Federal incentives, global shifts and renewed efforts to bring supply chains stateside have caused U.S. manufacturing construction spending to triple since 2021. According to the latest CommercialEdge industrial report, 100 million square feet of industrial space has been delivered since 2022 with another 100 million square feet currently under development. This surge is transforming the industry as semiconductor, electric vehicle (EV), and battery mega projects create ripple effects — attracting suppliers and logistics hubs to regions like the Southeast and Sunbelt.

For instance, in the Savannah, Ga., and Hilton Head, S.C., area, Hyundai’s $5.9 billion, 17 million-square-foot EV plant (partially operational since October 2024) has sparked nearby investments from companies such as Daechang Seat Company and Ecoplastic Corporation. Further projects are also in the pipeline.

“It’s not only the initial boost in activity that we see by these semiconductor, EV, and battery super projects, but the supportive projects downstream that have helped buoy the construction pipeline and economic development of the primary development,” said Peter Kolaczynski of CommercialEdge.

Meanwhile, Charlotte, N.C., has emerged as a key hub. Nearly one-third of its 5.95 million square feet under construction — almost 2 million square feet — is earmarked for manufacturing. Specifically, a repurposed Philip Morris site in Cabarrus County now anchors more than $1 billion in planned investments from companies including Eli Lilly, Red Bull, and Ball, while Bosch’s power tools facility in Lincolnton and Corvid Technologies’ expansion in Mooresville further underscore the market’s growing role.

Southern Markets Dominate Industrial Pipeline

On a national scale, Southern markets occupied three of the top four spots in industrial development with Dallas-Fort Worth at the forefront, reporting 22.56 million square feet under construction. Phoenix follows with 17.67 million square feet, while Houston and Memphis, Tenn., have 13.17 million and 11.72 million square feet, respectively. Although Dallas’ pipeline is down by approximately 8 million square feet year-over-year, it nevertheless saw a month-over-month increase from 18.9 million square feet at the end of December.

At the other end of the spectrum, Baltimore has one of the smallest pipelines among major markets. However, its construction activity more than doubled in the last year, rising from 920,000 square feet in January 2024 to 2.5 million square feet in January 2025. Nationally, 346.2 million square feet of industrial space was under construction as of January 2025, representing about 1.7% of the nation’s total inventory.

Rent Growth Accelerates in Port & Southeastern Markets

In January, national industrial rents reached $8.35 per square foot — a 6.8% increase from the previous year. In particular, port-adjacent and Southeastern markets recorded the strongest gains with New Jersey up 10.9%; both Inland Empire, Calif., and Miami rising 9.2%; Nashville, Tenn., at 9.0%; and Atlanta at 8.6%. And, although increased supply has the national vacancy rate at 8.0%, strong demand for modern, high-quality space is keeping rents on the rise.

At the same time, new leases now command a premium of about $2.22 per square foot above existing rates, with Bridgeport, Conn., and Miami leading at $5.22 and $4.96, respectively. Bridgeport also ranked as the second-tightest industrial market nationwide with a 4.2% vacancy rate — trailing only Kansas City, Mo., at 3.2%.

Sales Volume Shifts Inland as Port Markets See Declines

In 2024, industrial property sales totaled $69.2 billion with properties averaging $129 per square foot. Dallas-Fort Worth led with nearly $6 billion in transactions, while Houston and Phoenix each recorded about $3.4 billion. In contrast, Los Angeles registered $3.2 billion and fellow Californian the Inland Empire’s sales dropped to $2.4 billion — a 45% decrease from its 2023 peak — reflecting a shift from traditional port markets to inland hubs offering better cost and infrastructure advantages. In fact, the Inland Empire saw a 5.3% increase in its average sale price per square foot, while Los Angeles experienced a 2.5% decline. Lastly, the Bay Area continued to command a premium at $414 per square foot.

For more analysis across all major industrial markets in the U.S., see CommercialEdge’s original report.