Tariffs, materials tighten owner‑user case
Reports flag ongoing uncertainty from interest rates, tariffs and construction supply chains, which increases the appeal of owning an existing facility for firms that need reliable space and timelines. That dynamic is being cited as a rationale for owner‑user and value investor interest in specialized industrial and flex assets. (markets.financialcontent.com)
Buying an existing industrial building is getting easier to justify for companies that cannot wait out tariff-driven cost swings and construction delays. (jll.com) JLL said in its 2026 U.S. Construction Perspective that policy volatility is still reshaping project costs and timelines, and that trade policy instability and immigration enforcement caused delays and holds through 2025 with effects that will carry into 2026. (jll.com) Construction Dive reported on April 8 that updated Section 232 tariffs took effect April 6, with duties as high as 50% on goods made almost entirely of steel, aluminum or copper and 25% on certain derivative goods. Contractors told the publication they are pricing jobs without a clear read on final material costs. (constructiondive.com) Associated Builders and Contractors’ analysis of January Producer Price Index data showed nonresidential construction input prices rose 0.7% from December and 2.9% from a year earlier, with copper wire, cable, iron, steel and industrial controls equipment driving much of the increase. (constructiondive.com) That backdrop has kept many occupiers focused on certainty instead of ground-up development. CBRE said tenants are renewing space at record levels in 2026, while also upgrading into available first-generation distribution facilities and expanding domestic manufacturing to offset tariff-related costs. (cbre.com) The industrial market is not frozen. JLL said U.S. industrial net absorption totaled 161.1 million square feet in 2025, vacancy was 7.5% in the fourth quarter, and 253.7 million square feet was still under construction at year-end. (jll.com) NAIOP said in March that industrial demand strengthened in the second half of 2025, with 128.7 million square feet of net absorption, and forecast 345.9 million square feet for full-year 2026 as businesses adjust to earlier trade-policy and rate shocks. (naiop.org) But supply is uneven, especially for specialized space. CBRE said markets including Louisville, Columbus, Greenville, Chicago, Phoenix, the Inland Empire and Kansas City have limited available first-generation blocks of 500,000 square feet or more. (cbre.com) That helps explain the appeal of owner-user purchases in niche industrial and flex properties: an existing building can lock in location, power, loading and timing in one transaction, while a new build still carries open questions on price and delivery. (jll.com)
