Watson Land Company
SPECIAL ADVERTISING SECTION
INDUSTRIAL REAL ESTATE
challenges in securing construction financing. However, build-to-suit development will likely increase to meet occupiers’ specialized requirements.
“ Construction cooling has been somewhat of a good thing for the health of our industrial markets,” Thornton said.“ There were several overbuilt markets as we came to the end of the last development cycle, and this‘ breather’ is allowing markets to recover and absorb excess space. As a result, large spaces, particularly those of 1 million square feet or more, are becoming difficult to find.”
The shift is creating opportunities for build-to-suit Class A bulk distribution projects.
“ However, the same opportunity doesn’ t exist for small to medium-sized buildings, because there are still a lot of buildings in that size range available throughout the country,” Thornton said. He expects heightened interest from million-square-foot tenants in build-to-suits.
While this supply crunch clears a path for massive projects, markets are recovering at different rates.
“ The supply cliff is real, but there’ s still hangover supply from the last cycle in key markets,” said Hanback, noting that Rockefeller Group monitors markets continuously to look for a healthy balance between sustained demand and constrained supply.
The AI boom
The rapid expansion of AI is creating new demand across the industrial real estate market. Worldwide, a 2026 JLL
Research outlook shows that the global data center sector is experiencing an unprecedented infrastructure investment cycle that will require up to $ 3 trillion by 2030, doubling global capacity.
Currently, the US has more than 4,000 active data centers, with another 3,000 facilities planned or under development to support AI workloads, according to an analysis by the American Edge Project and the Technology Councils of North America, reported by Axios.
“ Data center and ancillary uses are compounding demand for industrial space in addition to increased demand from manufacturers, 3PLs and traditional distributors,” Hanback said.“ This puts a strain on infrastructure and limits the number of sites that can be successfully developed for a multitude of industrial purposes.”
Data from CBRE shows that the race for AI infrastructure has driven primary market data center vacancy to an alltime low of 1.4 %, contributing to spillover demand in traditional industrial real estate. At least 36 US states are offering incentives for data center development to attract AI infrastructure.
“ We’ re seeing a lot of‘ data center-adjacent’ users occupying our warehouse space not to produce data centers, but to stock supplies for data centers, such as racking and wiring,” Thornton said.“ Because there’ s so much data center development happening nationally right now, these adjacent users are leasing our buildings and are willing to pay strong rent rates so that they can seize upon the data center boom.”
Data center development is also increasing the value of properties located near major power infrastructure.“ That results in an increase in the value of even older properties if they’ re close to heavy power,” Thornton said, noting that because CenterPoint has been heavily focused on investing in infill inventory for the long term, its portfolio is rich in inventory adjacent to heavy power infrastructure.
Growth markets
While some traditional coastal gateways are adjusting, population growth, logistics infrastructure and company investments are creating opportunities in the Sun Belt and secondary markets.
CBRE reports that the available labor pool and demand for more power sources will drive demand in the Midwest, mid-Atlantic and Southeast. The most attractive markets for occupier expansions— specifically manufacturing operations— include Louisville, Nashville, Cincinnati, Chicago, Detroit and Kansas City.
CenterPoint has expanded its investment activity in key markets such as Houston, Dallas and South Florida.
“ We also just entered the San Diego market in 2024 and are working on more investment opportunities in California. [ We’ ve ] closed five Class A investments in Atlanta since entering that market a little over a year ago,” Thornton said.
Rockefeller Group has expanded from
Watson Land Company
As a developer, owner, and manager of industrial properties, Watson Land Company has locations throughout Southern California and the East Coast.
With a century of success as its legacy, Watson’ s dedication to its customers is based upon delivering functional, high-quality buildings within master-planned centers, coupled with unmatched customer service.
Watson was the first industrial developer in Southern California to design and construct speculative industrial buildings in accordance with the U. S. Green Building Council’ s Leadership in Energy & Environmental Design( LEED ®) guidelines.
Watson’ s assets and operations are backed by one of the most conservatively managed balance sheets in the real estate industry. Capital allocation decisions are made locally, allowing the business to move forward with strategic acquisitions and dispositions quickly. Watson’ s stable financial resources also enable the company to fund projects internally.
Watson Land Company’ s longstanding tradition of integrity, innovation and fiscal responsibility has made it one of the region’ s most respected names in commercial real estate and one of its largest industrial developers.
54 Journal of Commerce | July 6, 2026 www. joc. com