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Amid a Defense and Aerospace Boom, Demand for Industrial Real Estate Soars


In Huntington Beach, Calif., Mach Industries, which has a contract with the Army, makes weapons in a 150,000-square-foot warehouse. One afternoon last fall, the company’s headquarters were humming along, with 3-D printers spitting out the parts for drones, as speakers blasted Led Zeppelin. By mid-2025, Mach aims to produce thousands of drones a month. Its drones can find targets using artificial intelligence and radio frequency sensing when GPS is severed, an advantage in a war zone racked with electronic jamming.

About 15 miles away, in Long Beach, Calif., Vast, a start-up seeking to fabricate, assemble and launch the world’s first commercial space station, leased 160,000 square feet of industrial space in 2023 that was initially going to be a product distribution warehouse. Inside, where there was a persistent smell of coolant, workers manned lathes and extrusion machines, fashioning parts for the prototype.

In one room, a team of workers welded together aluminum rings to make the Haven-1 space station’s body. The control room to monitor the initial flight is expected to be completed by the end of April. Workers can test equipment on an industrial vibration machine that can simulate the G-force of a rocket launch. Elsewhere, bullets are shot into aluminum panels to make sure the space station can withstand a direct hit from a meteoroid. Coders work on top of modular office pods set up in the middle of the factory floor, an easy solution for desk space.

The growing industries’ promise of high-tech and high-paying jobs has helped push states and cities to offer attractive incentives for start-ups to relocate, including flexible permitting and assistance for permit applications.

In California, the city of El Segundo, which was the home of SpaceX’s first headquarters, offers flexible permitting. The city has 12 aerospace and defense companies occupying 740,000 square feet, according to JLL data, and a new development, Brickworks, is set to open this year and provide an additional 100,000 square feet of space.



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