The industrial manufacturing sector is set for a renaissance with the return of U.S. government support that makes now an opportune time to get into these attractive real estate investments. Here are eight reasons why investing in industrial machine shops is a smart move in 2025 and beyond.

1. Upswing in Domestic Manufacturing Facilities

The prior Trump administration had a significant impact on the U.S. manufacturing industry through various policies and initiatives. Government support of domestic production facilities- that offer jobs and spur economic growth- is expected to continue in the new administration. This resurgence should make well-located, operational machine shops in the U.S. attractive to new investors. New demand is also likely to make securing investment opportunities in the sector more competitive over time, favoring early entrants into the sector. 

Pro Tip: Investors who are ready to lock in should book a call now to secure a position in Cash Flow VII closing in January 2025. 

2.  Rising Demand from Supply Chain Disruptions

The COVID-19 pandemic highlighted vulnerabilities in global supply chains, leading to increased demand for domestic manufacturing. Investing in machine shops allows investors to capitalize on the demand for locally made goods and services with direct investments into operating industrial production businesses backed by the value of their real estate facilities and machinery equipment. 

2. Technological Advancements and Automation

Machine shops are increasingly adopting advanced technologies, such as AI and robotics, to optimize processes and improve performance. This not only improves efficiency but also enhances product quality, making investments more attractive. Home Invest’s operational team has already improved profits in one of its machine shops in the fund with top line growth of (40% up YOY) under new management by prioritizing safety, operational gains, and customer growth through relationship building and modern marketing outreach. Investment in a Customer Relationship Management (CRM) system, as well as an Enterprise Resource Planning (ERP) system to track parts pays off quickly.

4. Value Creation Through Process Optimization

Invest in sites where there is an inherent opportunity to optimize existing processes that can significantly increase profitability. For instance, reducing the number of operations required for a part can streamline production and enhance overall efficiency. Larger production capacity and output typically contribute to strong long-term investment profits. 

5. Unique Manufacturing Capabilities

Investing in machine shops with specialized capabilities—like those producing large parts weighing up to 50 tons—sets these businesses apart. The machines and equipment producing these parts also hold inherent value (the machines in Home Invest’s shops range in value from $250-$1 million per unit). This uniqueness can lead to higher demand and better pricing power in the market, and investors gain a lien on the high-value equipment that reduces investment risk. 

6. Strong Partnerships and Competitive Advantages

It takes effort to develop and nurture partnerships with established suppliers and those facilities that have them, like Brinkman Tool & Die, provide a competitive edge. As new regulations, such as the CMMC 2 Info Security requirement, emerge, certified companies will have a significant advantage in the marketplace- and those who do not will have to exit the market. Home Invest’s managing partner, American Precision Partners, manages its shop portfolio with that remit to become more than just order takers as emphasized by its company motto to put the “part in partnerships.”

7. Focus on Safety and Employee Retention

Operators who emphasize the importance of safety and employee retention in their operations are better investment bets. A culture that prioritizes employee well-being not only fosters loyalty but also enhances productivity, leading to better business outcomes and less employee churn that could limit production outcomes.

8. Potential for High Returns on Investment but Limited Investment Opportunities

Industrial machine shop investments have strong investment profiles with return well above alternative investments. Home Invest structures its investment opportunities to offer attractive returns, appealing to both equity investors (with returns averaging up to 18-22 percent or for debt investors looking to become the bank as a lender offering 10% in fixed loans and monthly distributions. 

Conclusion

With rising demand, limited investment opportunities, and a focus on technological advancements, investing in industrial machine shops presents a promising opportunity in 2025. As the industry continues to adapt and grow, now is the time to explore how you can be part of this exciting sector before the limited availability of investment opportunities dries up. 

Want to learn more? Watch our live Webinar with an on-the-ground tour of our Machine Shop Fund assets now at homeinvest.com/brinkman. 

Ready to secure your chance to invest in a future that prioritizes innovation, efficiency, and sustainability on domestic soil? Book a call with one of our investment advisors now: homeinvest.com/book.