For manufacturers and their suppliers, industrial real estate decisions have always been complicated. But in 2025, uncertainty over tariffs and trade policy has turned that complexity into paralysis. From postponed expansions to paused site selection processes, the cloud of geopolitical volatility is freezing decisions that require long-term commitments and significant capital outlays.
In today’s climate, it’s not inflation or even labor shortages that are most disorienting, it’s the lack of clarity. And when you’re trying to build or lease a 200,000-square-foot production facility, ambiguity is your enemy.
Why Tariff Policy Uncertainty Is So Damaging
Trade policy affects far more than just pricing. Tariffs influence where goods are sourced, how supply chains are routed, and ultimately, where companies decide to manufacture and distribute products. When manufacturers can’t predict whether critical inputs will face a 10% or 30% tariff or whether those tariffs will still be in place in 12 months, they hesitate to act.
This indecision spreads across suppliers too. If an OEM delays its expansion, the contract manufacturers, packaging vendors, raw material providers, and logistics partners that serve them must recalibrate. Suddenly, the entire ecosystem is waiting.
Some of the most common real estate decisions manufacturers are delaying include:
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New Plant Construction: Capital-intensive projects are being shelved until interest rates and trade costs stabilize.
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Warehouse and Distribution Expansions: Demand is present, but logistics operators can’t forecast it accurately enough to justify long-term leases.
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Cross-Border Footprint Optimization: Without clarity on U.S.-China or U.S.-Mexico trade relations, companies are unsure whether to onshore, nearshore, or continue to diversify abroad.
Interest Rates and Trade: A Perfect Storm
Interest rates were always going to challenge commercial real estate. But combine high borrowing costs with shifting global tariffs, and you get a brutal feedback loop: developers don’t build, tenants don’t commit, and lenders don’t lend.
On a recent episode of The Real Finds Podcast, host Gordon Lamphere sat down with Megan Gluth—CEO of the global chemical manufacturer Catalynt—to discuss this very dynamic. Gluth offers a candid, ground-level view of how these macroeconomic forces are paralyzing investment.
“If you’re asking me to build a new plant and the borrowing costs are sky-high, and I also can’t forecast demand, then my incentive to invest is very low,” Gluth said.
Her company sources and manufactures chemical inputs used in industries ranging from agriculture to pharmaceuticals. With operations in Chicago and global procurement responsibilities, Catalynt operates at the intersection of supply chain volatility and industrial demand. She sees the chaos up close.
“We’re trying to run businesses in an environment that lacks durable guidance,” she told Lamphere. “You turn on the news every day and ask, ‘What’s it going to be today?’ That’s not a strategy.”
The “One Day at a Time” Business Model
One of the most revealing moments in the interview came when Gluth explained how trade policy unpredictability has changed her approach to leadership. Catalynt, she said, now manages global trade “one day at a time.”
That’s not a cliché—it’s an operating philosophy. Without long-range guidance from government or international regulators, her company—and many like it—are forced to manage with short-term contingency planning. And that includes putting large-scale real estate decisions on hold.
Imagine trying to secure entitlements, financing, and municipal approvals for a new processing facility when your core inputs might face sudden cost spikes or restrictions next quarter. The only logical move is to wait.
Real Estate in Limbo: A National Issue
This isn’t just a Catalynt story—it’s an American manufacturing problem.
From Texas to Indiana to upstate New York, economic development agencies are reporting slower-than-expected progress on industrial projects. Developers are holding land, but not breaking ground. Tenants are interested, but not signing. And the longer this stasis continues, the more risk local economies face in the form of lost jobs, unfulfilled tax revenue, and underutilized infrastructure.
Key examples of how tariff unpredictability is distorting industrial real estate planning include:
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Dual Sourcing Plans Delayed: Companies interested in reshoring or dual-sourcing production to U.S. sites are stuck waiting for clearer cost structures.
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Export-Oriented Facilities On Hold: Firms dependent on international sales are hesitant to expand manufacturing in the U.S. while retaliation tariffs remain possible.
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Speculative Development Dwindling: Developers don’t want to speculatively build when the tenant pool is waiting on trade policy clarity.
Add Labor and Wage Pressure—Then Stir
The policy uncertainty isn’t just about tariffs. It’s also about labor mandates and wage regulations—topics Gluth tackled head-on in the podcast.
“You can’t force a business owner to raise wages and then act shocked when the price of milk goes up,” she said. “That’s not corporate greed—that’s just math.”
In industrial real estate, wage policy affects site selection just as much as energy costs or logistics access. If a local jurisdiction mandates wages that make a new plant uneconomical, the project dies. Add uncertainty around federal policy, and companies are once again forced to wait.
Human-Centered Capitalism vs. Financial Reality
Despite her strong positions, Gluth isn’t anti-worker. In fact, she runs her company on radically inclusive hiring principles and a high-performance culture that rewards initiative over credentials.
But she’s also pragmatic.
“If we’re serious about inclusive growth, we need to revisit the assumptions we’re making—and be transparent with the public about what’s realistic,” she told Lamphere.
This insight is relevant for site selectors and developers too. It’s not enough to pitch shovel-ready land or state tax incentives. If your industrial project depends on attracting tenants in heavy manufacturing or advanced logistics, you need to show how your location can offer long-term predictability—not just shiny buildings.
What the Industry Needs Now: Predictability Over Perfection
Manufacturers aren’t asking for perfect policy. They’re asking for stable policy.
Give them five-year windows, clear tariff bands, and some reasonable assumptions on labor and regulatory shifts—and they’ll build. But until then, industrial real estate will remain in a holding pattern.
As Gluth put it: “Business starts when someone looks at something that exists and says, ‘this could be something more.’ But no one takes that leap when the floor is moving.”
Final Thoughts: What Brokers, Investors, and Local Leaders Can Do
While Washington debates the future of trade, those in the industrial real estate ecosystem can take several steps:
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Help Clients Scenario Plan: Build out flexible lease options and expansion clauses that accommodate “if-then” tariff conditions.
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Advocate for State-Level Clarity: Even if federal policy wavers, states and municipalities can offer multi-year incentives, zoning guarantees, and workforce partnerships to reduce risk.
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Communicate the Value of Optionality: Design facilities and leases that allow tenants to scale up or down without penalty, giving them confidence to sign despite uncertainty.
The manufacturing revival everyone talks about will depend not just on reshoring, but on confidence. And that confidence won’t come from slogans. It will come from clarity.
If you haven’t yet heard the full conversation with Megan Gluth, it’s well worth the listen. Her story—from poverty in Iowa to running a global manufacturing firm—is remarkable. But her insights on what it takes to invest in today’s volatile environment? That’s the masterclass industrial real estate needs right now.
🎧 Listen to the full episode of The Real Finds Podcast with Megan Gluth here.
Hosted by Gordon Lamphere, commercial real estate agent and advisor.
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