- Reshoring Momentum Seen Nationwide Could Increase the Size
of the U.S. Manufacturing Base by More Than 10% Over 10
Years
- Related Industrial Real Estate Growth and Demand is
Concentrated in the Midwestern and Southern U.S.
- "Forging the Future: Manufacturing Growth and Its Effects On
North American Industrial Markets," Released Today
HERNDON,
Va., Feb. 15, 2024 /PRNewswire/ -- A new report
published by the NAIOP Research Foundation, in partnership with
Newmark, examines the surge of manufacturing jobs reshoring and the
impact on industrial real estate, local communities, and the
broader economy.
"Forging the Future: Manufacturing Growth and Its Effects on
North American Industrial Markets" was written by Newmark's
Lisa DeNight, Managing Director,
National Industrial Research and Liz
Berthelette, CRE, Head of Northeast Research & National
Life Science Research.
"Currently, the U.S. has less than 5 billion existing square
feet of statistically-tracked manufacturing inventory.
Comparatively, we are priming for market expansion that could
equate to upwards of ten percent of that entire stock — 500
million square feet — in the next decade alone. This
unprecedented surge in North American facility announcements in
recent years underscores the profound impact of global risk
considerations and domestic manufacturing incentives on the
industrial market," said DeNight.
Berthelette continued, "The confluence of the CHIPS Act,
Inflation Reduction Act and Infrastructure Investment and Jobs Act
represents an amount of federal spending aimed at catalyzing
industrial development that has few parallels in modern U.S.
history — it would likely be appropriate to consider this a
watershed moment for the sector."
Reshoring is being driven by several factors including
disruptions in global supply chains, tensions between the U.S. and
China, and U.S. government
spending on infrastructure and subsidies for industries associated
with electrification, green energy, and strategically important
technologies.
"The volume of proposed manufacturing projects has the potential
to reshape the U.S. manufacturing base, which currently measures
approximately 4 billion square feet. Of the approximately 300 major
manufacturing projects announced since 2020, just over half have
publicly released details about the size of the facility… the
announced projects could increase the size of the U.S.
manufacturing building stock by 6-13% in just a decade," according
to the report.
"The impact of reshoring manufacturing will be dramatic and
far-reaching in terms of industrial real estate, local and national
tax revenues, increases in jobs, and growth in regional and
national economies," said Marc
Selvitelli, CAE, president and CEO, NAIOP.
According to Newmark's advanced manufacturing report from
September, Manufacturing Momentum: Advanced Manufacturing
Ascendancy in North America,
more than 300 major manufacturing facility announcements have been
made across the U.S. since 2020, representing approximately
$400 billion in pledged project
investment and at least 210,000 new proposed jobs.
Among the key findings in the NAIOP Research Foundation/Newmark
report:
- Firms in the high-tech, automotive, energy, and
biomanufacturing sectors are making the largest investments in new
manufacturing in the U.S. New construction is expected to expand
the footprint of U.S. manufacturing space by 6-13% over the next 10
years.
- New manufacturing plants have been announced in every U.S.
state, but investment has been concentrated in the Midwest and
Southeast. Most new construction is expected to be in secondary or
tertiary market locations that can offer adequate supplies of
affordable energy and skilled labor.
- Most of the new manufacturing construction will be
build-to-suit or owner-built, but demand will also exist for
speculative manufacturing space. The expansion of domestic
manufacturing is also expected to generate demand for logistics
space and other types of commercial real estate in the communities
surrounding new plants. The amount of additional demand generated
by this construction will vary depending on a project's sector,
existing supply chains, and local market dynamics.
- Several of the trends driving onshoring in the U.S. are also
contributing to nearshoring of manufacturing to Mexico and Canada, with Mexico attracting the most nearshoring
investment. This investment is generating demand for logistics and
complementary manufacturing facilities along the U.S. border with
Mexico, pushing down vacancy rates
and spurring new construction near key border crossings such as
Laredo, Texas.
About Newmark: Newmark Group, Inc. (Nasdaq: NMRK),
together with its subsidiaries ("Newmark"), is a world leader in
commercial real estate, seamlessly powering every phase of the
property life cycle. Newmark's comprehensive suite of services and
products is uniquely tailored to each client, from owners to
occupiers, investors to founders, and startups to blue-chip
companies. Combining the platform's global reach with market
intelligence in both established and emerging property markets,
Newmark provides superior service to clients across the industry
spectrum. For the year ending December 31,
2022, Newmark generated revenues of approximately
$2.7 billion. As of September 30, 2023, Newmark's company-owned
offices, together with its business partners, operate from
approximately 170 offices with 7,400 professionals around the
world. To learn more, visit nmrk.com or follow @newmark.
Discussion of Forward-Looking Statements about Newmark:
Statements in this document regarding Newmark that are not
historical facts are "forward-looking statements" that involve
risks and uncertainties, which could cause actual results to differ
from those contained in the forward-looking statements. These
include statements about the effects of the COVID-19 pandemic on
the Company's business, results, financial position, liquidity and
outlook, which may constitute forward-looking statements and are
subject to the risk that the actual impact may differ, possibly
materially, from what is currently expected. Except as required by
law, Newmark undertakes no obligation to update any forward-looking
statements. For a discussion of additional risks and uncertainties,
which could cause actual results to differ from those contained in
the forward-looking statements, see Newmark's Securities and
Exchange Commission filings, including, but not limited to, the
risk factors and Special Note on Forward-Looking Information set
forth in these filings and any updates to such risk factors and
Special Note on Forward-Looking Information contained in subsequent
reports on Form 10-K, Form 10-Q or Form 8-K.
About NAIOP: NAIOP, the Commercial Real Estate
Development Association, is the leading organization for
developers, owners and related professionals in office, industrial,
retail, and mixed-use real estate. NAIOP comprises 21,000 members
in North America. NAIOP advances
responsible commercial real estate development and advocates for
effective public policy. For more information,
visit naiop.org.
About the NAIOP Research Foundation: The NAIOP
Research Foundation was established in 2000 as a 501(c)(3)
organization to support the work of individuals and organizations
engaged in real estate development, investment, and operations. The
Foundation's core purpose is to provide information about how real
properties, impact, and benefit communities throughout North
America. For more information,
visit naiop.org/researchfoundation.
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SOURCE NAIOP