The Reshoring Ripple: How Tariffs Are Reshaping U.S. Industrial Real Estate

The U.S. industrial real estate landscape is undergoing a seismic shift. Reshoring—the practice of bringing manufacturing back to domestic soil—is on the rise, driven largely by evolving trade policies and escalating tariffs. As global supply chains face increasing scrutiny and costs, companies are reevaluating the long-term sustainability of offshore production. This trend is generating ripple effects throughout the industrial commercial real estate (CRE) market.

Tariffs Spark a Manufacturing Revival

A key catalyst behind the reshoring movement has been the imposition of tariffs on imported goods, particularly from China. Originally launched during the Trump administration and continuing with modifications under President Biden, these tariffs have made offshore manufacturing less cost-effective, pushing companies to explore domestic alternatives.

In response, major corporations are making significant U.S.-based investments. Pharmaceutical giants like Eli Lilly and Novartis have committed to building manufacturing facilities in the U.S. as a hedge against potential 25% tariffs on imported pharmaceutical products, aiming to improve self-sufficiency and reduce global dependencies.

The technology sector is following suit. Apple and Nvidia are setting up AI hardware factories in Houston, a move expected to reshape the city’s industrial future and signal broader interest from tech players in domestic production hubs.

CRE Implications: A Surge in Industrial Demand

With reshoring comes an increased demand for manufacturing, logistics, and distribution space. According to a report by JLL, companies pivoting away from Asia are now actively seeking industrial real estate solutions in the U.S. and Mexico to meet nearshoring goals. This includes not just production facilities, but also the broader supply chain support infrastructure such as third-party logistics centers and last-mile warehouses.

Cities with strategic logistics advantages are emerging as beneficiaries. For example, Chicago is positioned to gain from this manufacturing revival due to its central location and strong transportation network. The metro’s robust infrastructure could make it a prime reshoring hub as companies adapt to the new trade landscape.

The NAIOP Research Foundation estimates that reshoring could expand the U.S. manufacturing base by 6–13% over the next decade, requiring up to 500 million square feet of additional industrial space—a figure that could translate to significant opportunities for investors, developers, and brokers alike.

Challenges to Watch: Uncertainty and Costs

Despite its upside, the reshoring trend also comes with notable challenges. One of the biggest is policy volatility. Sudden changes to tariff structures and trade agreements can complicate long-term planning and make reshoring projects riskier. As The Financial Times notes, many companies are hesitant to invest fully in domestic production due to ongoing uncertainty about future tariffs and regulatory shifts.

Construction costs are also rising. Tariffs on steel, lumber, and other imported materials have inflated the costs of industrial development, squeezing margins and delaying projects. This is making speculative development riskier, especially in secondary markets.

Looking Ahead: Positioning for Opportunity

Despite the hurdles, reshoring is poised to remain a powerful force shaping industrial CRE in the coming decade. Developers and investors who position themselves near ports, intermodal hubs, and population centers—particularly in markets with available labor and favorable zoning—are likely to see increased demand.

For brokers and advisors, staying ahead of this shift means understanding how tariff policy and supply chain realignment intersect with real estate fundamentals. The trend is clear: the return of manufacturing to U.S. soil is no longer speculative—it’s here, and it’s transforming the industrial property landscape.