North Carolina’s Economic Performance Owes a Lot to Industrial Real Estate

At a time when overall manufacturing employment is dipping, North Carolina has bucked the national narrative, and used its recent industrial surge to supercharge local real estate development. 

Last year — a record-breaking one for job announcements and investment, according to Gov. Josh Stein’s office — the Tar Heel State landed massive development deals in the up-and-coming aerospace, data center and rare earth sectors. Two monster new manufacturing facilities — a $5 billion JetZero aircraft factory and a $500 million manufacturing site for data center hardware from global manufacturing and engineering firm Jabil — underscore the state’s growth in booming areas of the national economy. The JetZero plant alone, once it hits its stride, is predicted to employ 14,500. 

“North Carolina was first in flight,” Stein said during the JetZero factory’s groundbreaking, referencing the Wright brothers’ maiden flight in the Outer Banks in 1903. “And we will be the future of flight.”

That isn’t the state’s only potential investment in the future. In November, Vulcan Elements agreed to locate a $918 million rare earth magnet factory in Johnston County near Raleigh, the globe’s largest outside of China. And, over the last 12 months, AVL Manufacturing, Pennsylvania Transformer Technology and Siemens all announced new manufacturing investments related to generators, transformers and gear connected with data center demand. 

Factor in the state’s multibillion-dollar life sciences and biomanufacturing sector, and the recent spate of plant openings means similar announcements about new warehouses, apartments and retail to satisfy a growing workforce.

“We’ve been busier in the last five years than any time in recent memory,” said Christopher Chung, CEO of the Economic Development Partnership of North Carolina. “You’ve got national security and economic security driving reshoring and GLP-1 and life sciences. It’s just all these trends converging.” (GLP-1 is the drug class that includes weight-loss drug Ozempic.)

Between 2021 and 2025, the state announced nearly 30,000 new manufacturing jobs, including thousands at the just-opened Toyota battery megaplant in Liberty several miles southeast of Greensboro, and the bulk of them have already been filled. That places the state third in such job growth behind Georgia and Texas. This is all coming as North Carolina’s cities, including Charlotte, Greensboro and Raleigh, are seeing some of the fastest population growth in the nation. Recent census data pegs the state as the nation’s third-fastest-growing, benefiting from a surge in domestic migration, and the state is fourth in the nation for corporate relocations.

North Carolina’s recent resurgence in manufacturing has been a payoff for past investment in the state’s industrial base. Once a force in tobacco, textiles and furniture, the dramatic fall of those industries between 1990 and 2020 cut the state’s manufacturing workforce nearly in half. That contraction left a large number of unused industrial sites and infrastructure waiting to be redeveloped. 

The state’s workforce keeps attracting industries. Since North Carolina is one of the least unionized states in the union, manufacturing concerns have a cheaper wage alternative. And longtime bipartisan investments in workforce development gives the state added luster in the eyes of site-selection professionals. Some state biotech firms have funded educational programs for middle school students. Despite some drama around recent local elections, there has been broad bipartisan support for funding workforce development and lower taxes, according to Savills Vice Chairman Ann Marie Woessner-Collins.

The state’s 17-campus public university system — including the nation’s oldest public university, UNC-Chapel Hill — and private powerhouses such as Duke and Wake Forest also serve as a feeder for the state’s workforce.

“​​Historically, North Carolina has been very open for business, a low-union environment with favorable operating costs,” said Chris Skibinski, a managing director and industrial specialist in Avison Young’s Charlotte office. 

The state is also diverse. Perceptions of North Carolina rightfully zero in on the tech coming out of the Research Triangle around Raleigh, or Charlotte’s heft in banking and finance. But, Chung said, a big part of the state’s economic narrative over the last few decades has been bringing in new industry, and cultivating the know-how and talent, to backfill these legacy sites. That’s why chasing aerospace and energy-related companies have been top priorities. Airbus announced in December that it’s taking over a supplier’s manufacturing site in North Carolina, which Chung expects the aviation giant will eventually expand.  

In and around the Research Triangle Park, the state’s longtime focus on biomanufacturing has continued to pay off, as multinational biotech firms seek to move more production to the U.S. and demand for new weight-loss drugs strains current production lines. According to industry group NCBiotech, the state tracked $3.79 billion in announced investment last year alone, including Genentech’s announcement of Raleigh suburb Holly Springs as its East Coast production hub, and a $2 billion commitment from Biogen for expansion.

Part of the reason the state has become a leader in this kind of manufacturing growth has been coordination between localities and companies pushing for economic development, said Laura Rowley, vice president at NCBiotech. Municipalities in the Research Triangle and surrounding areas have been proactive around zoning and permitting reform that can expedite developments and approvals for new plants. 

“The current environment and support for pharma production in the U.S. should continue to drive manufacturing growth,” said Elizabeth Berthelette, Newmark’s head of national life sciences research. “We think there’s legs to this trend.”

The second-order impact of all these new plants on other commercial real estate is straightforward, said Avison Young’s Skibinski. Factor in new jobs sites and investment to growing population centers, and additional logistics and warehousing investment is sure to follow. Raleigh’s healthy retail market has sub-3 percent vacancy, 6.8 percent year-over-year rent growth, and surging investment sales, per Avison Young’s most recent data. 

“If JetZero goes to plan over the next quarter century, 15,000 jobs is going to spur a lot of downstream commercial real estate,” said Chung.

In addition to Vulcan’s announcement last year that it would build a new rare earth magnet facility, the company also signed a 501,120-square-foot warehouse lease in Johnston County in the fourth quarter. Recent CBRE data on Raleigh’s warehouse market suggests a surge in construction, especially larger facilities meant to handle the demands of new tenants. 

Evan Sassaman, a senior vice president in Avison Young’s Raleigh-Durham office, said bulk industrial space in his market, defined as anything over 500,000 square feet, sits at a 2 percent vacancy, because owners and operators have been positioning themselves and preparing for increased demand from new industrial developments.

In what’s called the “halo counties” near the Research Triangle, the biotech surge has led to a wave of new residential and commercial development. In both Lee and Johnston counties, development is “blowing up,” said Doug Brock, a Newmark senior managing director. Greystar is looking to invest in a large industrial site in Johnston County, and a number of large-scale mixed-use communities are looking to break ground in and around Lee County’s Sanford. More than 12,000 new homes are planned for Lee County alone.

In Wake County, RXR has begun site preparation for a $3 billion mixed-use “mini-city” called Veridea, a long-in-the-works project set to capitalize on all regional dynamism with a mix of residential, retail, hotel and the NC Children’s Hospital as an anchor tenant. Roughly 12 million square feet of commercial space will be included. RXR Chairman and CEO Scott Rechler called the development a key part of the firm’s superstar region theory of post-COVID development, and expects work to continue for the next decade. 

This isn’t to say North Carolina hasn’t had its fair share of setbacks and losses, especially due to some of the whiplash in federal manufacturing policy. 

Commotion around VinFast, a Vietnamese electric vehicle maker that promised to build a massive factory in 2024, has died down now that the project seems mired in delays as the company develops factories in Asia. Another massive plant, the finished $5 billion Wolfspeed facility in Chatham County, remains unutilized. The firm filed for bankruptcy last year, and the demand for its specialized silicon carbide, used in electric vehicles and power grids, has softened. A highly anticipated Apple campus in Raleigh has been delayed for years due to uncertainty in Big Tech. And a number of spec life sciences developments that weren’t tied to the wave of Big Pharma investment have been sold or repositioned for other uses.

But the state’s backers feel North Carolina has had more success than failure. While it’s attracting data center development like so many other states, the power grid, run by local utility Duke Energy, isn’t as strained as other states, leaving sufficient power for industrial expansion. 

That means potential megasites can still be had. Avison Young, which predicts steady growth and similar manufacturing investment in the state in 2026, is currently repping numerous sites in play, such as a 624-acre site in Leland, in the southeastern corner of the state, under contract to become an advanced manufacturing site. Similarly, a 221-acre site for sale in Fayetteville is getting attention as a potential manufacturing or data center site. 

And Spark LS, a 1.3 million-square-foot life sciences development that didn’t pan out, found a second life this past December. It’s now set to be North America’s largest manufacturing site for Pokemon cards. Perhaps it’s just the latest example of the state’s economic evolution. 

“Those misses get the headlines,” said Brock, “but there’s still a long list of wins, right?”