THOUGHT OF THE WEEK

How New Tariffs and the U.S. Manufacturing Revival Could Impact The Industrial Outdoor Storage Market

Introduction

With the Trump administration back, trade policy is back in the spotlight. New tariffs are being considered, and U.S. manufacturing continues its revival—both of which could have significant implications for Industrial Outdoor Storage (IOS). As supply chains adapt to shifting economic policies, it’s helpful to keep current on current events and trends to anticipate how they could shape demand for IOS properties in the coming years.

Tariff Impact on Supply Chains

The Trump administration has historically favored protectionist trade policies, including tariffs on imported goods from China, Mexico, and other key trade partners. New tariffs could raise costs for imported raw materials, machinery, and components, forcing manufacturers to reconsider their supply chains.

For IOS, this shift could translate into:

• Increased demand for storage yards near ports and intermodal hubs as businesses attempt to pre-emptively stock up to mitigate supply chain disruptions.

• A rise in transloading and cross-docking operations, requiring IOS facilities for temporary storage of containers, trailers, and equipment.

• Higher costs for construction materials, which may impact new IOS developments and expansion plans.

According to the Council on Foreign Relations, tariffs could lead to higher inflation and affect the profitability of industries reliant on global imports. While this presents challenges, it may drive companies to invest in domestic manufacturing and logistics infrastructure, further increasing the need for well-located IOS properties.

Reshoring & Nearshoring: A Manufacturing Revival

The push for reshoring—bringing manufacturing back to the U.S.—and nearshoring—relocating operations to Mexico or other nearby countries—has accelerated in recent years. According to a JLL report, U.S. manufacturing output is experiencing its largest expansion in decades, with major investments in sectors like automotive, semiconductors, and clean energy technology.

This manufacturing resurgence is expected to drive higher demand for IOS in several ways:

• Material Staging & Inventory Storage: Companies reshoring production will require additional storage capacity for raw materials, finished goods, and distribution.

• Trailer & Equipment Storage: As domestic factories expand, manufacturers will rely more on IOS sites to store trailers, machinery, and overflow inventory.

• Increased Leasing Activity Near Border Markets: Nearshoring efforts are fueling demand for IOS properties along the U.S.-Mexico border (looking at you Laredo), where companies need laydown yards, truck parking, and cross-border logistics space.

Tailwinds: Why Industrial Outdoor Storage Stands to Win

While trade uncertainties and economic fluctuations remain, several strong tailwinds position IOS as a major beneficiary in this evolving landscape:

• Ongoing Manufacturing Expansion: The shift toward domestic production continues, increasing the need for IOS to store materials, equipment, and finished goods.

• Supply Chain Resiliency Strategies: Companies are rethinking logistics to mitigate risks from geopolitical tensions and trade disputes, leading to greater demand for flexible IOS spaces near key transit nodes.

• E-commerce and Distribution Growth: The rise of same-day and next-day delivery models requires more demand for outdoor storage yards to house last-mile delivery vehicles, trailers, and overflow inventory.

• Public and Private Infrastructure Investment: Trillions of dollars are being allocated to infrastructure projects, requiring significant laydown yards and contractor storage, which IOS properties are well-suited to provide.

• Strong Investor Interest: As an asset class, IOS continues to attract institutional capital due to its high-yield potential, lower maintenance costs, and increasing demand across multiple industrial sectors.

The ability of IOS operators to position properties in strategic locations, offer adaptable lease structures, and support industries undergoing rapid transformation will be key differentiators in capitalizing on these trends.

Key Takeaway: IOS at the Center of Industrial Expansion

Whether through reshoring, infrastructure growth, or shifts in supply chains, Industrial Outdoor Storage appears to be positioned as a critical asset class in this evolving landscape.

What Else? 

📩 What do you think? Have you seen demand shifting in your specific market(s)? Hit reply and let us know!

RECS
U.S. Manufacturing Renaissance

Check out JLL’s Research piece on the U.S. Manufacturing Renaissance. An analysis and glimpse into future manufacturing growth and industrial demand.

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