Flight to quality, greater focus on real estate costs, and an increase in domestic manufacturing were among the themes that emerged from CBRE’s U.S. Industrial & Logistics Occupier Survey.
The surprise? Despite the noise around power availability and artificial intelligence, these issues weren’t top of mind for industrial occupiers. Specifically, while 50% of respondents were somewhat concerned about power availability and grid reliability, less than 3% said that power was among their top concerns when it came to challenges or site selection.
“This was surprising, because our thesis was that power was becoming one of the top priorities for occupiers looking to expand,” CBRE’s vice president, head of industrial research, Americas, James Breeze told Connect CRE.
The Actual Challenges
The survey reported that one concern in 2026 was occupancy-related costs, which impact decision-making, business operations and location strategies. In response, industrial owners and landlords are increasing incentives to boost renewals, while starting the process earlier in the terms.
“In 2025, renewal lease terms increased by 15.2%,” Breeze added. “We expect terms to increase in 2026 as landlords focus on occupancy.”
Along those lines, 67% of respondents said that more than 25% of their leases will expire over the next 36 months, totaling over 1.7 billion square feet.
Manufacturing Demand Increases
Over 50% of companies with U.S. manufacturing operations told CBRE that they’re actively expanding or plan to do so in the next 36 months. One reason is to protect domestic inventory to serve American consumers, rather than to avoid tariffs.
Another driver of U.S. manufacturing expansion is the increasing fragility of the global supply chain. “Increasing domestic manufacturing is a way to mitigate that risk,” Breeze explained.
Location Still Matters
Real estate is a hyper-local business, and the survey found that the Southeast is a target region for 36% of respondents planning to grow their operations.
“This is due to a growing population, which gives manufacturers a larger labor base, lower land costs for development, pro-business state governments, incentives and access to seaports to gain access to raw materials,” Breeze said.
He went on to say that markets near logistics hubs like Greenville, SC and Savannah, GA, will be the targets for expansion. Additionally, as manufacturing growth correlates with increasing data center demand,” we expect markets in Virginia to see further growth in manufacturing,” Breeze commented.
The Takeaway
The report said that the survey results “generally correlate with CBRE’s outlook for the industrial market,” pointing to continued flight to quality, greater use of third-party logistics, and an increase in domestic manufacturing.
Even with concerns about costs, “the survey points to a cautiously optimistic outlook for industrial real estate,” Breeze said.
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