3 Expansion Strategies Manufacturers Should Consider in Site Selection

Despite an increasingly complex global landscape, interest in U.S.-based manufacturing investment remains strong. Industrial companies continue to view the United States as a strategic location, but volatile political rhetoric, trade tensions, and ongoing tariff uncertainty cloud long-term planning. These factors make it difficult for companies to move forward with complete confidence in large-scale capital investments.

In response, many manufacturers are adopting a phased approach to project development—establishing initial operations with the flexibility to expand as market conditions stabilize. 

This adaptive strategy helps mitigate risk but also reshapes how companies approach the site selection process. Instead of focusing solely on immediate operational needs, more companies are prioritizing locations that support scalable growth over time. While ensuring that a community has the workforce and utility capacity to scale is critical, a company’s real estate strategy is the first step in enabling long-term flexibility.

Site Selection Group, a leading location advisory, economic incentives, and real estate services firm, helps companies evaluate expansion strategies throughout the site selection process. Below are the most common industrial facility expansion strategies and the key factors to consider.

3 Common Expansion Strategies for Industrial Facilities

Strategy 1: Greenfield Land Banking

The most flexible and historically common expansion strategy is banking land for greenfield projects, allowing for scalable construction over time.

• Advantages: Land is relatively inexpensive compared to overall project costs and typically retains its value. It provides a blank slate for companies to design facilities around their specific processes.
• Disadvantages: This strategy is only viable for manufacturers that require a purpose-built facility. It limits more generalized operations from leveraging the current marketplace for existing industrial buildings.

Strategy 2: Existing Building with Expansion Land

Securing an existing building (through lease or purchase) that meets immediate needs but also offers expansion land is often the ideal target for projects today.

• Advantages: Provides the speed and cost benefits of the existing building marketplace while maintaining flexibility to scale over time.
• Disadvantages: Because developers often maximize site coverage, only a small share of existing buildings include viable expansion land. Additionally, excess land attached to a developed site is usually more expensive than a typical greenfield parcel.

Strategy 3: Phasing into a Larger Building over Time

Although less common, some projects scale into a larger building in phases. This typically involves either an outright purchase of a facility or a lease agreement with a right of first refusal (ROFR) or “must-take” clause, where phasing and financial terms are predetermined.

• Advantages: With a vast supply of vacant industrial buildings across the United States—many exceeding 1 million square feet—physical options are abundant. Manufacturers can also capture time and cost benefits from the existing building market.
• Disadvantages: An outright purchase can tie up significant capital in unused space. Leasing strategies, on the other hand, may force a company to exercise its ROFR sooner than preferred.

Other Key Considerations in Scalable Site Selection 

While this blog focuses on real estate expansion strategies, other critical resources must also be present for long-term scalability. The most important thing for most manufacturers is a steady pipeline of qualified workers. Though future workforce conditions are difficult to predict, factors such as demographics, migration trends, economic conditions, and competing project announcements can provide meaningful insight.

For utility-intensive operations, it is equally important to confirm the availability of adequate utility capacity—namely electricity, natural gas, water, and wastewater—or to have confidence that the necessary improvements can be made to support future growth.