Onshoring Is Fueling Industrial CRE Optimism. Will The Manufacturing Revival Stick?

A Brazilian manufacturer is spearheading a new plant in a sleepy rural town 200 miles south of Atlanta.

Grupo Vialume will invest $4.4M over the next year retrofitting an existing facility in Colquitt to manufacture traffic markers and reflective lenses, Georgia Gov. Brian Kemp announced Thursday.

Vialume CEO João Paulo Moura has said the firm was lured to Georgia by tax incentives and a stable U.S. dollar, but in the background, President Donald Trump’s tariff policies may also have motivated Vialume to shift production to the U.S.

Vialume is just one example of a wave of 2025 announcements of global manufacturing returning or investing in the U.S. Supply chain disruption and geopolitical uncertainty in the last few years have motivated large-scale companies to rethink the placement of their manufacturing bases, commercial real estate experts told Bisnow.

In a November study, global real estate developer Hines projected that $1T worth of additional manufacturing construction will be planned between now and 2030. The onshoring trend that began under the Biden administration with the bipartisan passage of the CHIPS Act of 2022 has quickly accelerated with the second Trump administration’s tariff threats.

“In the U.S., there is clear evidence that government policy and geopolitical shifts have fueled outsized manufacturing construction spending, relative to history, and we believe that will continue as re-shoring ramps up,” Hines said in its report. 

As these new factories are constructed to make everything from computer chips to ketchup within U.S. borders, they likely will, in turn, drive further demand in the industrial sector as companies reconfigure or build out logistical networks. 

Hines analysts predict this activity will generate 430M SF of new warehouse and logistics property demand in that time span. 

“We think that re-shoring alone could increase overall warehouse demand over the next five years by roughly 35%,” the analysts said in the report.

That number might be even larger when all is said and done. Avison Young has tracked $3.5T in manufacturing projects in the U.S. since January, National Industrial Director Peter Kroner said. 

“Billion-dollar-plus investments that were first broken ground under the Biden administration, we're starting to see those deliver across the country. And with that, we're starting to see complementary demand,” Kroner said.

Onshoring efforts have been boosting the U.S. industrial real estate marketplace since 2020. Back then, manufacturers sought out 26M SF of industrial space, according to JLL’s 2025 industrial tenant demand study. In 2024, manufacturers wanted nearly five times that, or 124M SF of industrial space. 

Ultimately, JLL is projecting that manufacturers will seek more than 135M SF this year and next.

“Manufacturing now represents over 19% of total demand. This manufacturing growth is generating new jobs and expanding supplier ecosystems, with effects expected to influence industrial market segments for the foreseeable future,” JLL Senior Research Manager Kelsey Nastasi said in the report.

The White House has touted a litany of company onshoring announcements since Trump took office for a second term, including Johnson & Johnson’s March announcement of spending $55B in four years to modernize its manufacturing capacity in the U.S. and building a 500K SF biologics manufacturing plant in North Carolina that broke ground earlier this year. 

Not all of these deals and announcements were a direct result of the Trump administration’s efforts or policies, nor is the priority to encourage manufacturing new. Each president since the Nixon administration has attempted to encourage revitalization of the country’s manufacturing base. 

Some of the onshoring efforts listed by the Trump administration began during the presidency of Joe Biden, his predecessor.

The Trump administration’s list, for example, includes the Lego Group breaking ground on a $366M, 2M SF distribution center in Prince George, Virginia, in November to support its $1B plant set to open in 2027 in Virginia. The project was first announced in 2022.

Overall, JLL is tracking more than 600 manufacturing investment announcements since 2020.

JLL Vice Chairman Greg Matter said onshoring has been a priority for Trump and Biden, whose CHIPS Act helped lure semiconductor and electric vehicle production to the U.S. 

“You can hear clickbait responses, but the realities are, deep down, this is a bipartisan effort,” Matter said. “I believe both parties have come together on something, and manufacturing seems to be it.”

Some interviewed said the onshoring wave may be more hype than reality, as geopolitical and domestic political uncertainty affects decision-making and bottom lines. The same instability that encourages some manufacturers to reshore in the U.S. may drive others to hold off on such capital investment.

In its 12th annual reshoring index study examining 2024 reshoring efforts, consulting firm Kearney found that U.S. manufacturing output increased by just 1% year-over-year. Imports from 14 Asian countries grew 10% in that time frame.

The firm found that reshoring efforts and nearshoring efforts actually decreased by 311 index basis points. Analysts cited tariffs, trade tensions, supply and demand for space, and market speculation as factors wreaking havoc on manufacturing output in the U.S.

There was a 15% year-over-year increase of CEOs surveyed who said they wanted to reshore to the U.S., according to Kearney. Half of those CEOs said they wanted to do so because of political tensions.

However, those intentions to reshore haven’t yet shown up as action, Kearney analysts said.

“This decline should not be interpreted to mean reshoring is going away, just that expectations for the strategy need to be tempered by market realities,” Kearney partner and study co-author Patrick Van den Bossche said in a press release. 

Lauren Pittelli, a principal with Baker Logistics Consulting Services, said the latest round of tariffs has forced manufacturers to reevaluate capital decisions, especially around their warehouse and industrial footprints. This was particularly true for companies that need steel and aluminum. 

“I have to say, honestly, I have not seen any moves to onshore activity other than some of the manufacturing that was announced as part of the CHIPS Act,” Pittelli said. “I feel for my clients. They’re all facing increasing costs that were totally unanticipated. And the problem is nobody knows what is coming next.”

Avison Young also found that manufacturing construction spending pulled back year-over-year in July from $240M to $223M as election uncertainty and federal policy uncertainty hammered project groundbreakings.

Of course, changes in government policy take time to fully impact the private sector's investment strategies when it comes to global manufacturing.

For example, Kroner said federal incentives in Trump’s One Big Beautiful Bill Act, including changes in the tax code favorable to investment in manufacturing, will encourage companies to break ground on new plants and facilities. He said he expects groundbreakings to pick up because of the law in the second half of 2026.

While geopolitical turbulence may have stalled some capital decisions in the short term, that turbulence may underscore the need to onshore more manufacturing capacity to the U.S., which in turn will feed industrial demand, CBRE Senior Managing Director Seth Martindale said. 

Continued global uncertainty will likely remain, Martindale said.

“I don’t see geopolitical issues calming down anytime soon,” he said. “So I think those risks are always going to be there.”