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Foundry Commercial is built on the ideal of having no silos. From its people to its platform, working as one unit with a growth mindset is always at the forefront. And in the boom that the industrial sector has experienced in recent years, the way Foundry’s D&I and Services business lines work together has given our company an edge.
With this edge, Foundry’s team has found a sweet spot in industrial corridors, an area strategically located and concentrated with industrial and commercial facilities like warehouses, manufacturing plants, and logistics hubs. We interviewed industrial brokers within three Foundry markets to learn what they’re seeing in the corridors, and how they expect these hubs to continue to impact the industry.
Florida
Renowned for its importance but also its complexity, the ‘I-4 Corridor’ that spans from Tampa through Volusia County is where Partner Justin Ruby, SIOR, CCIM, and his team have been focused. Given the state’s rapid growth, I-4 has become a vital distribution hub. And while the Sunshine State has historically relied on Atlanta’s industrial supply chain logistics to provide goods and services, that isn’t the case anymore.
“Today, it’s Florida serving Florida,” said Ruby. “With the growth we’ve experienced – in addition to evolving consumer preferences – the Atlanta-dependent dynamic we used to experience has shifted.”
Ruby went on to explain that in general, corridor growth is due to a snowball-effect that starts with the roadways. As roadways see improvements that allow for more efficient movement of goods, residential developments naturally follow. And when people show up, so does retail and – as a result – a demand for industrial facilities to supply that retail. This creates the perfect equation for industrial corridors to thrive.
The I-4 Corridor faces a challenge: a population boom and rising demand for faster, local goods delivery have increased the need for regional distribution, but the corridor’s width hasn’t changed in 50 years. The demand for expansion exists, but there is a lack of funding and infrastructure. One more added challenge is the oversupply of industrial space that were built during the boom of the pandemic. Post-COVID demand has recalibrated, and leasing activity has slowed over the last 6-7 quarters, leaving a remaining oversupply.
Rents and vacancies in Central Florida’s industrial market are healthier than they might initially appear, once the impact of oversupply is filtered out. This nuanced understanding underscores the importance of localized expertise, a principle Foundry embraces by ensuring its Development & Investment (D&I) and Services teams collaborate across the platform.
Foundry typically develops in markets where they have brokerage teams, thus ensuring we have on-the-ground data and insight. While national statistics include a lot of noise, the Foundry team can filter data to understand the true market dynamics. Ultimately, the industrial market in Central Florida is in a good spot, and Foundry’s local expertise and data-driven decisions have helped the team to close $700 million in deals.
These successes are concentrated along key industrial corridors, which serve as critical arteries for the movement of goods and services. By focusing on these strategically important areas, Foundry ensures its developments not only meet current market demands but also align with long-term growth in Central Florida.
The Carolinas
Based in Charlotte, Managing Director & Partner Warren Snowdon, SIOR, has seen similar trends in the Carolinas. Snowdon has been watching the Southeast industrial market, specifically the 666-mile I-85 Corridor. “AtWash,” as it is sometimes called (since it spans from Atlanta to Washington), includes key markets that are in Snowdon’s focus area, from Greenville, South Carolina to Greensboro, North Carolina.
Snowdon has seen a temporary oversupply in certain larger-sized buildings in some areas following the pandemic, but in the absence of new larger deliveries, those buildings are now being absorbed. It remains challenging to locate infill sites for smaller (<100,000 square feet) buildings. Larger buildings requiring flat terrains have faced constraints like significant site improvement costs because of challenging topographical and hydrology issues. But even with these challenges, the industrial sector continues to be strong, and the I-77 and I-85 corridors have seen some major surges.
“There has been significant development along I-85 in recent years,” said Snowdon. “We’ve seen a growing demand for manufacturing facilities, buildings to purchase, and heavy power sites for manufacturing facilities. The ability to secure significant utility services within close proximity to population centers will impact the value of future land transactions.”
This surge is expected to continue, as manufacturing and industrial use is shifting back to population centers along I-77 and I-85. Specifically with the Greensville to Greensboro stretch, Snowdon pointed out that concentrated access, population growth, and availability of land in close proximity to interchanges have recently made I-85 the preferred corridor for larger pure distribution users of late.
Using the same on-the-ground strategy that’s proven successful for Foundry’s integrated platform, the Charlotte industrial team has found that focusing on 50,000 – 100,000 square-foot users in infill locations to drive rental rates and maximize value has been key. Trends also show that new deliveries are expected to decrease from 11.5 million square feet in 2024 to approximately 5.7 million square feet in 2025, and while at one time it seemed this was a necessary recalibration, Snowdon is projecting with continued demand paired with significant decline in new building starts, certain sectors of industrial product may become scarce in the next 24 – 26 months.
The Charlotte region is a clear example that despite challenges, the industrial sector in the Carolinas has remained resilient. And it serves as a reminder that industrial corridors have become increasingly important for commerce across the U.S., as the southeast continues to see significant population growth.
Texas
“Texas is primed for industrial growth,” said Vice President Randy Blankenship in Dallas. “The ‘Golden Triangle,’ which includes Dallas/Ft. Worth, Houston, and San Antonio/Austin, is forming as a strategic area for population density and industrial activity.”
This megaregion of Texas, set to generate over 1.5 million new jobs and exceed $1 trillion in GDP by 2030, sits centrally located for distribution with access to three major highways (I-35, I-45, and I-10), and major infrastructure assets such as 26 commercial airports, 19 seaports, and 34 Foreign Trade Zones. The state has invested in forward-thinking development strategies that draw companies to Texas, rather than pushing them away. Big players ranging from Fortune 500 companies to large manufacturers are drawn to Texas for large-scale operations, especially due to the state’s central location, business-friendly policies, access to skilled labor, and nearby top-ranked universities.
“We are seeing trends of third-party logistics providers playing a huge role in the market,” added Blankenship. “And investments in onshoring and nearshoring are fueling activity in the border towns as well within these urban areas and along the corridors that connect them.”
Land availability in Texas urban cores has become a challenge, due to demand increasing so rapidly. Some prime sites have been mostly developed, leaving smaller, irregularly shaped parcels that are more difficult to utilize. One way Foundry’s D&I team has shown success in overcoming this issue is through their office-demo-to-industrial conversions strategy; by demolishing vacant office spaces, the team is able to successfully build industrial facilities on otherwise obsolete office parcels.
A high demand for data centers is also creating supply crunches, much like what is happening in the Carolinas. And similar to both the Carolinas and Florida, oversupply is a factor impacting vacancies. But overall, the market remains strong.
Texas’s growth expands outside just the industrial sector, as the state diversifies beyond the long-standing oil and gas industries and becomes home to more tech and finance companies. And the Foundry team – from both the D&I and Services perspective – is working to capitalize on all the growth. Additional collaboration with Maxis Advisors has allowed Foundry to identify and promote key data and incentives that are attracting businesses to Texas.
With strong industrial corridors and great connectivity, Blankenship and the Foundry team in Texas are excited about where the Texas market is headed.
Across the country, with shifting populations and demands, it has become increasingly important to connect markets to get goods to the consumer as locally as possible, and as quickly as possible. And even with the challenges that come alongside the growth, the industrial sector continues to find ways to prevail.
As industrial corridors continue to evolve, they present dynamic opportunities for growth and innovation. With a proven track record of foresight and execution, Foundry Commercial is uniquely positioned to lead the way in capitalizing on this expanding market.