Power, AI and Risk: What’s Next for Industrial Real Estate in the West

Kathryn Atkins for Market Share Blog | March 4, 2026

Industrial real estate across the Western U.S. is entering a new phase shaped by technology, infrastructure constraints and evolving supply chain strategies. While the sector remains fundamentally strong, the drivers of demand – and the challenges of delivering new space – are shifting.

A panel of industry leaders at NAIOP’s I.CON West this week explored how artificial intelligence, advanced manufacturing and infrastructure needs are redefining logistics markets from Silicon Valley to Phoenix.

The discussion was moderated by Melinda McLaughlin, senior vice president and global head of research at Prologis, and featured Rachel Hickenbottom, senior vice president of development at Link Logistics Real Estate; Laurel Casey, principal of acquisitions at Marq Logistics; and Abbie Wertheim, partner at Panattoni Development.

Across the conversation, one theme surfaced repeatedly: Industrial demand in the West is evolving quickly – and power availability is becoming one of the most critical variables shaping the next wave of development.

AI AND ADVANCED MANUFACTURING ARE RESHAPING DEMAND

Panelists began by examining technology-driven markets such as Silicon Valley and Seattle, where new waves of innovation are driving demand that extends beyond the tech sector. For instance, in Northern California, as companies expand manufacturing related to artificial intelligence – servers, robotics, semiconductors and advanced electronics – the impact spreads throughout the logistics ecosystem.

“You’re seeing manufacturing happening in these tech hubs,” said Wertheim. “But that activity also impacts the supply chain around it – warehouse space for inbound goods and distribution space to move those products out.”

Because highly constrained markets like Silicon Valley have limited land available for industrial development, the demand often spills into surrounding regions where larger buildings can be delivered more easily. The result is a ripple effect across nearby logistics markets, particularly in Northern California’s Central Valley.