The industrial real estate space is one that has seen marked depression over the last few years. Yet, with companies like Amazon and Tesla expanding their presence and a new interest in revitalizing older industrial spaces —turning them into everything from housing to new retail space— many of the once depressed industrial regions across the country are seeing new life.
Whether you’re an agent, buyer, seller or tenant, it’s important to keep up with this trend, as it impacts all players in the space. But, where are these changes taking place? Here are three regions where the biggest changes in the industrial space are happening.
In the western part of the country, such as California, the industrial sector continues to see a lot of action. An area highly focused on tech development and ecommerce, companies are looking for faster and more efficient ways to get their packages to their consumers.
Companies in the retail and manufacturing sectors are showing new interest in industrial spaces in the West. For example, Tesla and Google, as they emerge with more high-tech auto, are purchasing industrial space for automobile testing facilities. In fact, several areas in California are seeing a tightening of the market —with quality industrial space becoming more and more limited as demand grows.
#2. The Midwest
The impact of the auto industry continues into the midwest, causing many areas that were previously affected by the manufacturing industry to now see a surge. Michigan, for example, is one of the biggest areas generating manufacturing jobs. Detroit, more specifically, is home to many skilled workers and engineers, slightly behind Silicon Valley. While this area saw the greatest decrease in de-industrialization, it seems that it is coming back around full-circle as the industrial sector continues to boom.
Again, the automobile industry plays a significant role in the increase of activity in the industrial sector. Companies such as Bridgestone and Nissan have established manufacturing plants in the Southeast, along with many other domestic automakers. The South is now one of the areas with the highest number of workers employed by advanced industries. The expansion of Boeing and other aerospace suppliers in the south has also contributed to the importance and need of industrial space.
There is no doubt that the auto industry has played a significant role, along with companies focusing on tech advances. As these sectors continue to grow and expand, the industrial sector will continue to grow as well, and this is a good thing. Growth in the industrial sector means more opportunities for emerging cities to add employment and even improve connections with global markets. While factory jobs may not be the force driving the economy, as it once was, it will continue to make a big impact on the economy and the commercial real estate space.