The industrial and logistics sector also faces heightened operational security risks from weather events, and two-thirds of occupiers have made commitments to reduce emissions through energy upgrades, fleet electrification and clean energy procurement. Sixty-five percent of 900 occupiers JLL surveyed said their future space needs will be tied to a carbon-reduction target. With average lease terms of about seven years for industrial talents, leases signed today will collide with 2030 targets to reduce emissions by 50%, the report noted.

Nearly 70% of US industrial inventory is within the top 10 markets most exposed to climate risk, said JLL. As such, occupiers are increasingly looking for properties that ensure business continuity and employee safety through enhanced physical resilience and onsite energy solutions.

More than three-quarters of industrial stock in the United States is more than 10 years old. This has elevated the importance of retrofitting buildings as a strategy for building owners to mitigate obsolescence risk and attract tenants. Retrofitting buildings with features like LED lighting and solar panels can achieve energy cost reductions of up to 35%, the study found. Onsite energy installations paired with battery storage systems are also emerging as critical solutions, JLL said. Investing in improved ventilation and indoor air quality, access to green spaces, and comfortable temperatures and work environments are features that can enhance employee retention for occupiers, said JLL.

However, the needs within the industrial sector are nuanced, the report noted. Warehousing and distribution properties typically favor onsite energy, efficiency and EV infrastructure, while manufacturing companies tend to prioritize energy efficiency and security as well as waste management.

“Generally, as occupiers understand what they need to do to show progress on sustainability commitments, building upgrades that allow owners to communicate measurable improvements are key differentiators,” said JLL.