Today’s volatile trade environment is rewriting the rules of supply chain strategy. Tariff shocks, import duties as high as 50% on steel, and unpredictable policy swings are forcing companies to rethink how, where, and why they build resilience. At the center of that shift? Industrial real estate.
Five years after the pandemic exposed critical weaknesses in global trade, the industrial sector has become a pillar of economic resilience. Warehouses and distribution centers—once logistical afterthoughts—are now central to strategies focused on regionalization, automation, and supply chain agility.
“The post-pandemic surge was a sugar high,” says Ted Konigsberg, SIOR, president of Infinity Commercial Real Estate in Miami, Florida. “Companies weren’t expanding strategically—they were reacting defensively.”
Absorption rates spiked as occupiers rushed to front-load inventory and secure space amid erratic costs. “If you don’t know what your widget will cost next week, you bring it in today,” Konigsberg recalls. Vacancy rates looked healthy, but much of that space sat idle filled with surplus, not throughput.
Tariffs, Trade, and Inventory Strategy
That front-loading trend hasn’t slowed. Ongoing policy shifts and geopolitical uncertainty continue to disrupt supply chains. Some companies are paying up to 75% in surcharges just to get ahead of new tariffs—effectively freezing parts of the logistics ecosystem.
North of the border, manufacturers are feeling similar heat. “There’s a lot of concern right now—especially for exporters to the U.S.,” says Chad Griffiths, SIOR, partner at NAI Commercial in Edmonton, Alberta. “Just the unpredictability of tariffs alone compresses margins and shakes confidence.”
Industrial Real Estate as a Strategic Lever
Real estate is no longer a static asset—it’s a resilience strategy.
“The definition of a strategic location has changed,” says Simons Johnson, SIOR, of Bridge Commercial in Charleston, S.C. “It’s no longer about ZIP codes. It’s about whether the grid can support your operation.”
Facilities that once met basic logistical needs now fall short. Modern operations require automation-ready infrastructure, robust power capacity, and flexible layouts. Legacy buildings often can’t keep up—no matter how well-located.
Efficiency Over Expansion
Today’s occupiers aren’t chasing more space—they’re chasing smarter space.
Think higher clear heights (32–36 feet), solar-ready rooftops, R-19 insulation, and layouts that adapt to shifting operational needs. “Those features aren’t amenities anymore,” says Johnson. “They’re economic necessities.”
Design flexibility—modular offices, dock-door optionality, adaptive footprints—is no longer a luxury. It’s a direct response to the unpredictability of policy and pricing.
Nearshoring Reshapes North America
While reshoring headlines spotlight U.S. moves, a quieter revolution is underway just south of the border. Mexican manufacturing hubs—Monterrey, Tijuana, Ciudad Juárez—are becoming deeply embedded in U.S. supply chains, offering lower labor costs and faster delivery cycles.
As a result, U.S. border cities like El Paso, Laredo, and McAllen are rising as critical cross-docking and last-mile hubs.
Not all regions are benefitting. “If anything, we’re on the losing end of nearshoring,” Griffiths says. “A lot of car production and high-value manufacturing that could have landed in Canada is heading south instead.”
Ports, Power, and the New Geography of Site Selection
Infrastructure has always mattered—but now the question isn’t just where, it’s what can this site handle?
Power load capacity, automation support, and future energy adaptability are core to today’s site decisions.
Charleston has invested billions in harbor deepening, bridge expansion, and on-site rail to stay competitive—a playbook mirrored by Savannah and Jacksonville, all positioning for mega-ships and manufacturing-linked trade.
Development Slows Amid Capital Constraints
Despite tenant demand, new development is cooling. NAIOP projects flat net absorption through 2025—the slowest pace in over a decade.
Why? Risk-averse lenders, volatile construction costs, and bureaucratic delays. With 63% of commercial real estate loans maturing by the end of 2025, per Moody’s, refinancing is taking priority over new projects.
“Fixed-price bids are almost impossible,” says Konigsberg. “Between material costs and delays, few developers can confidently underwrite a schedule or a budget.”
Canada faces similar challenges. “We talk about being open for business, but red tape remains a major obstacle,” Griffiths says. “The gap between policy and execution slows everything—from pipelines to permitting.”
Beyond the Urban Core
With coastal land constrained and costly, growth is shifting inland. In Florida, developers are targeting St. Lucie County—within a single day’s drive of Miami, Orlando, and Jacksonville.
That 200-mile radius allows same-day delivery while staying within federal hours-of-service limits—making it a logistics sweet spot. As a result, secondary and exurban markets are where value and opportunity now live.
Optionality: The New Competitive Edge
Resilience isn’t optional—it’s the baseline. And the keyword in boardrooms right now is optionality.
“More than one source, more than one route, more than one plan,” says Griffiths. “The companies building that into both their supply chains and real estate are going to come out ahead.”
Optionality also means staying ahead of policy risk. A single tariff can upend an entire sourcing model. The right facility—adaptable, resilient, well-placed—can mean the difference between survival and stall-out.
Industrial real estate, once overlooked, is now the foundation of supply chain strategy. In a post-COVID world where geopolitics and grid stress matter as much as geography, flexibility isn’t a preference. It’s the plan.
