Aerospace and Defense Companies Optimizing CRE Footprints
Access to skilled labor is a key factor driving many relocation decisions.
Reshoring, automation, sustainability and space expansion are expected to drive commercial real estate trends within the aerospace and defense industry this year. The sector is prioritizing high-tech, secure, and sustainable facilities that offer access to talent as well as adequate and predictable power, according to a Cresa report on A&D industry trends.
Defense spending has been on the rise for the past several years, and the space industry has been rapidly evolving and expanding since the creation of the Space Force in 2019 as well as the privatization of space travel. The country has prioritized supply chains during the pandemic and more recent geopolitical tensions, which has created a renewed emphasis on reshoring manufacturing and diversifying suppliers to reduce dependence on foreign companies, said the report. Meanwhile, labor constraints are driving relocation decisions as defense and aerospace companies work to keep up with demand.
Historically, the A&D industry has located manufacturing facilities in California, Florida and Texas, particularly in areas near research centers, military bases and colleges and universities. Existing locations are centralized around large defense contractors like Boeing in Seattle, Lockheed in Dallas and Northrop Grumman in Southern California, along with metros close to Washington D.C., and central Florida near Cape Canaveral. Recently, several metros away from traditional hubs have experienced significant A&D move-ins, including Tucson, Phoenix, Baltimore, and Indianapolis. These locations provide skilled labor, are located near strong supply chains, and offer more affordable real estate options, said Cresa.