Why Labor Is a Primary Factor in Industrial Real Estate Site Selection

By Sam Laird

When companies evaluate warehouse and distribution space, location, transportation access and cost are foundational considerations. So is labor: The size, skill level and availability of the local workforce shapes not just which markets companies choose, but the submarkets they target and what kind of warehouse space they lease once they get there.

Link Logistics market officers across more than a dozen markets describe labor as one of the first factors prospective tenants raise—and in markets anchored by advanced manufacturing, it often functions as a primary filter in site selection decisions.

How Does Labor Shape Industrial Site Selection?

The labor question in industrial real estate operates on two levels.

The first is general workforce availability and affordability—the supply of workers needed to staff distribution centers, fulfillment operations and light manufacturing. Markets with growing populations, low unemployment and competitive wages relative to other regions have a structural advantage here. For companies evaluating large-scale distribution operations, the ability to hire and retain workers at scale is as foundational as clear heights and loading docks.

The second is specialized and skilled labor—the engineers, technicians and precision manufacturing workers required by advanced manufacturers in aerospace, defense, medical devices, semiconductor production and robotics. These users are not just choosing markets; they are choosing specific locations within markets based on where their target workforce lives. A company building a drone factory or a medical device assembly plant needs to be where the right workers are.

Both types of labor considerations are active across the Link Logistics portfolio. Examining the markets where they play out most clearly illustrates how decisive labor has become.

Which Industrial Markets Show Labor Driving Warehouse Demand?

Minneapolis

Minneapolis presents perhaps the clearest example of labor as an industrial demand driver. The Twin Cities is home to one of the most significant manufacturing clusters in the United States: Medical Alley, anchored by Medtronic, Boston Scientific, 3M and Mayo Clinic, and sustained by a continuous pipeline of medical device startups spun off from those larger companies.

"I don't believe any other market in the country has this large of a medical device manufacturing cluster," says Nick Trevena, senior vice president and Minneapolis market officer for Link Logistics. "The manufacturing cluster here means the schools cater to that industry—you have young people coming out of school with highly skilled manufacturing degrees that you don't see in many other areas of the country."

The result is a market defined by manufacturing demand rather than through-distribution, with low vacancy and limited new construction reflecting the stability of the underlying workforce base. "Minneapolis offers a deep, diverse labor pool that's particularly attractive," Trevena says. "It's a well-educated, highly skilled workforce, especially as it relates to manufacturing."

Read Link Logistics' full Minneapolis market overview.

Orange County

Orange County is defined by its labor pool in a way few industrial markets are. The county's concentration of aerospace, defense, medical device and EV and battery technology companies is directly tied to the highly educated, specialized workforce concentrated there.

"The labor pool is the key asset," says Bryson Lloyd, senior vice president and Orange County market officer for Link Logistics. "Aerospace, defense, medical device, and EV and battery technology companies cluster here because they need specialized, educated workforces."

That labor-driven demand has direct implications for what buildings in the market need to provide. Unlike conventional distribution markets, where clear height and loading capacity are the primary building considerations, Orange County advanced manufacturers prioritize parking, office space and power capacity—reflecting the higher employee counts and operational requirements of skilled manufacturing users. "Companies like Anduril represent the kind of advanced manufacturing and defense technology users that are drawn to Orange County specifically because of its labor pool," Lloyd says. "Their building requirements look meaningfully different from a conventional distribution tenant."

Read Link Logistics' full Orange County market overview.

Bay Area

The San Francisco Bay Area illustrates how labor drives not just market selection but submarket selection within a market. Manufacturing related to AI infrastructure—servers, cabinets, racks and related hardware—concentrates along the South 880 Corridor in the East Bay, where companies can access the skilled technical workforce produced by UC Berkeley, Stanford and other regional institutions.

"The Bay Area offers access to the most concentrated venture capital ecosystem in the United States," says Graeme Coyle, senior vice president and Bay Area market officer for Link Logistics. "The workforce quality is unmatched—UC Berkeley, Stanford and other institutions produce the engineers, technicians and skilled workers that advanced manufacturers require."

The labor-submarket connection is direct: robotics companies relocating from San Francisco to Hayward or Fremont are following their workforce. A drone company, an EV manufacturer and an AI robotics firm all selected East Bay locations in recent Link Logistics transactions, each driven by proximity to the technical talent pool concentrated along the corridor.

Read Link Logistics' full Bay Area market overview.

Seattle

Seattle's submarket structure reflects labor dynamics as clearly as any market in the country. The northeast submarkets—Woodinville and surrounding areas—attract a fundamentally different tenant mix than the Kent Valley distribution core, specifically because of the educated workforce concentrated there.

"We recently closed a deal with a major aerospace technology company in that area specifically because that's where their employees live," says Ryan Fitzgibbon, senior vice president and Seattle market officer for Link Logistics. Advanced manufacturing, drone companies and high-tech operations locate in the northeast not because of transportation access but because of workforce access—their employees live there and don't want long commutes.

Seattle's broader labor advantages reinforce the market's industrial fundamentals. With a median household income of nearly $125,000 annually and a workforce anchored by Amazon, Microsoft, Boeing and a concentration of Fortune 500 companies, the city offers both the consumer base and the talent pool that support diverse industrial demand.

Read Link Logistics' full Seattle market overview.

Phoenix

Phoenix illustrates both dimensions of the labor story simultaneously. The market's West Valley bulk distribution growth is explicitly a "location and labor story," according to Matt Duplantis, senior vice president and Phoenix market officer for Link Logistics—companies locating large distribution operations there have access to a blue-collar workforce at competitive costs. Meanwhile, the Southeast Valley has developed a distinct character shaped by TSMC's semiconductor campus, which has attracted a more highly educated, high-tech workforce that differs meaningfully from the distribution-focused labor pool in the Southwest.

"The diverse qualities of labor available in Phoenix support this range of users," Duplantis says of a market that can simultaneously serve blue-collar distribution demand and the specialized workforce requirements of semiconductor manufacturing and defense contractors. Phoenix now boasts the fourth-largest semiconductor workforce in the United States, a direct result of TSMC's decision to locate its first U.S. advanced semiconductor manufacturing facility there.

Read Link Logistics' full Phoenix market overview.

Charlotte

Charlotte's labor advantages operate primarily through quality of life—and the market officers tracking it say it consistently tips competitive site selection decisions. When companies conduct multi-state searches comparing Charlotte against markets like Nashville, the workforce access argument comes through clearly.

"They consistently choose Charlotte because it's where their employees want to live," says Britten Mathews, senior vice president and Charlotte market officer for Link Logistics. "You get affordable living, great labor, a location between the beach and mountains, and you don't have severe traffic congestion." The result is that Charlotte's labor appeal functions as a genuine competitive differentiator in site selection, not just a secondary consideration.

Read Link Logistics' full Charlotte market overview.

Atlanta

Atlanta's labor advantage is broad-based rather than sector-specific. "One of the first things we hear from customers when touring spaces is that labor—both white-collar and blue-collar—is their biggest operational challenge," says Ryan Hansen, senior vice president and Atlanta market officer for Link Logistics. "Atlanta is fortunate to have a strong talent pool thanks to the growing population base. People want to live here, which means businesses have access to the workforce they need to staff their operations effectively."

The market's position as the economic engine of the Southeast, combined with one of the country's largest and fastest-growing metro populations, creates a labor environment that consistently ranks as a primary advantage in tenant conversations.

Read Link Logistics' full Atlanta market overview.

Dallas-Fort Worth

Dallas-Fort Worth illustrates a dimension of the labor story that other markets don't: the direct connection between transportation infrastructure investment and workforce access. 

"When workers can drive to job sites more easily, you effectively increase your labor pool," says Rebel Blackwell, senior vice president and Dallas-Fort Worth market officer for Link Logistics. Ongoing highway expansion projects across the Metroplex—widening lanes, creating new roads, connecting parts of the market to major arteries—are as much a labor story as a logistics story. Access to workers and access to customers are shaped by the same infrastructure.

Read Link Logistics' full Dallas-Fort Worth market overview.

What Does This Mean for Businesses Evaluating Industrial Space?

For companies assessing warehouse options, the labor dimension of site selection deserves the same systematic attention as transportation infrastructure, proximity to ports or distribution reach.

For advanced manufacturers in aerospace, defense, medical devices, semiconductors or robotics, the workforce question may be the primary filter. Markets like Minneapolis, Orange County, the Bay Area and Seattle support durable industrial demand in large part because of the specialized talent concentrated there. That concentration also tends to be self-reinforcing: Companies locate near the talent, creating jobs that attract more talent, which draws more companies.

For distribution and logistics operations, labor availability and affordability affect both site selection and long-term operating costs. Markets with growing populations, favorable cost structures and strong workforce participation rates—such as Charlotte, Phoenix, Atlanta, Dallas-Fort Worth—offer advantages that can compound over the term of a lease.

In both cases, the submarket matters as much as the market. Where workers live shapes where industrial users locate within a metro, and that geography is often as important as the headline advantages of the broader region.

Link Logistics owns and operates industrial properties across 40-plus North American markets. Explore available warehouse and distribution space to learn more about industrial real estate opportunities near major labor markets.