Abandoned Industrial Sites Could Get A Second Chance As Manufacturing Demand Switches Industries

Billions of dollars in planned factory projects have been canceled or paused in the last six months, a development with the potential to pour cold water all over visions of new economic hubs in some of the country’s lower-profile corners.

But a new wave of projects in industries like pharma, tech and automotive are ready to refill the pipeline, keeping demand and dreams alive for the sites painstakingly selected and prepared for development.

“Companies don't want to be pioneers when it comes to site selection,” The Boyd Co. principal John Boyd Jr. said. “If a site is selected, even if the project doesn't happen, that's an enormous economic development accomplishment in and of itself. In all likelihood, it beat out several other sites based upon workforce, infrastructure, real estate, market access.”

Roughly $8.1B in projects have been canceled in the clean energy sector alone since November, according to Atlas Public Policy, a Washington, D.C.-based consultancy, largely brought on by economic uncertainty and President Donald Trump’s rescission of parts of policies like the Inflation Reduction Act. 

Tariff-driven uncertainty has led many companies to pause capital expenditure and infrastructure investments, especially for gigantic factories that wouldn't be finished until after Trump’s term even if they broke ground today.

But demand for factory development isn’t wavering, according to analysts, just on pause. Even with major developments on hold or canceled, sites with energy connections and infrastructure investments remain rare and valuable. 

The pharmaceutical industry has pledged billions to reshore drug production and expand plants in the U.S. as well as open new ones, with $170B in new manufacturing facility commitments this year alone from Johnson & Johnson, Eli Lilly, Merck & Co., Novartis, Roche and others.

The hungry data center market — especially after a string of major capital expenditures by big tenants like Amazon, Google, Meta and Microsoft, and a series of multimillion-square-foot projects proposed for Georgia alone — has zeroed in on these kinds of sites as well. 

Boyd believes dealmaking will resume its previous momentum when the administration starts announcing trade deals such as bilateral deals with countries like Japan or South Korea. Any additional federal action on taxes or regulations would make an impact as well. 

The loss of one tenant is usually met with the arrival of another that was waiting in the wings, Boyd said. As firms continue to calculate supply chain and material costs, they are strategizing where to open new facilities and waiting for more clarity in hopes tariff policy limbo starts working itself out. 

There is also a shortage of blank canvas sites with the necessary specifications, which include things like at least 250 acres, power connections and infrastructure hookups near big markets and transit. In Washington state, for example, there were about 40 such sites a decade ago, according to Patrick Boss, a site selection consultant who operates in the Northwest. Today, there are around six. 

In 2022, during a peak in the Arizona industrial real estate market, Anita Verma-Lallian sold a 214-acre parcel of land in Buckeye, Arizona, to Kore, a battery maker seeking to build a $1.2B plant. This January, Kore announced it was canceling the plant after a string of setbacks. But Verma-Lallian, CEO of Arizona Land Consulting, believes it will ultimately find the right tenants

“The current landscape for Phoenix is actually pretty good,” she said. “I think we have some macroeconomic things to get through, primarily around rates and tariffs. But when those two issues settle down, the market is going to be very strong.”

Likewise, Atlanta-area Coweta County Development Authority President Sarah Jacobs found out in January that a planned $2.6B Freyr battery plant on a 268-acre site near rail lines was canceled. She said it was unfortunate to lose what she considered a great partner and client, but it simply offered a chance to find a better tenant.

“They're not making more land,” she said. “So when you get something back in your inventory, it's like, bad news/good news. What made it attractive to Freyr will make it attractive to most any manufacturer.”

Existing factories aren’t immune from the upheaval in manufacturing. In Hazel Park, Michigan, a BorgWarner battery facility that announced its closure in February, affecting 188 jobs, isn’t a long-term worry for local officials.  

James Finkley, the city’s planning and community development director, said the BorgWarner plant only occupied 55K SF in the building, a former industrial park that also counts Amazon and LG as tenants. 

“It hasn’t been that difficult to fill this parcel or these buildings,” said Finkley. “I'm not too worried about either finding a new tenant or the existing tenant sort of expanding. 

Manufacturing and industrial clients seek out sites with infrastructure investments such as power connections, roads, and proximity to rail and other transport options. Initial project announcements often trigger nearby commercial and residential developments to accommodate a growing workforce, which further incentivizes other firms to see an abandoned site in a positive light. 

“From coast to coast, areas that have had a planned battery plant, for example, or solar project canceled because of a Department of Energy grant that's not going to come through, or weakened demand for [electric vehicles] or various other reasons, the data center industry really is the industry du jour,” Boyd said. 

But both the Coweta and Buckeye sites are targeting advanced manufacturing. The Atlanta-area site is well positioned for such use, and local officials are targeting more, higher-paying jobs, Jacobs said.  

Verma-Lallian said with the Taiwan Semiconductor Manufacturing Co. semiconductor plant coming to the Phoenix area, there is plenty of growth potential for advanced manufacturing plants in greater Phoenix. 

There are about 300 companies looking to come to the region, and Verma-Lallian said a lot of areas like the Kore site will be quickly absorbed. She said she has been in talks with local Buckeye officials and believes a few buyers are shopping around. 

Development authorities tend to seek out matches for these properties. There is still interest despite tariff uncertainty, with firms exploring options and evaluating sites, Jacobs said.

In Washington, Boss said there are a number of battery plants and other industrial developments — including some large manufacturers — seeking to relocate to Quincy, Washington, that have been put on hold because of this uncertainty. 

“It's hard to make a decision on building an $800M plant, yeah, if all of a sudden things change a year from now.”