Property investors are attempting to seize on the manufacturing revival taking place across the country, particularly in the Sun Belt.
Investors are looking to buy or build warehouses, offices, hotels and multifamily properties near factories under construction, the Wall Street Journal reported. There’s plenty of opportunity, as nearly half a trillion dollars have been committed towards new factories, according to Green Street.
Property investors are counting on the manufacturing hubs to create jobs and therefore a need for homes, retail and more.
On the north side of Phoenix, the Taiwan Semiconductor Manufacturing Company is developing a $65 billion chip fabrication complex. An affiliate of Mack Real Estate Group and McCourt Partners stands ready to capitalize, purchasing more than 2,300 acres around the site for housing, hotels, restaurants and offices.
Homebuilders are jumping into the Phoenix market too, led by Lennar and Mattamy Homes.
Other notable hubs include a $5.6 billion electric pickup truck plant being developed by Ford and SK On in Tennessee and Micron Technology’s chip factories near Syracuse, where Guy Hart is planning to redevelop the Great Northern Mall with 1,700 apartments and a handful of hotels.
“Competition for land has become pretty intense,” Mehtab Randhawa, global head of industrial research at JLL, told the Journal.
Drawbacks for property investors include interest rates — though they are expected to ease soon — as well as infrastructure concerns and the possibility of production delays at the manufacturing projects. If factory developments stall, property investors could be left with funds sunk in desolate swaths of land.
Whether the manufacturing boom is sustained is another question. Federal subsidies and loans are helping to fund many of the manufacturing projects via the 2022 CHIPS and Science Act, but presidential candidate Donald Trump has been critical about subsidies going to foreign manufacturers in the United States.
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