Population Gains, Infrastructure Investments, and Labor Supply Drive New Industrial Hotspots

For many decades, ports, interstates, and intermodal hubs have anchored industrial demand. While these fixed assets remain important, workforce trends are also playing an important role in determining which markets are performing. “High labor availability and low costs can be a real advantage to companies as long as the infrastructure is there and the location makes sense,” says Hurvitz. Each of the markets below is featured in more detail in the report:

• Boise, ID is emerging as a fast-growing logistics and distribution hub, fueled by Micron’s multi-billion-dollar expansion, strong agricultural demand, and Idaho’s business-friendly climate.
  
• Anchored by federal facilities and a diverse economy, Albuquerque, NM has grown steadily with tight vacancy below 4% and strong demand drivers ranging from aerospace and advanced manufacturing to Amazon’s and Meta’s large-scale investments.
  
• Fueled by its strategic border location, nearshoring-driven manufacturing growth, and robust logistics infrastructure, El Paso, TX has expanded rapidly with rising vacancy from a surge of new supply, but its long-term fundamentals and demand drivers remain strong.
  
• Omaha, NE, benefits from a central location, strong labor force, and expanding data center and manufacturing base, which have driven sustained industrial demand, keeping vacancy at just 2.3% and attracting increasing interest from regional and national investors.
  
• Dayton, OH, has a strategic location, strong manufacturing and aerospace presence, and state-backed incentives, which are driving steady industrial growth, highlighted by new EV battery investments and sustained low vacancy.
  
• Anchored by aerospace, defense, automotive and distribution industries, the Huntsville, AL industrial market has expanded 26% in five years, with rising vacancy from new supply but sustained long-term demand supported by major employers and population growth.
  
• The Treasure Coast, FL, industrial market is emerging as a cost-effective distribution hub between South and Central Florida, with demand driven by rapid population growth and logistics activity, though a recent construction surge temporarily pushed vacancy higher before conditions began to stabilize.
  
• Driven by the Port of Savannah and Hyundai’s $7.6B EV megaproject, Savannah, GA has expanded faster than any industrial market in the U.S., with record supply and rising vacancy, but strong long-term demand supported by port activity, large-scale investment and a growing workforce.
  
• Fueled by the Port of Virginia, a large military complex, and ongoing infrastructure investment, Norfolk, VA has grown steadily with rising vacancy from new supply but durable long-term demand from port, defense, and logistics users.
  
• New Hampshire’s industrial markets offer a cost-effective, strategically located alternative to Boston, with growing demand for flex, light industrial and mid-size warehouse space driving rising vacancy amid constrained but expanding supply.

At the same time, overbuilding in some markets has highlighted the risks of rapid speculative development. Hurvitz suggests that markets with smaller industrial inventories can be more susceptible to large increases in vacancy, especially when developers deliver a significant amount of new speculative product in that market.

As a result, the next expansion phase for developers and investors will likely come from focusing on markets where infrastructure, workforce and available resources align to support long-term demand.

For more insights and thought leadership from Colliers, click here.