The Next Wave of Industrial Demand is Taking Shape

A potential $1 trillion U.S. manufacturing buildout could bring new companies and new sources of demand to industrial real estate.

Authored By
Michael Hud­gins, Senior Man­ag­ing Direc­tor, Invest­ment Research and Allo­ca­tion
Palmer Let­zerich, Senior Man­ag­ing Direc­tor, Head of Indus­tri­al and Logis­tics for the Amer­i­c­as
Erik Thomas, Senior Direc­tor, Research
Michael Spel­lane, Senior Asso­ciate, Research

A new chap­ter in U.S. man­u­fac­tur­ing is begin­ning to reshape indus­tri­al real estate. Hines Research esti­mates that U.S. man­u­fac­tur­ing con­struc­tion spend­ing could total rough­ly $1 tril­lion from 2026 through 2030, poten­tial­ly mak­ing this one of the largest indus­tri­al build­outs in mod­ern history.

For pri­vate wealth investors, the sig­nif­i­cance extends beyond the head­line num­ber. Man­u­fac­tur­ing invest­ment is bring­ing a new gen­er­a­tion of busi­ness­es into the indus­tri­al mar­ket, cre­at­ing addi­tion­al sources of ten­ant demand along­side the tra­di­tion­al com­pa­nies that have his­tor­i­cal­ly occu­pied ware­hous­es and man­u­fac­tur­ing facil­i­ties. If that demand proves durable, it could sup­port occu­pan­cy and rental income poten­tial over a long invest­ment horizon.

New Companies Doing New Things

Two forces are now sup­port­ing U.S. indus­tri­al demand.
The first is cycli­cal: tra­di­tion­al users, includ­ing goods man­u­fac­tur­ers, retail­ers, and e‑commerce com­pa­nies, are return­ing to the mar­ket. The sec­ond is struc­tur­al. Advanced man­u­fac­tur­ing and dig­i­tal infra­struc­ture are cre­at­ing an entire­ly new class of indus­tri­al tenants—businesses that in many cas­es had lit­tle or no pres­ence in the mar­ket only a few years ago.

Hines calls them ​“New Com­pa­nies Doing New Things.​”
This grow­ing base includes busi­ness­es sup­port­ing data cen­ters through logis­tics, infra­struc­ture, and con­struc­tion, as well as firms expand­ing advanced man­u­fac­tur­ing activ­i­ties beyond tra­di­tion­al indus­tri­al uses. Hines esti­mates that 10%–30% of recent leas­ing activ­i­ty in our indus­tri­al spaces has come from this emerg­ing occu­pi­er pro­file.1

The result is a broad­er base of demand for indus­tri­al prop­er­ties. Parts of the sec­tor that were once dri­ven pri­mar­i­ly by the move­ment and stor­age of con­sumer goods are increas­ing­ly con­nect­ed to long-term invest­ment in com­put­ing infra­struc­ture, advanced tech­nol­o­gy, ener­gy sys­tems, and nation­al defense.

For investors, that diver­si­fi­ca­tion of demand may be mean­ing­ful. Indus­tri­al prop­er­ties capa­ble of serv­ing busi­ness­es across mul­ti­ple expand­ing indus­tries may ben­e­fit from demand less depen­dent on any sin­gle eco­nom­ic driver.

A Manufacturing Revival Built Around Innovation

While whole­sale reshoring of glob­al man­u­fac­tur­ing has not occurred, invest­ment has increas­ing­ly con­cen­trat­ed in high­er-val­ue, strate­gi­cal­ly impor­tant indus­tries. Since U.S.-China trade ten­sions began esca­lat­ing around 2018, man­u­fac­tur­ing con­struc­tion spend­ing has risen sharply, with advanced man­u­fac­tur­ing becom­ing an impor­tant part of the expansion.

Four areas stand out in Hines’ research: defense, data cen­ters, semi­con­duc­tors, and bat­ter­ies. While dis­tinct, these indus­tries rely on many of the same ingredients—technical labor, pow­er infra­struc­ture, logis­tics net­works, spe­cial­ized facil­i­ties, and sophis­ti­cat­ed suppliers.

That over­lap can extend the real estate impact beyond a major facil­i­ty itself. A semi­con­duc­tor plant, bat­tery fac­to­ry, or data cen­ter can attract sup­pli­ers and oth­er busi­ness­es that also require near­by indus­tri­al space, help­ing form an ecosys­tem around the ini­tial investment.

Data cen­ters illus­trate the effect. Although they are not man­u­fac­tur­ing facil­i­ties them­selves, they are major cus­tomers for bat­ter­ies, servers, semi­con­duc­tors, and oth­er advanced components—connecting growth in dig­i­tal infra­struc­ture to demand across a much broad­er indus­tri­al sup­ply chain.

The Potential $1 Trillion Buildout

Build­ing on the recent tra­jec­to­ry in man­u­fac­tur­ing con­struc­tion spend­ing, Hines Research esti­mates that the U.S. could see rough­ly $1 tril­lion in cumu­la­tive man­u­fac­tur­ing con­struc­tion by 2030.

Not every dol­lar of that invest­ment will trans­late direct­ly into stronger real estate per­for­mance. How­ev­er, the scale of the build­out cre­ates the poten­tial for a sig­nif­i­cant new source of demand—one that may unfold over years rather than quarters.

For pri­vate wealth investors, that longer hori­zon is impor­tant. Expand­ing ten­ant demand may sup­port occu­pan­cy and rental income, while the abil­i­ty for rents to adjust over time may influ­ence real estate pur­chas­ing pow­er through chang­ing eco­nom­ic environments.

The man­u­fac­tur­ing revival is ulti­mate­ly about more than where goods are pro­duced. It is chang­ing the mix of com­pa­nies using indus­tri­al real estate and cre­at­ing new con­nec­tions between phys­i­cal infra­struc­ture, tech­nol­o­gy, and domes­tic pro­duc­tion. As that invest­ment con­tin­ues, these emerg­ing ten­ant ecosys­tems could become an increas­ing­ly impor­tant source of durable demand—and a defin­ing fea­ture of the next phase of the U.S. indus­tri­al market.

Figure 1: The Potential $1 Trillion Buildout
U.S. manufacturing construction spend, rolling five-year total

Source: Federal Reserve of St. Louis, Hines Research. As of 4Q2025. Forecasted results may differ materially from actual results; forecasts are not a guarantee of future performance.


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