Industrial Real Estate 101: What It Is, Who Needs It, and Why Investors Care

Ever wonder where your Amazon package actually sits before it shows up at your door? Or where Tesla builds those cars? That's industrial real estate. It has become one of the best-performing investments you've probably never thought about.

Here's what caught our attention: unlike flashy tech stocks or crypto, these are physical buildings generating real rent checks every month from companies like Amazon, FedEx, and major manufacturers.

For investors looking at US opportunities, industrial real estate offers something pretty compelling: dollar-denominated growth, reliable tenants, and demand drivers that aren't going anywhere. Let's break down what this sector actually is and why it matters.

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What Is Industrial Real Estate?

In short: the physical buildings behind digital commerce. Every time you order something online, that product moves through a chain of industrial properties: from the factory where it's made, to the warehouse where it's stored, to the distribution center closests to your neighborhood.

The main types you'll see:

Warehouses & distribution centers 📦

These range from basic storage spaces to high-tech fulfillment centers packed with robots and conveyor belts.

Amazon alone uses over 470 million sq ft of warehouse space, and has plans to add another 50 million. Modern distribution centers can hold 500,000+ items and get orders out the door in hours.

Manufacturing facilities 🏗️

Where products are made. This includes everything from car plants to semiconductor factories to food processing. Right now, there's a massive wave of manufacturing coming back to the US - they need space.

Cold storage

Temperature-controlled warehouses for food and pharmaceuticals. With online grocery sales continuing to grow, someone needs to keep all those groceries fresh.

Last-mile delivery hubs

Smaller facilities located within 10 miles of major cities, enabling same-day and next-day delivery. These are the final stops before your package reaches you.

Who's Renting These Buildings?

The tenants are household names and titans of commerce:

E-commerce giants → Amazon, Walmart, Target all need massive warehouse networks to deliver on their two-day shipping promises

Logistics companies → FedEx, UPS, DHL are constantly expanding to handle growing package volumes

Manufacturers → Auto companies, tech firms, and consumer goods brands building or expanding US operations

Third-party logistics (3PLs) → Companies that handle warehousing and shipping for other businesses.

These are investment-grade companies signing long-term leases (typically 5-10 years) and paying rent consistently.

Three Big Trends Driving Demand

1. E-commerce keeps growing 📈

Online shopping hit $304.2B in Q2 2025, up 5.3% from the previous year, and represents 16.3% share of total sales.

With online sales that keep growing, the logic is simple: more online shopping = more warehouses needed.

2. Manufacturing is coming home

Over 300 major factories have been announced since 2020, representing $400 billion in investment.

Why? Companies learned the hard way during COVID that stretched global supply chains are risky. Bringing production closer to customers means they need US-based facilities.

3. Supply chains are getting shorter

Companies are paying premium prices for modern warehouses near ports and major cities. They want goods closer to customers, not sitting on a ship somewhere.

Why US Industrial Real Estate Makes Sense For Investors

The scale is unmatched

The US is the world's largest economy, driven by consumer spending. The share of that spending in e-commerce continues to grow. To keep up with consumer preferences, retailers need space to build fast and reliable supple chains.

Real diversification

US industrial real estate gives you income from completely different drivers: consumer spending, technology adoption, manufacturing activity.

With US GDP growing and structural demand from reshoring and e-commerce, you're accessing growth that moves independently from other markets.

The Opportunity Right Now

Industrial real estate won't make headlines like the latest tech companies. But it generates consistent cash flow backed by undeniable fundamentals, not just sentiment.

After a post-pandemic construction boom, developers have slowed down. Higher interest rates and rising costs have made new projects harder to justify. Industrial property completions are projected to fall through the second half of 2025.

Translation: better prices, same strong fundamentals, and the structural drivers: e-commerce growing, manufacturing returning, supply chains shortening - only getting stronger.

You can't suddenly create a distribution hub that reaches America's population overnight. You can't manufacture more land near major ports. But you can position capital where structural economic forces create sustained, predictable growth 📈

For investors building wealth, industrial real estate offers something increasingly rare: genuine scarcity paired with strong demand.

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Past performance is not indicative of future returns. All Investments carry risks. Stake Funds is regulated by the CMA as a Fund Distributor in KSA.