Survey: U.S. Manufacturers Seek Space for Industrial Projects

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Written by Will Ploch, Assistant Editor-in-Chief for IIR News Intelligence (Sugar Land, Texas)

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Summary

Despite rising rents and occupancy-related costs, U.S. industrial lease holders plan to maintain or expand their portfolios over the next 36 months, preferring newer, high-quality facilities.

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Expanding in a Challenging Market

CBRE Group Incorporated, one of the world's largest commercial real estate and investment companies, recently released its 2026 U.S. Industrial & Logistics Occupier Survey. The survey found that more than 90% of industrial lease holders across the U.S. plan to maintain or expand their properties over the next 36 months, fueled by a need for more space at lower costs. According to Industrial Info Resources data, more than $310 billion worth of expansion and addition projects in the U.S. Industrial Manufacturing Industry (excluding data centers) currently are set to kick off over the next 36 months.

Rising rents and occupancy-related costs were cited as the biggest challenges facing manufacturers and other industrial lease holders this year, along with rising supply-chain related costs and softening consumer demand. Despite these concerns, lease holders are "showing a clear preference for newer, high-quality facilities," according to a presentation on the results from CBRE.

"CBRE expects that owners of older, pre-2020 buildings may need to offer more concessions to secure tenants, mainly because they are increasingly locating in more modern, functionally efficient facilities," the company said in a press release accompanying the survey results.

Indeed, a quick look at the projects deemed by Industrial Info Resources as most likely to begin construction as scheduled shows several geared toward high-tech products that would require specialized space. General Atomics Incorporated is preparing for a new building at its drone-manufacturing complex in Poway, California, where the company produces engines for unmanned aerial vehicles (UAVs). Edwards Vacuum LLC, a subsidiary of Atlas Copco AB, is expanding production at its manufacturing plant for semiconductor dry pumps in Alabama, New York.

Despite the need for high-tech space, artificial intelligence (AI) "does not appear to be a major concern for industrial lease holders over the next 36 months," according to the survey, with 59% of respondents not currently using AI in their businesses and 36% not planning to do so soon.

For more information, the Industrial Info Resources Global Market Intelligence (GMI) Industrial Manufacturing Project Database offers details--including capacities, investment values and necessary equipment--in reports on the drone-manufacturing and semiconductor dry pump projects.

More than half of the manufacturing companies surveyed by CBRE are expanding (rather than just maintaining) their operations, or plan to do so in the next 36 months. While U.S. President Donald Trump's tariffs have received much attention amid the administration's efforts to revive U.S. manufacturing, only a small fraction of respondents to the survey cited tariffs as their top reason for domestic expansion.

"Forty-one percent of survey respondents said that protecting domestic inventory to serve American consumers, rather than avoiding tariffs, is the major reason for expanding their U.S. manufacturing operations," the presentation said. "Twenty-nine percent cited shorter production times as the major reason, while only 6% cited tariff avoidance."

By the Numbers

• More than 90%: Industrial lease holders across the U.S. who plan to maintain or expand their properties in the next 36 months, according to the CBRE survey
• More than 50%: Manufacturing companies surveyed by CBRE are expanding (rather than just maintaining) their operations in 36 months
• 41%: Respondents who cited "protecting domestic inventory" as their top reason for maintaining or expanding their properties

Southeast Shines Bright

The U.S. Southeast has become the top destination for manufacturing expansions, with respondents citing a "pro-business" environment and a growing population.

Industrial Info Resources is tracking 230 expansion and addition projects, valued at more than $27 billion, across the Industrial Manufacturing Industry in the U.S. Southeast. (Data centers, while categorized within Industrial Info Resources' Industrial Manufacturing Industry segments, were not included in these results.) Readers can consult a full list of project reports.

The automotive sector accounts for more than $12 billion of the Southwest's total, according to Industrial Info Resources data, with two tire projects amid the top investments: Hankook Tire America Corporation's Phase III expansion of its radial tire plant in Clarksville, Tennessee, and Bridgestone Corporation's expansion of its truck tire plant in Morrison, Tennessee. In addition to truck tires, both facilities will add production of bus tires.

The Clarksville project is set to be completed in the third quarter, while the Morrison project is set to wrap up toward the end of the year. For more information, readers can view detailed reports on the Clarksville and Morrison projects.

About 36% of respondents to the CBRE survey picked the Southeast as their top destination for expansion, while the Midwest came in second at 18%.

Industrial Info Resources is tracking 120 expansion and addition projects, valued at more than $19 billion, across the Industrial Manufacturing Industry in the Midwest. Readers can consult a full list of project reports.

Military-related manufacturing plays a strong role in the Midwest, according to Industrial Info Resources data, with two ammunition plants catering to the U.S. Army undergoing expansions: The U.S. Department of Defense's plant in Middletown, Iowa, and Olin Corporation's Lake City Plant in Independence, Missouri. The Middletown project will boost production of the Army's 155-millimeter high-explosive projectiles, while the Lake City project will increase production of 6.8-millimeter ammunition for the Army's Next Generation Squad Weapon Program.

Both projects are set to be completed in 2027. For more information, readers can view reports on the Middletown and Lake City projects.

CBRE says it conducted its survey "from December 2025 to February 2026 from a mix of industry sectors," before the outbreak of the U.S.-Iranian conflict. It did not specify who, or how many, were surveyed. All project information within the article comes from Industrial Info Resources.

The Industrial Info Resources GMI Project and Plant databases offer a full list of detailed reports for projects mentioned in this article, and a full list of related plant profiles.

Industrial Info Resources also offers a full list of reports for expansion and addition projects in the U.S. Industrial Manufacturing Industry (excluding data centers) currently set to kick off over the next 36 months.

Key Takeaways

• Rising rents and occupancy-related costs were cited as the biggest challenges facing industrial lease holders.
• Only a small fraction of respondents to the survey cited tariffs as their top reason for domestic expansion.
• The U.S. Southeast has become the top destination for manufacturing expansions.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news, and analysis on the industrial process, manufacturing, and energy-related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified, and verified plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).