Leasing for defense and aerospace start-ups is up as global tensions and conflicts buoy investments in manufacturing.
Looking for a site where workers can weld the panels of a space station together and then shoot bullets at them to see if they can withstand meteoroid hits?
You’re not alone.
Defense and aerospace companies leased 11.3 million square feet in 2024, up from 7.1 million in 2022, said Tom Taylor, who manages the aerospace and defense practice at JLL, a real estate firm.
“We do believe the aerospace and defense industries, in particular, are going to be one of the demand drivers for new industrial space,” Mr. Taylor said.
The leased spaces typically have large open-floor plans for machinery and manufacturing, high ceilings for cranes and special assembly gear, sterile and air-filtered rooms, and lots of power for heavy-duty machines to build — and sometimes blow up — weapons, rockets and drones.
Besides manufacturing space, there’s office space. From the end of 2023 to the end of 2024, roughly 426,786 square feet of office leases came from the defense and aerospace sectors, triple what the legal industry leased, according to data that CBRE, a real estate services firm, shared with The New York Times.
The flurry of real estate activity in the defense sector has been buoyed by global conflicts that have accelerated the production of weapons. The Department of Defense’s budget was $841 billion in the 2024 fiscal year, up from $816 billion in 2023, both record amounts. And while Defense Secretary Pete Hegseth wants to cut 8 percent from defense budgets in each of the next five years, he is putting a priority on spending on drones and autonomous weapon systems. That has opened up opportunities for defense tech start-ups, which can typically move their innovations to the battlefield more quickly than traditional defense contractors can, theoretically saving the government time and money.