The Southeast United States has successfully attracted industrial occupiers and investors, driven by ongoing population growth, low costs, strategic infrastructure access, and a favorable business operation environment. Industrial vacancy rates remain below pre-pandemic averages, and rental rates continue to rise in key markets, according to Cushman & Wakefield’s Southeast regional industrial labor report for the first quarter.
The population of the Southeast’s 17 major metropolitan areas has grown to 44.9 million residents, which is expected to increase by 4% over the next five years, nearly double the national growth rate. This population growth has helped fuel an industrial boom, including a surge in e-commerce, third-party logistics, and manufacturing companies moving into the region.
Cushman & Wakefield said nearly 545.1 million square feet of industrial space has been absorbed across key Southeast industrial markets since the start of 2019. Demand normalized in 2024 with 50 million square feet of net occupancy gains. Industrial developers built nearly 695 million square feet of new product in response to the region’s population growth and consumer demand. However, construction starts have now eased after new industrial supply peaked in 2023, which should balance the market throughout the coming year, the report said.
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Cushman said the region’s deeper blue-collar labor pool than the national average is synergistic with industrial growth. During the next five years, warehouse and production jobs are expected to grow by 3.2% and 2.2%, respectively, significantly outpacing the national rate.
Nearly 650,000 employees in Southeast metros have transitioned from roles in other industries to transportation and warehouse jobs since 2020. Notably, Atlanta, South Florida, Tampa, and Orlando each had more than 50,000 job switches. Over the same time period as major manufacturing facilities became operational, more than 700,600 workers shifted into manufacturing jobs in key Southeast metros, led by Atlanta.
The report said the region’s industrial market could face challenges related to immigration policy and tariffs. An estimated 18.1% of warehouse material mover jobs are occupied by undocumented workers, according to the report. The share of undocumented workers across the Southeast is about 4.1%, although Florida has the third-largest share of undocumented workers in the United States, at 7.5%.
Meanwhile, sustained tariffs would lead to reduced trade and higher uncertainty, which could prolong a sluggish demand environment in manufacturing and retail. Costs for construction materials including lumber, steel and machinery may increase and delay projects, and the supply chain could become less diverse. However, reshoring of manufacturing operations in response to tariffs could benefit certain industrial markets and potentially create jobs in the manufacturing and distribution sectors, said the report.
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
