The demand for industrial HVAC is increasing in 2025, and commercial property managers should take notice. In years past, HVAC systems were often seen as background infrastructure—necessary, but not strategic. That’s no longer the case. Across the country, new industrial developments, stricter building standards, and rising energy costs are pushing HVAC systems to the center of property planning, tenant management, and capital improvement strategies.

For industrial properties, HVAC systems must do more than maintain comfortable temperatures. They regulate airflow for cleanrooms, control humidity in production spaces, support automation in advanced manufacturing, and operate efficiently across massive square footage. In 2025, the combination of evolving tenant needs, federal regulations, and smarter technology is driving a notable shift in how these systems are built, upgraded, and managed.

This blog breaks down the key reasons industrial HVAC demand is rising this year and outlines what property managers need to know to stay ahead of market expectations.

Growth in Industrial HVAC Market

The industrial HVAC market is projected to grow by $6.81 billion between 2025 and 2029, according to a report from Technavio. Sectors like food processing, manufacturing, and pharmaceuticals are leading this growth as companies invest in more efficient systems and seek to comply with new regulations governing emissions and energy use.

Many industrial HVAC systems installed in the early 2000s are now reaching the end of their useful life. Property managers across the U.S. are budgeting for major retrofits or full system replacements in the coming years. At the same time, energy regulations at the local, state, and federal levels are placing added pressure on building owners and managers to reduce consumption and transition away from systems that rely on outdated or non-compliant refrigerants.

According to the same Technavio report, industrial clients are increasingly prioritizing energy savings and operational resilience. HVAC systems that can monitor their own performance, optimize energy usage in real time, and reduce downtime are becoming standard requests during tenant buildouts and property upgrades.

Industrial Construction Boom Driving Demand

Alongside replacement projects, demand for new HVAC installations is growing fast due to a construction boom in the industrial sector. From semiconductor plants and battery factories to e-commerce fulfillment centers and refrigerated warehouses, developers are breaking ground on facilities that require highly specialized HVAC systems.

The CHIPS and Science Act and the Inflation Reduction Act have unlocked billions of dollars in federal incentives for industrial construction. These new facilities are being designed with energy efficiency, clean operations, and technology integration at the core—all of which influence HVAC requirements.

For example, a semiconductor plant might need a climate-controlled cleanroom with strict air filtration, while an EV battery manufacturing site could need precise temperature regulation across thousands of square feet. These environments demand HVAC systems that are not only reliable but custom-engineered to meet strict operational standards.

SMACNA (Sheet Metal and Air Conditioning Contractors’ National Association) notes that industrial HVAC contractors are now being brought in earlier in the construction timeline to collaborate with project engineers, architects, and facility owners. Property managers overseeing new developments or major retrofits should expect to engage HVAC professionals early to avoid delays, scope changes, or compliance issues down the road.

Sustainability and Green Building Requirements

As sustainability becomes a core focus in the commercial property industry, HVAC systems are being evaluated through the lens of environmental performance. In the industrial sector, this trend is particularly important because of the size, complexity, and energy intensity of most systems.

A report from Transparency Market Research (TMR) projects the green HVAC market will reach $165.1 billion by 2035, growing at a compound annual rate of 7.0%. This growth reflects growing demand for HVAC systems that reduce emissions, qualify for tax credits, and align with corporate ESG goals. Many industrial tenants are aiming to meet internal carbon reduction targets, and that often begins with mechanical system upgrades.

Green HVAC systems now commonly include features like variable-speed motors, energy recovery ventilation (ERV), low-GWP refrigerants, and advanced zoning systems. Facilities with LEED certification or similar standards often rely on HVAC design to meet their energy benchmarks.

For property managers, this means factoring sustainability into planning conversations. If a building isn’t equipped with efficient or clean HVAC systems, it may be harder to attract tenants in industries with strict emissions requirements or corporate sustainability mandates.

Technology Advancements: AI and IoT Integration

New HVAC technology is changing how systems are managed and maintained. As equipment becomes smarter, facility managers can monitor performance remotely, detect inefficiencies early, and schedule maintenance based on real-time system data.

According to the Technavio report, AI and IoT features are now key differentiators in industrial HVAC equipment. Modern systems often come with digital dashboards, connected sensors, and built-in diagnostics. These features enable automatic alerts for maintenance needs, dynamic adjustments based on occupancy or weather, and usage reports that help operators plan ahead.

Smart HVAC systems can reduce long-term operational costs, improve occupant comfort, and reduce downtime due to unplanned equipment failure. They also generate data that can support sustainability audits and energy reporting.

For industrial buildings, where HVAC accounts for a large portion of overall energy consumption, these features offer significant savings. Property managers who invest in smart HVAC infrastructure can offer their tenants greater system visibility and reliability—especially important for logistics, manufacturing, and data operations.

Facility Planning and Contractor Engagement

With HVAC systems playing a larger role in facility functionality, early planning and strong contractor relationships are more important than ever. Whether you’re developing a new site or managing upgrades to an existing one, waiting until the last minute to plan HVAC work can lead to delays, cost overruns, or code violations.

Industrial properties often have unique mechanical needs that vary by use case. A logistics company may require basic heating and ventilation in a high-bay warehouse, while a pharmaceutical company could need humidity control and particle filtration. These distinctions affect what kind of system is installed, how it is zoned, and how it is serviced.

Finding contractors who understand these unique needs can be a challenge. High demand for HVAC technicians, combined with more technical systems and tighter construction timelines, means that qualified professionals are in short supply. Property managers should begin the contractor selection process early and consider leveraging tools like BidSource, which can help connect them with qualified professionals who have experience in industrial HVAC systems.

Good contractor relationships are essential not just during installation but also throughout the life of the system. Preventive maintenance contracts, emergency service availability, and upgrade support all contribute to long-term performance and tenant satisfaction.

Visit Property Manager Insider For More Industry Insights

In 2025, industrial HVAC systems are no longer a behind-the-scenes consideration—they’re a central component of asset planning, tenant retention, and regulatory compliance. A mix of economic, environmental, and technological factors is fueling a rapid increase in demand for advanced HVAC infrastructure across the industrial sector.

New construction projects are breaking ground at record pace. Federal policies are encouraging the buildout of high-tech manufacturing facilities. Companies are pursuing sustainability goals that require HVAC system upgrades. And smart technologies are raising the bar on what systems can and should deliver.

For property managers, understanding these trends is key to making smart decisions that protect property value, reduce operating costs, and keep tenants satisfied.

To stay current on industry developments like these—or to find qualified HVAC contractors for your upcoming projects—visit Property Manager Insider for the latest commercial property news. And don’t forget to check out our BidSource tool to connect directly with trusted contractors who specialize in industrial HVAC systems.