Since 2022, Department of Defense-awarded contracts have grown steadily and are fast approaching $500B annually for 2024. Increases in funding at both the federal and VC level for aerospace and defense (A&D) companies will likely lead to increased leasing activity in the future. As the A&D sector heats up, JLL identified six trends to watch in 2025:
- Emerging markets will be catalysts for growth as firms strategically target regions with strong talent and cost advantages: Since January 2020, there are 5 markets that have seen A&D job postings increase by over 300%: Wichita, KS; Grand Rapids, MI; Savannah, GA; Cincinnati, OH; and Indianapolis, IN.
- Increasing SCIF requirements will drive defense contractors to seek out cost-effective solutions: The demand for Sensitive Compartmented Information Facilities (SCIF) space, alongside new government regulations that require facility upgrades, is prompting contractors to find innovative, cost-effective solutions for secure workspaces.
- The human experience will be central to design as the workplace is used for talent attraction and retention: Unlike other industries, the aerospace and defense sector often has unique space requirements due to the secure nature of the work.
- A&D companies will use advanced technologies and AI to enhance operational efficiencies and inform portfolio strategy decisions: A JLL conducted survey found that 82% of leading A&D companies are either currently investing or are exploring investment in AI technology. Facilities management and portfolio strategy are the top two areas aerospace and defense leaders believe AI will be the most impactful.
- As demand for industrial space in the A&D sector increases, firms will continue to prioritize strategic portfolio management: A&D firms will leverage their real estate portfolio for cost savings, with varying impacts across asset types due to differing demands for space.
The research is available for download here or as an attachment by request. Also, we have Trends to Watch research available for other industries, in addition to the larger Occupiers Trends to Watch piece. Let me know if you’d also like to see outlook information on:
- Higher Education
- Financial Services
- Healthcare
- Industrials
- Insurance
- Life Sciences
- Technology
