Up to 592.5 million square feet of industrial space is currently under construction in the U.S. High demand across the country has seen multiple commercial projects break ground this year, while many more are in the planning phase.
With that in mind, the CommercialCafe team has analyzed the top U.S. markets for industrial growth and also looked at the largest industrial developments that are in the pipeline for 2022. Here are their findings:
South: Dallas-Fort Worth Leads a Nationwide Industrial Expansion
For the second year in a row, the Dallas-Fort Worth metropolitan area is set to see the most significant industrial expansion of all the markets studied. With a projected 38 million square feet of industrial space to be completed this year, the metro continues its decade-long upward trend — a trend that has seen industrial development grow by more than 208 million square feet over the past ten years.
It’s no surprise given that the Dallas-Fort Worth area serves as one of the major logistical hubs of the South. In addition, the metroplex has become a high-tech manufacturing facilities hub, so the ever-growing industrial expansion suggests both these sectors will continue to thrive.
Giga Texas to Be the Largest Industrial Completion of 2022
Also located in Texas, Tesla’s Giga Complex looks to be the most significant industrial completion of 2022. The project boasts an incredible 4.28 million square feet of industrial space in Austin, making it far larger than any other property in the top ten.
The grand opening has been delayed from Q4 2021, but work has already commenced in the giant factory, albeit on a limited basis. In addition to producing the new Tesla Cybertruck and Semi models, the gigantic facility will also serve as Tesla’s corporate headquarters.
West: Phoenix Takes the Number 2 Spot
Phoenix is close behind DFW in terms of industrial growth, with 36.3 million square feet currently under construction. This follows a spike in demand throughout the city, which has become a robust regional distribution and manufacturing center in recent years. To combat low vacancy rates, several investments have been made over the last few years.
Heading west, LA’s Inland Empire region takes the fourth spot for markets with the most industrial development underway. Following a period of record-low vacancies, LA’s major logistical satellite is due to see an expansion of 25.9 million square feet of industrial space.
Midwest: Indianapolis and Chicago Boast Major Expansions
Meanwhile, two Midwest markets make the top five. Indianapolis ranks as the third-largest industrial market, boasting 26.9 million square feet of space currently under construction. This major logistical hub has seen interest from several high-profile corporations, notably Amazon. The company has provided a welcome boost in employment for the distribution and logistics sectors throughout the metro area.
Taking the fifth spot, Chicago is expected to see a growth of around 25.9 million square feet of industrial space this year. This is a welcome addition to the largest metro in the Midwest, even though it’s slightly behind Indianapolis.
Amazon Dominates Top Industrial Completions of 2022
Seven of the top ten industrial completions for 2022 are owned or leased by Amazon. While Tesla’s Giga Texas manufacturing plant takes the number one spot, the next three positions are 3.8 million square foot Amazon warehouses in Michigan, Virginia and Massachusetts.
Amazon strikes again in fifth place with the redevelopment of the former Cortana Mall in Baton Rouge, LA. This is set to be transformed into a 3.5 million square foot warehouse for the online retailer. Moreover, Amazon has two other fulfillment centers in the top ten, one in Canton, MS, and the other in Pooler, GA.
This trend is a continuation of last year when all of the top ten largest industrial completions were owned or leased by Amazon. At 3.86 million square feet, 7001 Vollmer Road in Matteson, IL, was the largest. Clearly, the global online retailer drives a huge demand for industrial space, consistently building some of the biggest warehouse and logistics facilities in the country.
Additional Industrial Projects in the Pipeline
While Amazon continues to dominate, they’re not alone in demanding large industrial facilities. The 2.8 million square foot Ultium Cells LLC Battery Plant owned by General Motors also makes the list — taking the number eight spot, it sees a significant addition of industrial space in Warren, OH.
Walmart is responsible for the only distribution center on the list not owned by Amazon. Their 2.77 million square foot Ridgeville Industrial Campus in Ridgeville, SC, proves that there is still a need for huge industrial facilities that serve traditional retailers, as well as online ones.
Industrial Real Estate Continues Upward Trend
Markets across the U.S. have seen a massive influx of industrial projects underway, as well as completed. Notably, more than 45 million square feet of industrial space had been delivered by the end of February 2022 alone. And increased investments into industrial real estate from several large corporations across various sectors hint that the trend will continue for some time.
This is excellent news for business centers across the country. Manufacturing, logistics, transportation and many other sectors are being revitalized as new job opportunities are created by industrial projects nationwide.
Interested in the office or shared spaces market in the cities mentioned in this study? Check out the links below: