The U.S. industrial real estate market is entering a more selective phase. No longer riding the wave of pandemic-driven warehouse expansion, developers and investors are navigating a mix of policy risk, infrastructure bottlenecks, and tighter capital markets. For the second time in three months, U.S. industrial output fell , driven by weak manufacturing activity and a sharp drop in utility production—pushing capacity utilization below long-term averages. It’s a signal that cracks could be forming beneath the surface, just as demand for logistics facilities, data centers, and advanced manufacturing sites continues to drive expectations.
Recent conversations with brokers, developers, and institutional investors point to an active but cautious industrial landscape. Tariff uncertainty is complicating site selection models. Access to reliable power is influencing industrial development timelines. And institutional investors are rethinking their land acquisition strategies, favoring sites with permitting advantages, infrastructure access, and ownership transparency.
At recent events, including NAIOP’s I.CON East, these themes surfaced across panels and off-the-record conversations alike. The LightBox team engaged with teams across real estate investment, logistics site planning, and renewable energy development, all of whom echoed a common thread: the decision-making process is starting earlier, and the questions are getting sharper. Can we build here? Can we power it? Will the numbers hold—before we commit capital?
Tariffs Reshaping Development Timelines
The tariff conversation has moved from background risk to active constraint. Investors and developers are still interested in ground-up industrial projects, but many are hesitating—not because of demand, but because it’s getting harder to price construction accurately.
In conversations at I.CON East and earlier this year at NAIOP West, brokers and developers consistently pointed to tariff uncertainty as a primary reason for slowing timelines. For some, feasibility models have stalled mid-cycle as cost inputs fluctuate. For others, land that penciled six months ago no longer supports underwriting assumptions when imported steel or equipment costs shift.
“The industrial market is still compelling, but no one’s building blindly anymore,” said Tanya Ball, Capital Markets director at LightBox. “Most of the conversations I had were with people holding land or capital—and trying to understand how to move forward without locking in a mistake.”
Ryan Enger, account executive at LightBox noted that this caution was most visible among groups looking at new development in Tier 1 logistics markets: “It’s not a freeze. It’s a recalibration. They’re watching policy and material pricing before triggering anything with exposure to imports.”
This strategic pause doesn’t reflect fading interest in industrial. If anything, it reflects growing discipline. Projects are still moving—but underwriting decisions are more contingent, and contingency planning itself is becoming a new layer of diligence.
Power Is the New Constraint
Across industrial real estate—especially in logistics, cold storage, and data infrastructure—power and grid capacity—is now the filter that qualifies a site oftentimes before zoning, permits, or transportation links are even considered.
“You could feel the shift toward power-first planning in nearly every discussion,” said Ball of her time at I.CON East. “Developers aren’t just talking about entitlement risk or construction delays anymore—they’re focused on grid congestion, long utility lead times, and limited substation capacity. In some areas, projects are hitting pause simply because the infrastructure can’t meet the load they need.”
This new pressure point is influencing which parcels stay on the list, and which ones quietly fall off—even when everything else lines up. Dan Kennedy, CEO of NAIOP New Jersey, described it during a panel discussion: “These issues are materially affecting industrial site selection and development timelines. The conversations around energy need to be front and center.”
That sentiment was echoed by Grace Power of Solar Landscape, who pointed to rising utility rates and heightened awareness noting that she has been in the energy and utility space for her entire career, and she has “never seen such focus on energy issues.”
For developers, site planning now routinely includes grid capacity assessments, utility consultations, and scenario modeling for backup or renewable integration. This shift is also changing how land is evaluated. Where developers once prioritized cheap, flat parcels near highways, today they’re screening for electrical infrastructure before location advantages even enter the conversation.
LightBox’s Enger noted a similar trend in discussions with land-focused acquisition teams: “Power came up in nearly every conversation I had. Some teams are starting their screening process with utility overlays—before they even run zoning or entitlement checks.”
In practice, this means that viable sites are no longer defined by geometry or cost alone. A parcel that ticks every box on the map might still be ruled out if the power load can’t be met—or if the upgrade timeline extends beyond the project’s delivery window. And in high-demand regions like New Jersey, this reality is pushing developers to expand their search radius or rethink what “shovel ready” really means.
Why Developers Are Paying Closer Attention to Nuclear Energy
What was once dismissed as a long-horizon energy fantasy is starting to show up in site selection strategy conversations. As developers face mounting grid congestion and extended utility delays, nuclear energy, particularly in the form of small modular reactors (SMRs), is reemerging as a potential solution to industrial power needs that are only growing more complex.
In Michigan, Holtec International is leading what could become a model for future industrial energy planning. The company recently announced its intention to restart the shuttered Palisades nuclear power plant—an 800-megawatt facility on the shores of Lake Michigan—with plans to go further: the site will also host two next-generation SMRs. If completed, the project would be the first in the U.S. to pair an existing nuclear facility with small-scale reactor technology to create a hybrid baseload energy hub. Holtec expects the revived plant and new SMRs to begin contributing to the grid by the early 2030s, supported in part by federal loan guarantees and bipartisan energy policy momentum at the state level.
Corporate America is moving, too. In October 2024, Google signed a master agreement with Kairos Power to deploy up to 500 megawatts of clean nuclear energy to power its future data center operations. The deal marks the first time a major tech company has committed to SMR-generated electricity at scale, with a target delivery date of 2030.
While small-scale nuclear still faces permitting and deployment hurdles, its backing is growing—from both capital and end users—signals a shift: energy-intensive industries are beginning to hedge against grid instability by treating nuclear as a long-term layer of strategic site planning.
The Next Wave of Industrial Growth Starts with Smarter Site Selection
Despite tighter underwriting conditions and energy constraints, the appetite for industrial-zoned land is evolving. “The past few months have brought a noticeable shift in how institutional buyers, developers, and operators are approaching land acquisition,” said Enger. Ball added that there’s now less emphasis on scale for its own sake and more focus on strategically positioned sites—those with infrastructure access, entitlements already in motion, or a clearer path to permitting.
At I.CON East, they had multiple conversations with firms actively looking to buy. Many were not in wait-and-see mode—they were preparing for what comes next. Several groups shared plans to ramp up land acquisitions over the next two quarters, particularly for logistics, specialized warehousing, and renewable-linked use cases.
The logic is clear. Even with elevated capital costs and operational uncertainty, long-term industrial fundamentals remain intact. Demand drivers—like e-commerce, reshoring, energy transition, and regionalized supply chains—aren’t retreating. But the underwriting lens is sharper. Land that might have been greenlit 18 months ago now needs to pass a more complex filter.
That’s where data is coming into play. Conversations at the LightBox booth reflected growing demand for tools that can combine ownership clarity, zoning intelligence, and utility overlays in a single workflow. Site selection teams are looking to eliminate unknowns early—especially before legal or capital gets involved. One prospect made it plain: “We don’t want to chase parcels anymore. We want to know where we can actually build.”
Increasingly, buyers know the map—they want to know the people. “Location is just one layer of viability,” said Caroline Stoll, general manager of Data & Analytics at LightBox. “The groups moving fastest are the ones who can trace ownership and understand who they’re actually negotiating with, before they commit resources.”
As the market recalibrates, buyers aren’t pulling back—they’re getting more deliberate. And that shift is playing out most visibly in how land strategy is being redefined from the front end.
What Happens Next Depends on What Gets Unlocked First
The next wave of growth in logistics and warehouse development won’t be led by who holds the most land. It will be shaped by those who understand the full picture: property ownership, grid capacity, zoning, and permitting risk—all viewed through a smarter lens of location intelligence.
As infrastructure demands accelerate and utility constraints deepen, certainty is becoming the new premium. The teams that can access verified parcel data, trace ownership chains, and overlay energy feasibility insights will be the ones reshaping how industrial land strategy works.
“We’re already seeing the smartest players use data less as a report card and more as a strategy tool,” said Caroline Stoll. “They’re not asking, ‘Is this a good site?’ They’re asking, ‘What do we know that others don’t—and how can we move before the rest of the market catches up?’”
This shift—from reactive to proactive, from generic search to data-informed site planning—is what will define the most impactful industrial real estate investments in the months ahead.
