**Understanding Reshoring and Industrial Space Demand**
In early April 2025, President Donald Trump issued Executive Order 14257 titled “Regulating Imports With a Reciprocal Tariff To Rectify Trade Practices That Contribute to Large and Persistent Annual United States Goods Trade Deficits.”
At the same time, the President declared what he dubbed “Liberation Day,” stating that reciprocal tariffs would encourage companies to bring manufacturing back to the United States.
Many assumed this move would prompt American companies with operations overseas to immediately return stateside, investing in new facilities and domestic job creation. However, experts interviewed by Connect CRE stressed that reshoring is not new—and it’s a long-term process, not an overnight shift.
“Reshoring has been contributing to steady baseline industrial demand, particularly for manufacturing-adjacent and regional distribution space,” said Jordan Nathan, Head of Corporate Investments at Faropoint. “But it hasn’t been sufficient to offset the volume of new supply delivered over the past few years.”
**Reshoring Resurgence: Already Underway**
Reshoring—the process of bringing manufacturing operations back to the U.S.—is the opposite of offshoring, a trend that had dominated the industry since the mid-20th century. At that time, companies moved production to lower-cost countries. But rising costs abroad and the pandemic’s exposure of global supply-chain vulnerabilities have brought many manufacturers back home or to nearby countries in a process also known as nearshoring.
“Reshoring, nearshoring, and supply-chain diversification continue to support industrial demand, particularly for manufacturing, distribution, and logistics space in select U.S. markets,” said Ryan Butler, Regional Managing Director at Northmarq.
Since Liberation Day, developments have been mixed. A KPMG survey conducted in October 2025 revealed that while 63% of companies were considering reshoring their operations, only 10% had taken concrete steps.
Jeff Thornton, Executive Vice President and Head of the Central Region at CenterPoint, observed a slowdown in industrial leasing after Liberation Day. “Tenant decision-making was slow,” Thornton said. “We saw a definite decline in new deals, renewals, and expansions.” However, activity eventually picked up as companies finalized strategic decisions. “Leases started to pick up, and absorption started to increase,” he noted.
Elizabeth Holder, an industrial senior analyst with JLL, added that nearshoring is also being fortified by growing consumer demand and corporate investment. “The tangible effects of nearshoring are visible as government incentives continue to accelerate the development of U.S.-based manufacturing options,” she said.
**More Than Just Factories**
Manufacturing involves more than just returning factories to U.S. soil. It also requires a robust infrastructure that includes skilled labor and access to quality materials.
The KPMG survey indicated that tariffs have driven up material costs, leading some companies to pause hiring. However, there’s been a shift toward investing in workforce development, with employers offering specialized training to enhance employee skills.
Reliable logistics and optimized supply chains are essential to the success of reshoring. About 62% of KPMG survey respondents reported that they were actively reconfiguring their supply chains to improve efficiency.
BGO’s Steve Reents, Managing Partner and U.S. Chief Investment Officer, said he wasn’t surprised by the findings. “Tariff uncertainty has led to overall increases in logistics and transportation costs,” he explained. “Supply-chain diversification is reshaping how logistics space is utilized and where it’s located.” According to Reents, demand for tech-enabled industrial facilities that support faster regional fulfillment has accelerated since the pandemic.
**Looking Ahead**
Reents believes reshoring, nearshoring, and supply-chain diversification will continue to significantly impact industrial real estate demand in 2026. “These are structural trends rather than short-term spikes,” he said, emphasizing demand growth for modern industrial warehouses and advanced manufacturing facilities.
Thornton concurs. He expects continued high demand for manufacturing, logistics, and warehouse space in major port markets like Southern California, Savannah (Georgia), and the New York/New Jersey region. Inland ports such as Dallas, Chicago, and Atlanta are also poised for growth.
Reshoring will also affect raw material providers and their logistics networks. Holder pointed out that third-party logistics (3PL) users are expanding rapidly to meet the demands of domestic manufacturing and booming e-commerce activity.
However, the availability of labor may be a constraint. “The competition for skilled labor, from specialized warehouse workers to construction tradespeople, will likely intensify,” said Holder. “This could place upward pressure on wages and delay some project timelines.”
As reshoring continues its measured advance, one thing is clear—its influence on industrial real estate is both significant and long-lasting.
