In recent years, a significant shift has been occurring in global manufacturing: the trend of onshoring, or bringing production back to the United States. This movement, driven by a combination of economic, geopolitical, and technological factors, is creating a surge in demand for domestic manufacturing space. At Phoenix Industrial Redevelopment (PIR), we’re strategically positioned to capitalize on this trend, with our focus on small-bay, multi-tenant industrial properties that are ideal for the diverse needs of onshoring companies.
The Onshoring Momentum
Several factors are contributing to the onshoring trend:
- Supply Chain Resilience: The COVID-19 pandemic exposed vulnerabilities in global supply chains, prompting companies to seek more reliable, local sourcing options.
- Rising Overseas Costs: Increasing labor costs in traditional manufacturing hubs like China have reduced the cost advantages of offshoring.
- Technological Advancements: Automation and advanced manufacturing technologies are making U.S. production more competitive.
- Government Incentives: Policies encouraging domestic manufacturing are providing additional motivation for onshoring.
- Quality Control: Proximity to production allows for better oversight and faster response to quality issues.
Key Industries Driving Onshoring
While the onshoring trend is broad-based, certain industries are at the forefront:
Semiconductors and Electronics
The global chip shortage has highlighted the critical nature of semiconductor manufacturing. The CHIPS Act, signed into law in 2022, is providing significant incentives for domestic semiconductor production, driving demand for specialized manufacturing facilities.
Electric Vehicles and Batteries
The rapid growth of the electric vehicle market is spurring investment in domestic battery and EV manufacturing. Companies are seeking to shorten supply chains and take advantage of government incentives for clean energy production.
Pharmaceuticals and Medical Devices
The pandemic underscored the importance of domestic production of critical medical supplies and pharmaceuticals. This sector is seeing increased investment in U.S.-based manufacturing facilities.
Aerospace and Defense
National security concerns and the need for close collaboration between manufacturers and designers are driving more aerospace and defense manufacturing back to the U.S.
Advanced Materials
Production of advanced materials for industries like aerospace, automotive, and energy often requires specialized facilities and a highly skilled workforce, making the U.S. an attractive manufacturing location.
PIR’s Strategic Advantage
Our focus on small-bay, multi-tenant industrial properties positions us uniquely to serve the needs of onshoring manufacturers:
- Flexibility: Our properties offer spaces ranging from 1,000 to 5,000 square feet, allowing companies to start small and scale up as needed.
- Strategic Locations: We target properties in key markets with strong infrastructure and access to skilled labor pools.
- Customization: Our value-add approach allows us to adapt spaces to meet the specific needs of different industries.
- Cost-Effectiveness: For smaller manufacturers or those just beginning to onshore operations, our multi-tenant properties offer a more affordable option than large, single-tenant facilities.
Adapting to Onshoring Needs
To better serve onshoring manufacturers, we’re making strategic investments in our properties:
- Power Upgrades: Many modern manufacturing processes require significant power capacity. We’re upgrading electrical systems to meet these needs.
- Enhanced Connectivity: We’re investing in high-speed internet and advanced telecommunications infrastructure to support smart manufacturing technologies.
- Improved Ventilation and Climate Control: For industries with specific environmental requirements, we’re enhancing HVAC systems.
- Flexible Space Configurations: We’re designing spaces that can be easily reconfigured to accommodate changing production needs.
The FixedFunds Program Opportunity
For accredited investors looking to capitalize on the onshoring trend without the complexities of direct property ownership, our PIR FixedFunds Program® offers an attractive opportunity. This program allows investors to participate in the growth of our industrial real estate portfolio while earning fixed returns.
Key features of the FixedFunds Program include:
- Two Investment Options:
– Income Notes: 8% annual return, paid monthly
– Growth Notes: 8% annual return, compounded monthly - Stepped-Up Interest Rates: Higher rates for larger investments, up to 8.50% for investments of $1,000,000+
- Minimum Investment: $50,000
- Term: 5-year notes with a 2-year extension option
- Security: All notes are secured by the Fund’s assets, including its preferred equity investments in Project LLCs
By participating in the FixedFunds Program, investors can gain exposure to the growing onshoring trend through our carefully curated portfolio of industrial properties, all while enjoying the benefits of fixed returns and professional management.
Looking Ahead
The onshoring trend is likely to continue gaining momentum in the coming years, driven by a combination of technological advancements, policy initiatives, and a growing emphasis on supply chain resilience. This presents a significant opportunity for both manufacturers and real estate investors.
At PIR, we’re committed to staying at the forefront of this trend, continually adapting our properties to meet the evolving needs of onshoring manufacturers. By focusing on small-bay, multi-tenant industrial properties and taking a hands-on, value-add approach to property management, we believe we’re well-positioned to capitalize on the onshoring boom and deliver long-term value for our investors.
If you’re an accredited investor interested in gaining exposure to the exciting onshoring trend with the simplicity of fixed returns, we invite you to learn more about our PIR FixedFunds Program®. Together, we can support the resurgence of U.S. manufacturing while potentially benefiting from attractive, stable returns in the industrial real estate sector.
