Trump’s Tariffs in 2025: A Game Changer for Industrial and Shallow Bay Real Estate?

Impact on Construction Costs and Development

The imposition of tariffs on imported steel, aluminum, and other building materials is expected to raise construction costs for industrial properties. As a result, many developers may hesitate to launch new projects, reducing the pipeline of fresh supply. In an already constrained market, this could further tighten availability, making existing properties more valuable and difficult to secure.

For investors, this means fewer opportunities to acquire newly built assets at competitive prices. However, those with existing holdings in key logistics and industrial hubs stand to benefit from rising asset values and increasing rental rates.

Supply Constraints and Market Dynamics

With fewer developments coming online, businesses looking for industrial spaces will face limited choices (especially small bay industrial assets that already had minimal vacancy in high growth markets). This scarcity will likely lead to higher lease rates, benefiting landlords and investors who already own well-located assets.

Investors positioned in these markets could see accelerated rent growth, increased occupancy rates, and higher valuations. Excelsior Capital’s investment strategies provide a way for investors to gain exposure to these shifts without taking on the full burden of ground-up development risk.

Investment Implications and Long-Term Outlook

While tariffs may create short-term affordability challenges by increasing construction and operational expenses, they could also drive long-term industrial demand. By incentivizing domestic production and reshoring supply chains, tariffs may fuel growth in U.S. manufacturing and logistics, increasing the need for strategically located shallow bay industrial properties.
Understanding how to pivot within this tariff-altered environment is key for investors.

Excelsior Capital is well-positioned to help capitalize in these evolving market conditions.

Excelsior Capital’s Strategy: Navigating a Changing Market

At Excelsior Capital, we specialize in identifying opportunities that align with shifting economic landscapes. By leveraging our expertise in industrial real estate, we provide investors with access to:

• Strategic Co-Investments – Partnering with investors to acquire high-performing industrial assets in supply-constrained markets.
• Joint Ventures – Structuring partnerships to maximize value and mitigate risk in a rapidly evolving real estate sector.
• Data-Driven Market Insights – Identifying high-growth regions and securing premium assets before the competition.

As tariffs reshape the industrial real estate sector, those who adapt early stand to gain the most. With Excelsior Capital as a trusted partner, HNWI and institutional investors can turn these market disruptions into opportunities for long-term growth.

Conclusion: Turning Market Disruptions into Investment Opportunities

The 2025 tariffs will undoubtedly impact industrial real estate, increasing costs but also driving long-term demand. Investors who understand these shifts and act strategically will be best positioned for success.

If you’re looking to capitalize on these market changes, Excelsior Capital offers the expertise and investment structures needed to navigate this evolving landscape.

Contact us today to learn more about our co-investment and JV opportunities.