Space‑age technology that once sounded out of this world is becoming a reality — and taking up huge swaths of real estate in the process. 

With $11.3B in fresh venture capital funding to firms like Varda Space Industries, Sierra Space and Astranis in the first half of the year and a shift toward mass production, companies are snapping up everything from old toy plants to megacampuses. They aim to support satellite fabrication and evolving technologies like low Earth orbit tourism, asteroid mining and in-space manufacturing.

“Real estate goes hand in hand with their success,” said Mac Burridge, JLL managing director in charge of advanced manufacturing in Los Angeles. “There’s no other industry like it, where real estate is such a massive catalyst to the future success of a company.”

The influx of capital from investors and wealthy founders like Elon Musk is fueling a shift toward a capital- and procurement‑heavy cycle in which production volume outweighs technical novelty, driving greater need for real estate. 

Seventy-eight percent of the global space economy is private, according to the Space Foundation, led by companies like SpaceX and Blue Origin. Private venture capital investment in space companies globally is expected to reach a record $100B this year.

But public funding still has a place in space. The One Big Beautiful Bill Act allowed for additional municipal bond funding for spaceports, and a proposed House bill includes $400M for NASA’s commercial low Earth orbit destinations program.

The industry’s rate of growth is expected to take off from here. The U.S. Department of Transportation projects that there will be 10,000 annual launches and reentries in the U.S. by 2035, compared to 250 in 2025.

To reach that number of launches, companies are taking down real estate at a breathtaking clip.

Varda Space Industries in March leased a 205K SF former Mattel factory in El Segundo, California. A facility that used to produce Hot Wheels and Barbies will be repurposed to manufacture Varda’s spacecraft, the Los Angeles Times reported.

Varda makes automated labs and satellite platforms that are launched into orbit. As they float in microgravity, the labs grow molecular crystals for use in pharmaceuticals, according to the Times.

The former toy factory is Varda’s second location in El Segundo, part of LA’s South Bay, where a stable of longstanding aerospace companies provided the foundation for one of the country’s hot spots for space startups. The seaside town was the original home of SpaceX.

“It's very akin to like, if you're an AI company, you have to be in San Francisco, or at least the Bay Area, to be taken seriously,” Burridge said. “And I think that's true with most aerospace and defense companies. They have to be in Southern California because of the talent that is based here.”

That reputation is fueling already intense competition for industrial and advanced manufacturing real estate in the area, especially as other users, such as weapons manufacturers, also jockey for square footage.

Roughly a third of the industrial leasing volume in greater LA went to the South Bay in the third quarter, according to CBRE. The submarket has posted 2.5M SF of positive net absorption so far in 2026, accounting for roughly half of the total across the region.

The share of aerospace and defense leasing in greater LA industrial rose to 11% in the second quarter from a 2% average between 2015 and 2024, according to Newmark.

Burridge is tracking 5M SF of advanced manufacturing demand in the South Bay, a significant escalation over the last 12 months. Some tenants are signing leases 12 months out because of wait times.

One of the reasons for delays in accessing space is a lack of availability of adequate power. Most companies seek higher-than-average power capacity for manufacturing, and new spaces in the South Bay can take up to 24 months to get sufficient hookups, according to Martin Pupil, partner and executive managing director at Stream Realty Partners. 

“There are no existing buildings left that can accommodate them,” Pupil said. “They've gobbled everything up.”

Other long-term space hot spots like Texas and Florida’s Space Coast are also seeing a surge of new projects.

In Brevard County, Florida, Hines just broke ground on the second phase of the Space Coast Innovation Hub, which will bring 1.1M SF of manufacturing and logistics space to a 100-acre site meant to support launch activity and manufacturing near Cape Canaveral. 

The soon-to-commence third phase will be focused on industrial manufacturing, similar to several other projects expected to break ground soon in the area, according to Mike Moss Sr., Lightle Beckner Robison principal and director of its industrial team. 

Those include the NASA Causeway Logistics Center, a 307K SF industrial project; Amazon’s 24-acre Project Satellite facility in Titusville, Florida; and an 830K SF manufacturing facility for Blue Origin.

Earlier this month, Blue Origin announced a 1.3M SF, $550M satellite manufacturing campus in Hutto, Texas, promising 2,000 new jobs. 

Space companies consider labor pools, space availability and power constraints when choosing a site, but they are also common targets for economic development authorities with incentive money to spend.

“It's not like warehouse distribution, which is easy to migrate,” Pupil said. “As these space firms migrate, I think the people who will win are those who can provide them great incentives.”

The strategy worked in Vermilion Parish, Louisiana, which won a $100B SpaceX Starbase launch site in August, with the help of a $27B incentive package from state and local governments.

SpaceX intends to use the facility to expand launch capabilities for its Starlink satellites.

The company’s decision has also catalyzed development of alternative launch providers and the associated spaceport facilities, warehouses and commercial space that accompany these facilities, according to Burridge. 

Deloitte site selection experts said industries such as space-based internet have matured — 60% of satellites now in orbit support such services — and predict commercializing low Earth orbit space tourism and in-space manufacturing aren’t just sci-fi fantasy but “the business models that today's site selection decisions are being made to serve.”  

The jobs and economic activity that come with space companies establishing a presence also draw other development types, especially hospitality. A $14M Marriott hotel is underway in Brownsville, Texas, near another SpaceX Starbase.

Driftwood Capital has deliberately invested in hotel real estate surrounding the Florida Space Coast, building up a portfolio that includes the Westin Cocoa Beach Resort & Spa, a $420M project set to open next year, in part to capture the demand from workers and tourists drawn to launches.

“You thought that you were hearing Star Trek with all these fantasies about mining asteroids or collecting solar power in fields in space or creating data centers in space,” Carlos Rodriguez Sr., executive chairman of Driftwood Capital, told CNBC. “When you hear all that, you start thinking, what are these people smoking? But, quite frankly, it’s becoming a reality faster than anybody envisioned.”