Post‑industrial Towns as Sourcing Targets

A slice of startup real estate chatter has shifted from the Bay Area to older factory towns, where industrial space can lease for a fraction of Silicon Valley rates. (cbre.com) (cushmanwakefield.com) In Silicon Valley, the average industrial asking rate was $1.79 per square foot per month in the fourth quarter of 2025, according to CBRE. In Buffalo, Cushman & Wakefield put the weighted average asking industrial rent at $7.50 per square foot for the full year — roughly one-third of Silicon Valley on an annualized basis. (cbre.com) (cushmanwakefield.com) The same gap shows up across the Bay Area. CBRE reported average industrial asking rates of $1.31 per square foot per month in Oakland and $1.37 across the Bay Area in late 2025, while Pittsburgh’s market stayed tight enough that CBRE described it as “supply-constrained” even as leasing accelerated. (cbre.com 1) (cbre.com 2) (cbre.com 3) For hard-tech companies, that matters because “industrial” space is where prototypes become production lines. Brookings said older industrial regions are central to the current United States industrial policy push, with federal and state money aimed at place-based manufacturing growth rather than only coastal research hubs. (brookings.edu) Those regions also come with legacy building stock. JLL said more than 52% of United States manufacturing inventory is 30 to 60 years old, which helps explain why older industrial metros can offer existing plants and warehouses that owner-users can retrofit instead of building from scratch. (jll.com) (cushmanwakefield.com) State incentives are part of the pitch. New York’s Excelsior Jobs Program offers up to five refundable tax credits for firms in sectors including manufacturing, while Ohio says it offers grants, loans, bonds and tax credits for companies that expand and create jobs in the state. (esd.ny.gov) (development.ohio.gov) Pennsylvania and Michigan market similar packages. Pennsylvania’s Manufacturing PA initiative ties support to partnerships and workforce programs, and Michigan says its incentive and tax programs are available to businesses that start, relocate or expand there. (dced.pa.gov) (michiganbusiness.org) Cost of living is the other leg of the argument. The Bureau of Economic Analysis said California had the highest state-level regional price parity in 2024 at 110.7, meaning prices ran above the national average, with housing rents especially elevated at 154.3. (bea.gov) National real estate data also show why the conversation is resurfacing now. Cushman & Wakefield said fourth-quarter 2025 industrial absorption reached 54.5 million square feet, and CBRE said United States industrial leasing rose 12% in 2025, a sign that occupiers were making decisions again after a slower stretch. (cushmanwakefield.com) (cbre.com) The tradeoff is that cheap buildings are not automatically ready for advanced manufacturing. JLL said demand is rising for modern facilities with adequate power, sustainability upgrades and specialized layouts, which means some post-industrial properties work as plug-and-play sites and others need heavy capital before a startup can move in. (jll.com) The thread’s premise is simple: when Bay Area space is priced for scarcity, older factory cities start to look less like leftovers and more like inventory. The winners will be the towns that can pair low rents and old buildings with power, labor and incentive packages that actually close deals. (cbre.com) (brookings.edu)