Industrial land for sale is one of the most promising investment opportunities in 2025. Amid economic uncertainties and shifting market dynamics, industrial property continues to outperform most other commercial real estate categories. Indeed, recent market analysis shows industrial properties delivering returns between 8-12% annually, significantly outpacing residential and commercial alternatives.
When evaluating industrial land for sale, investors are discovering unique advantages unavailable in other real estate segments. Furthermore, industrial real estate appraisal experts identify several factors driving the growth of this sector: e-commerce expansion, supply chain restructuring, and a renewed manufacturing focus within North America. Consequently, this creates a perfect storm of opportunity for forward-thinking investors.
In this article, we examine why industrial land deserves your attention, the specific benefits it offers, current market trends fueling its growth, potential risks to consider, and practical steps to begin building your industrial real estate portfolio.
What is Industrial Land and Why It Matters in 2025
Industrial land represents the foundation of modern supply chains and manufacturing ecosystems. As we examine the market conditions for 2025, understanding what constitutes industrial property and its growing importance becomes essential for savvy investors.
Definition and types of industrial land
Industrial land refers to properties specifically zoned and designed for industrial activities, including manufacturing, logistics, warehousing, and distribution. These properties typically reside within designated industrial parks or zones and require specific permits that allow for industrial operations [1].
The industrial real estate sector encompasses several distinct property types:
- Manufacturing facilities – Buildings where products are created, divided into:
- Heavy manufacturing: Large facilities (often exceeding 100,000 square feet) with heavy-duty equipment, three-phase electricity, and extensive loading dock space
- Light assembly: Smaller, more adaptable spaces for assembling smaller components
- Storage and distribution properties – Facilities where goods are stored and shipped:
- Distribution warehouses: Strategically located facilities primarily used for shipping products
- General warehouses: Properties focused on longer-term storage
- Truck terminals: Intermediate sites for transferring goods between vehicles
- Flex properties – Multi-purpose buildings that typically allocate more than 30% of space to offices:
- Research and development spaces: For creating and testing products
- Data centers: Large facilities (typically 100,000+ square feet) housing network equipment
- Showrooms: Combination spaces for showcasing, selling, and storing products
How industrial land differs from commercial and residential
Although industrial real estate is categorized as commercial property, it stands apart in several critical ways. Commercial properties typically interact with the public, while industrial facilities generally do not. This fundamental distinction shapes everything from location requirements to building design.
Regarding zoning, industrial properties often require:
- Larger lot sizes
- More substantial setbacks from property lines
- Specific noise regulation compliance
- Different parking requirements
- Specialized environmental considerations
From an investment perspective, industrial properties frequently deliver superior returns. Yields typically range between 6% and 12%, noticeably higher than what residential and commercial properties offer. Moreover, industrial real estate has historically outpaced the retail and office sectors in terms of value appreciation.
Why 2025 is a pivotal year for industrial real estate
This year marks a significant transition point for industrial real estate as the market enters a new cycle with a return to pre-pandemic demand drivers. Several powerful forces are reshaping the landscape:
First, e-commerce continues its remarkable expansion, with online sales projected to reach 25% of total retail sales (excluding autos and gasoline) by year-end 2025. This growth drives unprecedented demand for warehouse and distribution space.
Additionally, supply chain restructuring remains a priority following global disruptions. Companies are actively diversifying import locations to mitigate risks from labor disruptions, extreme weather events, and geopolitical conflicts.
The reshoring of manufacturing to North America further amplifies demand for industrial real estate. While the U.S. has experienced modest growth in domestic manufacturing, Mexico’s record-low industrial vacancy rates are pushing companies to establish more U.S. distribution centers, particularly near the border or along major north-south highways.
Furthermore, market analysts predict industrial vacancies may peak by late 2025 or early 2026, after which the market could regain equilibrium, assuming continued economic expansion. With new construction starts at 10-year lows and the development pipeline slowing, the supply-demand gap is expected to narrow over the next 12-18 months.
Top Benefits of Investing in Industrial Land for Sale
Investing in industrial land offers unique advantages that separate it from other real estate assets. Understanding these benefits explains why savvy investors are increasingly adding industrial properties to their portfolios.
High demand from logistics and warehousing
The industrial real estate market remains remarkably strong, primarily driven by e-commerce growth and shifting supply chain dynamics. E-commerce is projected to account for 33% of U.S. retail sales by 2027, up from 25% in 2022. This explosive growth creates unprecedented demand for storage and distribution facilities.
Notably, the logistics and parcel delivery industry currently leads performance, with increased demand from Asian third-party logistics providers. Despite an overall 2% year-over-year decrease in general demand, requirements for manufacturing facilities have increased by more than 20%.
As companies focus on same-day and next-day delivery options, “last-mile” warehouses have become highly sought after, especially in densely populated urban areas. In fact, the last-mile delivery segment in North America is projected to grow at a 7.5% compound annual growth rate.
Lower maintenance and holding costs
Unlike residential or office properties, industrial real estate typically requires minimal maintenance, resulting in lower operational expenses over time. Most industrial spaces feature concrete floors and exposed ceilings, eliminating the need for expensive flooring, soundproofing, and high-end fixtures.
Another cost advantage comes through triple-net (NNN) lease structures, where tenants — not owners — cover expenses for:
- Building maintenance
- Property insurance
- Property taxes
This arrangement not only reduces ongoing expenses but can potentially result in higher net operating income for investors. Consequently, raw industrial land maintains low holding costs while waiting for appreciation, making it an efficient long-term investment vehicle.
Long-term capital appreciation
Industrial land has demonstrated consistent value growth, with certain markets showing remarkable appreciation.
Firstly, the limited availability of suitable development sites in prime locations naturally drives up values. In response to this scarcity, some markets are seeing the development of multi-story warehouses to maximize space utilization.
Subsequently, the strategic value of industrial land increases with proximity to transportation networks. Properties near major highways, airports, and ports command premium rates and attract higher rents.
Favorable zoning and development potential
Industrial zoning provides unique development flexibility and economic advantages. Properly zoned industrial land allows for operational efficiencies that other property types cannot match, including wider bay spacing near loading docks for safer and more efficient operations.
Essentially, industrial zoning creates opportunities for higher profits due to reduced competition from other businesses. Local governments often offer incentives to attract industrial development, such as expedited permitting, tax abatements, and tax credits.
Furthermore, industrial properties can be adapted for various uses, increasing their market appeal. A warehouse can be transformed into a distribution center, manufacturing facility, or even a data center. This versatility ensures that industrial land remains valuable even as market demands evolve.
Overall, the combined benefits of strong demand, lower operational costs, consistent appreciation, and favorable zoning make industrial land a compelling investment option for 2025. These advantages explain why the industrial sector has become one of the most attractive investment segments in the U.S. real estate market, ranking second in North America by investment volume with transactions totaling $30.7 billion during the first seven months of 2024.
Key Market Trends Driving Industrial Land Value
Several powerful forces currently shape the market for industrial land, pushing values upward across North America. Three key trends stand out as the primary drivers of this growth.
E-commerce and last-mile delivery expansion
The digital retail revolution continues to fuel demand for industrial space. Online sales now account for approximately 16% of all retail sales, having grown three times faster than brick-and-mortar over the past decade. This growth pattern shows no signs of slowing, with e-commerce projected to reach 35% market share within the next decade.
What makes this particularly significant for land values is the space intensity of online retail operations. E-commerce supply chains require approximately three times more warehouse space than traditional retail. For every $1 billion in e-commerce sales growth, an additional 1.25 million square feet of distribution space is needed.
The push for faster deliveries has also intensified demand for last-mile facilities. As major retailers offer one-day or same-day shipping, strategically located warehouses near population centers have become essential. This trend has driven industrial vacancy rates to historic lows, reaching just 3.8% nationally in 2022.
Manufacturing reshoring and supply chain shifts
Supply chain vulnerabilities exposed during recent global disruptions have accelerated efforts to reshore manufacturing. Since 2020, over 300 major manufacturing projects have been announced across the United States, representing approximately $400 billion in investment and at least 210,000 proposed jobs.
These investments could expand the U.S. manufacturing building stock by 6-13% in just a decade. High-tech, automotive, energy, and biomanufacturing sectors are leading this wave of domestic production growth.
Additionally, nearshoring to Mexico has gained momentum, as seen in a study from investment manager, Ares. Since 2018, non-energy imports from Mexico have increased by 46%, or USD 146 billion. Companies nearshoring to Mexico have leased 52 million square feet since 2019, with 18 million square feet in 2023 alone.
Infrastructure development and government incentives
Government infrastructure investments significantly enhance industrial land values by improving connectivity and operational capabilities. These projects signal long-term economic commitment, attracting private sector interest and triggering industrial relocation.
Federal initiatives, such as the CHIPS Act and the Inflation Reduction Act, have generated over $500 billion in new investment in manufacturing. This funding focuses on semiconductors, electric vehicles, batteries, and green energy supply chains.
Many states offer additional incentives through programs like Keystone Opportunity Zones, which provide tax exemptions for businesses in designated areas.
Collectively, these trends create unprecedented demand for industrial land, particularly in strategic locations with strong transportation access and infrastructure support.
Risks to Consider Before Buying Industrial Land for Sale
While industrial land presents tremendous investment potential, commercial real estate investors must carefully evaluate several significant risks before committing capital. Understanding these potential pitfalls can help safeguard your investment and maximize returns.
Zoning and land use restrictions
Industrial zoning regulations vary significantly between jurisdictions, affecting what activities are permissible on your property. These invisible blueprints dictate where industries can operate and how their impact on surrounding communities is managed. Restrictions often differ between light industrial zoning (such as packaging and certain manufacturing) and heavy industrial zoning (including chemical manufacturing and mining). Violating these regulations can lead to legal issues, costly disputes, and penalties. Before purchasing, ensure that your intended use complies with local zoning plans, easements, and title restrictions.
Environmental and soil concerns
Environmental liabilities represent potentially the costliest risk for industrial land investors. Properties previously used for manufacturing or storing certain materials may have soil or groundwater contamination from chemicals, heavy metals, or underground storage tanks. According to the EPA, approximately 60% of the most polluted properties in the country are in locations at risk of climate-related events. Proper environmental due diligence, including Phase I and II assessments, is essential before acquisition. Without these assessments, buyers may inherit expensive cleanup obligations that can significantly impact property value and development potential.
Market saturation in certain regions
The industrial market recently experienced a slowdown, with 2024 marking the lowest annual net absorption rate since 2011. The imbalance between deliveries and absorption pushed average vacancy rates from 5.9% to 6.2% – the highest since 2015. Developers have responded by reducing construction, with the pipeline currently at 492.8 million square feet, down from a record 1 billion square feet in Q3 2022. However, economic uncertainty continues to make industrial occupiers hesitant about committing to additional space.
Access to utilities and transportation
Utility infrastructure has a significant influence on the viability and value of industrial land. Essential services include electricity, water, sewage systems, telecommunications, and waste management facilities. Sites lacking these utilities require substantial additional investment, affecting overall project costs and timelines. Similarly, transportation infrastructure impacts operational efficiency – congested highways cost the economy about $101 billion in wasted time and fuel annually. Evaluate proximity to major highways, airports, and ports, as this connectivity directly influences transport costs and operational efficiency.
How to Start Investing in Industrial Land
Taking the plunge into industrial land investment requires methodical research and careful planning. Whether you’re a seasoned investor or a newcomer to commercial real estate, these practical steps will help you navigate this lucrative market segment.
Researching high-growth industrial zones
Begin your investment journey by identifying areas with strong growth potential. According to a report by industrial property financing firm Janover, Markets with historically tight vacancy rates, such as Columbus (1.7%) and Indianapolis (2.5%), often signal profitable opportunities. Look for regions experiencing rapid inventory expansion – Indianapolis had nearly 23 million square feet under construction in late 2022 while maintaining tight vacancy rates. Areas with significant infrastructure development and government incentives typically outperform other locations. Studies show that industrial properties near transportation hubs, utility access points, and growing population centers yield superior returns.
Evaluating land based on ROI potential
Thorough due diligence remains critical in assessing potential returns for industrial land for sale. Study local markets and competition, analyzing supply and demand trends, rental rates, and market dynamics. Investigate entitlements, zoning regulations, and title restrictions to confirm the feasibility of development. Environmental assessments, such as soil testing, can uncover costly issues before purchase. Consider build-to-suit options, which secure tenants before construction begins, minimizing vacancy risk while adding value through new buildings.
Financing options for industrial land purchases
Several financing routes exist for industrial land acquisition:
- Traditional bank loans offer flexibility in loan size, with rates starting as low as 2.5%, although they require excellent credit and can take some time to close.
- CMBS loans provide 5-10 year fixed-rate terms with 25-30 year amortizations and typically require a minimum $2 million investment with a maximum LTV of 80%.
- Private commercial lenders offer faster funding with less documentation, although this often comes at higher interest rates and shorter repayment periods.
Consider specialized options, such as USDA loans for rural industrial properties or short-term bridge loans for quick acquisitions, which can be refinanced later with traditional long-term debt.
Working with industrial real estate professionals
Partnering with experienced experts is invaluable when searching for industrial land for sale and other industrial properties. A knowledgeable commercial real estate services team makes a big difference during due diligence by helping identify risks and guiding you through the process. They can connect you with specialists for necessary inspections and surveys. Additionally, consider working with industrial real estate appraisal experts who have a deep understanding of market trends and can provide accurate property value assessments. Organizations such as CBRE, NAIOP, and SIOR maintain networks of professionals specializing in industrial properties.
With nearly nine decades of experience, The Robert Weiler Company dominates the Central Ohio commercial real estate market, specializing in local expertise. Beyond industrial land, our firm also excels in farmland and raw land, as well as in properties for warehouses, retail, office, multifamily, entertainment, sports, and hospitality uses, and in land appraisals. Whether you’re seeking a short-term or long-term investment, our dedicated team offers unparalleled service and expertise. Contact our commercial brokers at 614-221-4286 to discover why we are the premier choice for buying industrial land for sale in Ohio.