industrial Space Is Mushrooming - 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