As we move into the second quarter of 2025, the industrial real estate market continues to navigate a fascinating period of transition. Recent data from Colliers indicates national vacancy rates hovered near 6.8% at the end of 2024, while in the Southeast, vacancy rates are slightly higher, around 8%. We view this as a timely opportunity for businesses to strategically position themselves in key growth markets.
Manufacturing across multiple sectors is poised for growth in response to reshoring initiatives and recent tariff policy adjustments. Industries such as automotive, industrial machinery, electronics, consumer goods, and chemical products are among those expected to respond strategically to tariff impacts. According to Newmark Research, Southern states captured more than $131 billion in manufacturing construction investments last year alone—more than the rest of the country combined. This impressive influx positions the Southeast favorably, as manufacturers proactively consider their options to minimize future tariff exposure and optimize industrial operations.
We’ve also experienced strong local demand unrelated to tariffs, illustrated by our recent activity in Mocksville, NC. Our newly completed 130,000-square-foot building leased quickly to a local high-quality manufacturing company. This successful outcome was made possible through the valuable introduction provided by Terry Bralley, our local economic development contact. Another newly completed adjacent 152,000-square-foot building remains available, offering immediate access to Mocksville’s strategic location along the I-40 corridor.
Separately in Cookeville, TN, two newly completed buildings are now available in our Highlands Business Park. Cookeville’s prime location between Nashville and Knoxville, combined with its skilled workforce and competitive operating costs, makes it highly attractive to manufacturers and distributors preparing to address future tariff impacts.
Additionally, we’re excited to soon break ground at our SouthPoint Business Park in Grenada, MS. Strategically positioned along I-55 between Memphis and Jackson, Grenada features competitive pricing, stable utility rates, and a manufacturing-experienced workforce. This positions Grenada ideally for businesses navigating tariff changes and seeking operational efficiency.
Looking ahead, forecasts suggest industrial demand will rebound by late 2025, supported by ongoing reshoring trends and improving economic conditions. With the construction pipeline tightening significantly—down nearly 53%, according to CommercialEdge—this could be the ideal moment for businesses to secure strategically located facilities, particularly in dynamic regions like the Southeast.
We’re optimistic about what lies ahead and remain dedicated to partnering with businesses as they adapt and thrive through these market transitions.
