Limited Real Estate Options for New U.S. Factory

Limited Real Estate Options for New U.S. Factory 

 The downside to the US factory boom is real estate.

The country has enough land but lacks "megasites" to build large, state-of-the-art factories, Reuters reported.

For example, a Volkswagen scout said Motors was considering about 75 plots to build a multi-billion dollar plant, but he wanted a 1,600-acre South Carolina site instead of a 2,000-acre site. calmed down.

Scout was not alone. Some companies are looking for a location of at least 1,000 acres that is accessible, has transportation, is close to a skilled workforce, and has access to cheap green energy. The boom is largely due to government stimulus measures, concerns over supply chains in countries such as China, and a shift to new energy technologies, the outlet reports.

The Biden administration has focused on the issue so far, but also says it's a good one.

"People are finding places to build," a White House official told Reuters. "I don't think I've ever heard of a company abandoning a project because they couldn't find a place."

The plans to build the factory may not have been scrapped, but the location was changed.

For example, Rivian Automotive changed plans to build a $5 billion factory outside Fort Worth, Texas, in Georgia, citing a lack of transportation infrastructure. Some have specific requirements. Like Intel, his $20 billion semiconductor factory in Ohio doesn't need to be too close to railroad tracks because vibration is annoying.

Another issue is power. Many large factories, such as battery factories, require large amounts of power.

"Some of these projects require hundreds of megawatts," Didi Caldwell, president of consulting firm Global Location Strategies, told Reuters. “At the same time, we are shutting down a lot of coal-fired power plants.”

At least some states, including Michigan, South Carolina, Virginia, and North Carolina, are doing what they can to build an industrial base in the near future. It's not easy because with environmental regulations as well as local pushback making it difficult to create them.