Manufacturing, EVs to Drive New Industrial Supply This Year
Semiconductor and electric vehicle production have become sweet spots for developers.
Manufacturing is poised to take center stage when it comes to industrial development in 2024, especially regarding domestic semiconductor and electric vehicle production, according to a new report from Commercial Search.
Based on data provided by CommercialEdge, these industries displaced logistics centers, which have dominated the past few years.
In fact, the largest industrial development to be delivered in 2024 is a 17-million-square-foot Hyundai EV plant in Savannah, Ga.
Just last year, the 10 largest industrial completions were logistics facilities.
Overall, industrial construction normalized with 33% less industrial space underway now as compared to Q1 2023, according to the report.
Phoenix has overtaken Dallas as the market with the most space in the pipeline (42.5 million square feet). It’s home to part of the current 463 million square feet of industrial space under construction nationwide, representing 2.4% of current industrial stock.
This however is a drop of almost one-third compared to last January’s 690 million square feet of space underway when the cost of capital was more affordable.
Phoenix is the top market for new development despite it being forecasted to bring 18% less square footage, year-over-year (YoY).
In No. 2 Dallas, the ensuing wind-down in the logistics and distribution boom is evident in the 45% drop in stock under construction YoY.
Savannah, Ga., ranks third highest and has the largest pipeline-to-inventory ratio in the country by far.
Fourth is Inland Empire, Calif., which is experiencing the same slowdown in new industrial developments as seen elsewhere with vacancies rising to around 5% from 2% at the start of last year.
Austin, Texas, is No. 5 and the metro’s largest developments currently being built are both manufacturing facilities: Samsung’s semiconductor factory in Taylor, Texas, will total 6 million feet of space, whereas Tesla’s 1.4-million-square-foot battery cathode building is being added to its Giga Texas factory.
The rest of the top 10, in order, are Chicago, Houston, Charlotte, Las Vegas, and Kansas City, Mo.