The Next Tier of Industrial Winners Emerges Along North-South Rails

"We are seeing the increasing share of the manufacturing leasing activities going forward, and particularly it is going to be concentrated on Louisville, Nashville, Chicago, Detroit and Kansas City," Chin said, adding that "some of the cities never be a bright spot for that leasing activity for industrial but given this reshoring activities and manufacturing coming back, those cities are getting more and more traction."

Those comments highlight a change in how industrial investors and occupiers are evaluating location risk. In markets like Louisville and Nashville, freight rail connectivity and highway access have long been known quantities, but they are now being viewed through the lens of continental North–South trade patterns rather than purely domestic distribution.

That aligns with comments from host Spencer Levy, who noted that in Columbus, local leaders were focused on a railroad "from Mexico to Canada, which goes right through the middle of America," and argued that investors should "follow infrastructure when they find opportunities."

Chicago and Kansas City already sit at the crossroads of major east‑west and north‑south rail corridors; Detroit's proximity to Canada and existing automotive base ties it directly into U.S.–Mexico–Canada trade flows. As friend‑shoring and near‑shoring make North America more of a cohesive production bloc, those connections become more important in underwriting long‑run rent growth than proximity to any single coastal port.

Labor Pools as a Rent‑Growth Anchor

Workforce depth is the second pillar in that recalibration. Russo framed long‑term output growth as a function of only two variables: labor and productivity.

"As you think about the medium run and long run ability for an economy to grow, there's only two ways to have more economic output, and that is one, to have more labor, or two, to make it more productive," he said, noting demographic challenges across the developed world and relatively better, but still constrained, population dynamics in the United States.

Midwestern and Southern metros like the ones Chin highlighted offer a mix of manufacturing heritage, available labor pools and, in many cases, more affordable housing and cost of living than coastal competitors. That combination gives occupiers a way to square higher capex and operating costs with the need to staff facilities, and gives investors a more durable basis for projecting sustained tenant demand beyond the initial lease term.

Infrastructure Investment as Underwriting Input

Infrastructure investment, public and private, is reinforcing those advantages. Russo emphasized that when economists talk about capital in a regional growth context, they are often referring to "roads that can get goods to people where they need to be," as well as "basic airport structure, shipping lanes" and domestic waterways.

Levy linked that point back to the interior rail network and airport improvements, arguing that places with upgraded infrastructure "can improve their desirability as locations for investment to the extent that they improve the infrastructure and capital that they have in order to make that labor that's productive and then can grow."

For markets such as Louisville, Nashville and Kansas City, that means recent and planned investments in intermodal yards, airport cargo capacity and highway interchanges are not just public works—they are underwriting inputs for rent growth assumptions over a 10‑15 year span.

Columbus sits at an interesting intersection of these themes. While Chin did not list it among his reshoring standouts, Levy said that when he was in the city, "they talked about the railroad from Mexico to Canada," underlining how North–South freight connectivity is now central to local economic development narratives.

The region is also tied into semiconductor and high‑tech manufacturing supply chains through large‑scale projects in nearby markets, with Chin describing trade talks in Dallas organized by Taiwanese tech supply chain companies seeking to support TSMC's U.S. expansion and noting that suppliers were "coming here to Texas to provide the support for TSMC, the ecosystem."

That kind of ecosystem logic—suppliers clustering around an anchor manufacturer—applies equally to Midwest and Ohio Valley markets positioned along the same trade and talent corridors.

Supply Constraints and Industrial Pricing

For investors, the combined effect of these forces is starting to show up in underwriting models. With financing costs still elevated and new construction constrained by higher land, labor and materials prices, the traditional supply response to rising demand has been muted.

Chin described a broader imbalance between demand and supply in commercial real estate, saying that "we do see some imbalance of a demand and supply. We don't [have much] suitable supply in the commercial real estate spaces."

In industrial, that means manufacturing tenants are bidding for a limited universe of appropriate sites in a subset of inland markets, and existing stock in those locations can command stronger rent growth than macro conditions alone might suggest.

At the same time, Russo cautioned that high‑profile shifts in production geography are unfolding amid modest aggregate growth. He said consensus forecasts point to the U.S. economy "struggling to maybe get to 2% growth" over the next year or two and noted that even if financial conditions improve and short‑term rates move from "restrictive" toward "neutral," the broader environment will not resemble the easy money era that preceded the recent tightening cycle.

That context matters for long‑term rent assumptions in up‑and‑coming markets. Investors cannot simply extrapolate short‑term outperformance into a sustained double‑digit growth story. Instead, the emerging consensus is that inland freight hubs with strong workforce and infrastructure fundamentals will post steadier, less volatile rent growth, underpinned by real changes in supply chains rather than by cyclical booms.

Resilience and the Case for the Heartland

Behind the optimism on specific markets is a broader confidence in the U.S. economy's ability to absorb shocks and adapt. Russo called the resilience of the U.S. system one of its "amazing features," saying it has repeatedly withstood "very large shocks" while continuing to grow.

Chin, looking specifically at real estate, argued that 2026 could mark a turning point for capital, saying that "real estate hasn't been so cheap for the last 20 years" relative to other asset classes and that the coming years should be "a good time to look in the commercial real estate, particularly here in the U.S."

For industrial investors, the reshoring and friend‑shoring wave into Louisville, Nashville, Chicago, Detroit, Kansas City and Columbus is one of the clearest, geographically specific expressions of that resilience—and one of the few places where a slow‑growth macro narrative coexists with compelling prospects for long‑run rent growth.