More companies have turned to reshoring as they build more resilient and sustainable supply chains. Government incentives from the Inflation Reduction Act and other legislation have sweetened the pot, encouraging more companies to bring home operations from overseas. However, as American businesses begin to put reshoring plans into action, many have struggled to find suitable factory locations near primary and even secondary markets.

In the search for viable manufacturing space, rural America has much to offer businesses looking for onshore production. From the Rust Belt to the Bible Belt and New England to the Southwest, you’ll find towns that owe their roots to one or more factories. These manufacturing towns sprung up and thrived as factory workers moved their families closer to work. Unfortunately, when outsourcing manufacturing overseas became commonplace in the late 20th and early 21st century, such towns paid the price.

Bringing Back the Manufacturing Town

While some manufacturing towns found life beyond the factories that established them, many are now home to rundown or blighted industrial properties. This type of real estate creates an opportunity for a business looking not only to reshore its operations back to the United States but also to have a positive impact on the community where its new operation lives.

Here are some of the benefits a company will find if they choose to reshore production to a rural area or revitalize an industrial property in a factory town:

• Lower real estate costs. Buying or leasing property in a more remote area avoids the competitive pricing found in bigger markets.
• Interested labor. The rural job market is 4.26% smaller than it was in 2008 during the Great Recession. As such, rural residents often travel long distances for work, so good jobs closer to home will be extra appealing.
• More available land. A land shortage continuously plagues urban markets, but many former factory towns have abandoned industrial land just waiting to be bought and used.

Even better, the benefits go in both directions. Companies can help rural communities in numerous ways, such as:

• Creating jobs. Factories run on people, from the assembly lines and the loading dock to the back office and maintenance teams. Reshoring to a rural community can help bring good-paying jobs where they are needed most.
• Paying taxes. Local taxes paid to the community help to improve the infrastructure, schools, and public services that the community relies on.
• Supporting local businesses. Partnering with local service providers and suppliers helps to elevate the entire community.
• Removing blighted properties. Whether urban, suburban, or rural, blighted properties have a negative impact on the communities where they exist. Repairing or razing and rebuilding these facilities can help reduce pests, crime, and more.

Of course, reshoring to a rural location is not without some challenges. Some of the most common issues might include:

• Insufficient broadband, water, or energy infrastructure to support an advanced manufacturing facility
• Being too far from major highways or not having adequate road or rail access
• The high upfront cost for retrofitting or rebuilding existing rural factories (although the likelihood of a good deal on the real estate itself may offset these expenses)
• Fewer highly skilled candidates for technical roles
• Getting zoning approval for greenfield sites

Most of these challenges can be overcome through careful site selection and partnering with a good industrial real estate broker who understands the needs of a rural industrial site. While such a location might not be suitable for every business, many manufacturers find that the benefits of operating in a manufacturing town far outweigh any potential obstacles that must be overcome.

About Phoenix Logistics

Founded by Frank P. Crivello in 1994, Phoenix Investors and its affiliates (collectively “Phoenix”) are a leader in the acquisition, development, renovation, and repositioning of industrial facilities throughout the United States. Utilizing a disciplined investment approach and successful partnerships with institutional capital sources, corporations and public stakeholders, Phoenix has developed a proven track record of generating superior risk adjusted returns, while providing cost-efficient lease rates for its growing portfolio of national tenants. Its efforts inspire and drive the transformation and reinvigoration of the economic engines in the communities it serves. Phoenix continues to be defined by thoughtful relationships, sophisticated investment tools, cost-efficient solutions, and a reputation for success.