A busy automotive assembly line with multiple red robotic arms working on the chassis of cars, surrounded by various industrial equipment and machinery.

At Sealy & Company, our forward-thinking approach to industrial real estate investment has always been grounded in a keen understanding of market trends and a proactive stance on industry shifts. Insights from a recent report by Newmark and NAIOP affirm our strategic direction and spotlight the robust and dynamic evolution of the industrial commercial real estate (CRE) market, a realm where we have consistently led and innovated. Our long-standing commitment to responsible diversification mirrors the report’s findings, which predict a bright future for CRE, especially in high-tech, automotive, energy, and biomanufacturing sectors.

Sealy & Company’s successful track record spanning over 75 years and nine major market cycles makes us uniquely adept at anticipating market needs and acting decisively to capitalize on emerging opportunities. The Newmark and NAIOP report’s emphasis on expanding manufacturing spaces and the significant growth forecasted in the U.S., Canada, Mexico, and along the U.S.-Mexico border further validate our vision and the strategic moves we have already made. With over 300 major manufacturing facility announcements across North America, indicating about $400 billion in pledged investments and the creation of at least 210,000 new jobs, the industry’s trajectory aligns with our initiatives to foster growth, innovation, and sustainability. The research published in the report serves as a testament to our long-standing engagement in regions set to benefit from these trends and our focus on U.S. industrial real estate dynamics, further showcasing our strategic foresight and the effectiveness of our approach to industrial real estate investment.

Sealy & Company continues to reinforce its position as an industry leader who is skillful at navigating and shaping the future landscape of industrial CRE. Our mission remains steadfast: to create value for our stakeholders by investing in sectors that are thriving today and poised for growth in the future as we continue to build on our legacy of innovation and excellence in the industrial real estate market.



The future of industrial CRE is strong, but advancing in a new direction, according to a report from Newmark and NAIOP.


CRE for advanced manufacturing is the wave of the future, while warehousing and distribution take a back seat, the report finds. It predicts new construction related to the high tech, automotive, energy, and biomanufacturing sectors will add 6% to 13% to the nation’s existing manufacturing space within the decade. And the U.S. will not be the only beneficiary. Canada and Mexico, as well as U.S. cities along the border with Mexico, will also see significant growth in these sectors.


“Since 2020, over 300 major manufacturing facility announcements have been made across North America, representing approximately $400 billion in pledged project investment, at least 210,000 new proposed jobs, and a minimum of 250 million square feet of new development over the next decade,” the report stated, calling this “a watershed moment”.


The projected growth is being driven partly by the Biden administration’s push to spur a revival of manufacturing in the U.S. and to encourage reshoring and nearshoring following the economic disruptions caused by the Covid pandemic. The administration’s three landmark pieces of legislation each contained billions of dollars in incentives to accomplish this goal. The Infrastructure and Investment Jobs Act provided $8 billion for subsidies and infrastructure investment to stimulate manufacturing especially related to electric vehicles and energy. The CHIPS and Science Act set aside $50 billion for semiconductor manufacturing and R&D, including $39 billion in direct incentives. And the Inflation Reduction Act directed $400 billion to help reduce greenhouse gas emissions and adopt clean energy initiatives. A later executive order provided $2 billion to expand domestic biomanufacturing.


Real private manufacturing construction spending grew at an annualized rate of 62% in August 2023. The computer/electronic/electrical subsector saw the largest investment of any sector on a per project basis, soaring to 56% by August 2023 – compared to just 10% in 2019.


The high-tech/digitalization and automotive/transportation sectors are expected to have the biggest impacts on manufacturing, the report said. That’s because they constitute the greatest volume of new projects and proposed jobs, as well as the largest project size as measured in square feet. They “have unique and complementary drivers that will propel further manufacturing growth,” the report said.


The growth is taking place in many states, but the South and Midwest especially are benefiting. “New manufacturing clusters are forming and existing clusters are expanding as a record number of new projects are either underway or set to break ground in the next decade,” the report found.


“The regions poised to benefit most from advanced manufacturing employment projections, development and attendant economic growth are predominantly secondary and tertiary markets with higher-than-average levels of preexisting advanced manufacturing talent, relatively lower-cost energy supplies and abundant, affordable land,” the report predicted. Nearly 50% of the manufacturing jobs announced in recent years are in 15 markets, both large and small.


Phoenix ranked first by number of manufacturing jobs announced – 15,466 (14 projects), followed by Atlanta – 12,713 (7 projects) and Austin – 11,465 (6 projects). Mid-sized metros also saw many jobs announced like Syracuse, NY – 9,000 (1 project) and Savannah, GA – 8,840 (2 projects) while micropolitan Brownsville, TN added 7,490 (3 projects) and Sherman, TX added 4,500 (2 projects).


“At the end of 3Q 2023, manufacturing construction reached 62.2 million square feet, a record high in data going back to 2003, representing 11.5 percent of the total national industrial pipeline (540 million square feet),” the report noted. “This comes as development for many other commercial real estate sectors (including logistics) wanes due to the slowing economy and difficulty in sourcing construction loans, especially for speculative construction.”


The multiplier effects of advanced technology projects will make their impact even greater, though the effects will be uneven. In addition to suppliers and related industries, other companies may move in.


The report cites the example of Tesla’s EV 10 million SF gigafactory and Navistar’s 900,000 SF EV truck production facilities in Austin. It attributes to them at least 3 million SF of warehousing/manufacturing absorption nearby. The plants have also spurred complementary companies to cluster nearby. And demand for multifamily, retail and hospitality space has increased to accommodate population and wage growth.


However, one challenge developers may encounter is opposition from some community groups or regulators to massive projects disrupting rural or small-town lifestyles.


Another major challenge for manufacturers in advanced sectors – in addition to their growing power needs and limited capacity — will be attracting or training the needed educated or skilled workforce. “Sourcing talent globally will also be critical in relation to attracting labor with specialty skill sets (as in certain semiconductor production processes). Immigrants account for about 40 percent of highly skilled workers in America’s semiconductor industry,” the report noted.


Fewer than one-third of announced projects have actually broken ground, suggesting that the development pipeline will keep growing. Most facilities will be owner-occupied or build-to-suit, though demand for leasable manufacturing space is growing. Speculative manufacturing space will remain an expensive and risky proposition.


Amidst all the excitement about the high-tech ahead, there is one cloud on the horizon. “It is unclear what changes might be enacted to existing federal programs following the 2024 election,” the report noted.


For more news and information regarding Sealy & Company, please visit the company’s website at www.Sealynet.com.

About Sealy & Company

Sealy & Company, a fully-integrated commercial real estate investment, and operating company, is a recognized leader in acquiring, developing, and redeveloping regional distribution warehouse, industrial/flex, and other commercial properties. Sealy provides a full-service platform for high-net-worth individuals and institutional investors through our development, management, and brokerage divisions.Sealy & Company has an exceptional team of over 100 employees, located in five offices, with corporate offices in Dallas, TX and Shreveport, ­LA.