The industrial real estate sector is experiencing a significant shift, as growth is now breaking away from its traditional concentration in established distribution and manufacturing hubs. A new slate of regional hubs is drawing institutional capital and end-user interest, each defined by a unique combination of location advantages, infrastructure investments and evolving demand drivers, according to a new report by Colliers. Executives surveying this class of markets find fresh opportunities complicated by localized risk and supply dynamics, as documented in recent years’ supply surges and shifting vacancy rates.
One illustrative case is Boise, Idaho, distinguished by its connectivity and business climate. Located along I-84 within convenient reach of the Pacific Northwest and Northern California, Boise benefits from both agricultural and technology pipelines. Multi-billion-dollar expansions by semiconductor producers and the continuing appeal for agricultural aggregation support both new construction and absorption, with institutional investment favoring modern logistics assets. Vacancy has moved up to 8.3 percent, just above the national average, as deliveries pour in, but absorption has largely kept pace with development, indicating sustainable long-term fundamentals despite recent slackening in net take-up. Local officials and major employers have leveraged competitive power rates, abundant water and a relatively streamlined entitlement process to attract both tenants and developers, counterbalancing constraints seen in harder-regulated adjacent western markets.
Further south, Albuquerque, New Mexico, operates in the shadow of elevated land and development costs, but delivers consistently low vacancy and stable absorption through build-to-suit projects targeting aerospace, federal government and advanced manufacturing users. Amazon and Meta remain notable new entrants on the end-user side, underpinning the trend toward expansion without the volatility associated with heavy speculative building. The market’s inventory growth has remained controlled with a 3.3 percent vacancy rate and the absence of excessive speculative construction has helped maintain tight conditions, even as absorption ebbs and flows occur with tenant move-outs and new project deliveries.
The El Paso industrial market stands out for its rapid inventory growth and role as a logistics and manufacturing gateway along the U.S.-Mexico border. The influence of nearshoring has brought a wave of new supply, with over 20 million square feet delivered in five years and a vacancy rate recently ascending to 14.1 percent. Trade policy volatility, the pace of recent completions, and a large volume of unleased new product create a complex short-term outlook. However, proximity to Ciudad Juárez, advanced manufacturing nodes tied to both U.S. and Mexican supply chains, and workforce pipelines from local universities sustain optimism about El Paso’s resilience once the market absorbs current overhang. Labor advantages, coupled with Foreign Trade Zone benefits, are anticipated to support renewed demand as conditions re-stabilize.
Omaha’s central location and rail connectivity have allowed it to quietly build a track record of balanced industrial expansion, benefiting both from local investor preference and, now, a growing interest from national firms. Vacancy stands at 2.3 percent, one of the lowest among emerging markets, reflecting consistent demand for data centers, regional distribution centers and food and agricultural manufacturing. Demand for industrial product has outpaced supply, lowering already tight availability and prompting a gradual rise in asking rents. The city's steady labor market and energy-cost advantages provide additional appeal, even as long-term users sometimes turn to adjacent regions to address space shortages.
Dayton, Ohio, continues to leverage its long-standing manufacturing base and strategic Midwest location. Supported by programs such as the Dayton Development Coalition and JobsOhio, the region is growing its automotive, aerospace and next-generation battery manufacturing profiles. Employers are attracted by workforce reliability and robust utility infrastructure. This, paired with property tax abatement around the airport, has supported continued absorption of speculative product. Despite relatively limited supply-side risk, future conditions will depend on the pace at which major projects and expansions translate into stabilized leased space.
In Huntsville, Alabama, both population inflows and advanced manufacturing drive sustained demand, even as the market grapples with vacancy currently at 10.9 percent. The presence of major military installations, U.S. Space Command and ongoing investments in data centers are generating interest across occupier categories. However, an oversupply in speculative space has dampened absorption rates in the short term, although the underlying labor draw and operating cost structure suggest the market can weather interim softness in fundamentals.
Turning to Florida's Treasure Coast, demographics and infrastructure — rather than traditional port traffic — underpin industrial growth. Buoyed by strong household formation and more affordable relative costs than Miami or Palm Beach, the region saw industrial supply expand by 43 percent over three years, peaking with high vacancy in early 2024 before dropping to 13.8 percent. As both construction and speculative activity have throttled back, gradual absorption has returned, with infrastructure upgrades at major transport junctions expected to support further stabilization.
Savannah, Georgia, remains an outlier for sheer pace of industrial development, riding the growth of its port and transformational projects like the large Hyundai EV and battery facility. While speculative construction drove the vacancy rate to 11.3 percent even as demand keeps up, the substantial volume of jobs and supplier investment generated by the area’s advanced manufacturing cluster should help place downward pressure on vacancy and encourage additional supply chain entrants over the next cycle.
Norfolk, Virginia, is uniquely oriented around port activity, military presence and ongoing infrastructure enhancements, such as deepening shipping channels and expanding road capacity. Over the past five years, the region’s industrial base expanded by more than 16 million square feet with notable build-to-suit and fulfillment center construction, including a major multi-story facility by Amazon. While vacancy, now at 7.5%, has increased as robust construction delivers, land constraints and gradual economic tailwinds underscore a likely return to balanced fundamentals in the medium term.
The New Hampshire market presents another alternative, offering both proximity to Greater Boston and superior cost economics. Despite relatively flat net absorption and a slight rise in vacancy to 6.2 percent, as of mid-2025, the region is positioned as a value-play for smaller users, contractors and light industrial tenants who are squeezed out of the pricier Massachusetts suburbs by rising rents and tight inventory. Investor attention has focused on off-market deals and value-add plays in anticipation of future supply-demand rebalancing as new projects reach completion.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.