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America’s defense establishment is rightly excited about the potential of unmanned ships. Companies like Saronic, Havoc.ai, Saildrone, and Blue Water Autonomy are developing fast, lethal, and scalable autonomous systems that could define the Navy’s future fleet. These firms, flush with venture capital and successful demonstrations, promise to rewrite maritime supremacy. And, it should be said upfront that as a commercial real estate advisor currently focused on these issues, I have a professional stake in these issues.
That said, even if startups clear the Pentagon’s “valley of death,” the fleet could remain a paper promise. Without financing for billion-dollar shipyards to build at scale, America’s unmanned ambitions could sink. Policymakers need to act quickly to break this bottleneck. To realize its unmanned fleet goals, Congress and the Pentagon should integrate acquisition and industrial financing reforms, including federally backed lease guarantees, public-private real estate investment funds, and maritime industrial tax incentives.
Who Will Build the Shipyards?
Prototype contracts and flashy demos don’t pay for 100-acre waterfront facilities. To go from a handful of vessels to a fleet of hundreds, these companies must eventually secure facilities capable of production at scale. And for all the talk about pulling defense startups through the valley of death, many of these firms now face a second valley, with no clear path across: the ability to enter into long-term leases because of the lack of underlying tenant credit.
The Infrastructure Challenge After the Valley of Death
Hardware manufacturing at scale demands a significant physical footprint. These companies aren’t looking to refurbish yesterday’s shipyards. Instead, they are pursuing ambitious plans to build the advanced, highly automated production facilities of the future, designed to accelerate output and meet emerging demand. But not every promising firm can marshal the resources or justify the risk of constructing massive infrastructure first and trusting that contracts will follow — especially when the customer has a reputation for unpredictability.
The conventional path to financing industrial facilities is straightforward on paper: Sign a long-term, bondable lease, a rock-solid commitment similar to a bond that reassures investors their returns are locked in over decades. A bondable lease requires the tenant to pay rent under virtually all circumstances, including damage, destruction, or default.
This arrangement allows landlords and lenders to finance massive construction projects with confidence that the asset will generate predictable cash flow. However, most defense startups, even the well-capitalized ones, aren’t investment-grade tenants. They’re early-stage, often pre-profit, and — especially over a 20-year period — heavily reliant on volatile government contracting revenue.
Even the Department of Defense can’t easily step in. The Anti-Deficiency Act bars federal agencies from committing to multi-year payments without congressional appropriation, limiting the Pentagon’s ability to co-sign leases or guarantee private financing. Meaning that while the Navy’s strategists envision a hybrid fleet of autonomous and crewed vessels, the practical reality is that builders of these new ships may face significant obstacles accessing the capital needed to produce them at scale.
Even the Best Need Help
During the earliest stages of development, these firms should — and often do — focus their capital on perfecting products and processes. Sinking hundreds of millions into a shipyard is not only inefficient but strategically unwise.
And yet, ironically, those construction costs often reappear later as pass-through rents in government contracts. In other words, taxpayers eventually foot the bill anyway, but the transaction costs and delays of this financing gap can cripple progress when time is at a premium.
If America wants autonomous vessels at scale, the country will need a capital structure that enables facilities to be built confidently and quickly.
The Pentagon’s Blind Spot
Programs like Defense Innovation Unit, AFWERX, and NavalX have made admirable strides in funding prototypes and early scaling efforts. The Defense Production Act has occasionally helped shore up critical supply chains. The new Office of Strategic Capital is a promising attempt to bring private capital into the defense-industrial base, and its initial focus — loan guarantees and equipment financing — could become a model.
But so far, none of these initiatives target the scale or complexity of real estate and infrastructure financing for unmanned maritime systems. There is no dedicated Defense Department mechanism to guarantee long-term leases, no systematic approach to subsidize facility development, and no bridge to help startups cross the infrastructure capital gap once they’ve survived the first valley of death.
This is not just a bureaucratic oversight. It’s an unforced error that risks ceding technological momentum to competitors who are more willing to blend state financing with private enterprise.
Other Sectors Have Solved This
We’ve seen the U.S. government intervene decisively to backstop critical industrial capabilities. In semiconductors, the CHIPS Act offers direct funding and tax credits to de-risk multibillion-dollar fab projects. The Department of Energy’s Loan Programs Office underwrites everything from battery factories to next-generation nuclear plants. Even the Export-Import Bank routinely guarantees financing for major defense exports. These are all deliberate policy choices to incentivize domestic production capacity.
It’s worth emphasizing that while some well-capitalized defense companies have secured large facilities, they did so opportunistically and with strong internal balance sheets. Smaller firms or new entrants without a track record — and without comparable credit — face a steeper climb.
It’s also essential to recognize the strategic context driving urgency. China currently produces nearly 50 percent of the world’s commercial ships, thanks to a state-backed shipbuilding sector that enjoys vast subsidies, dedicated financing, and continuous investment in industrial capacity. By contrast, the United States accounts for less than 1 percent of global ship production — a gap with direct implications for national security and economic resilience. The facilities that would enable large-scale autonomous vessel production could also help rebuild American commercial shipbuilding, strengthening the entire maritime industrial base. Investments in these yards and factories are not just about a handful of defense contracts — they are about restoring the capacity to build at scale, whether for naval deterrence, sealift, or commercial competitiveness.
Maritime Prosperity Zones: A New Tool to Incentivize Investment
To address this, Congress is now exploring Maritime Prosperity Zones, modeled after the broader Opportunity Zones created in 2017. These zones would offer investors significant tax benefits — deferrals or exemptions on capital gains — in exchange for committing long-term funds to maritime and shipbuilding infrastructure in designated regions.
If implemented well, Maritime Prosperity Zones could do two things: offset the higher risk of defense facility investments and attract patient capital that might otherwise flow overseas. By explicitly tying tax incentives to productive shipbuilding and defense-related projects, this policy could jumpstart new facilities in communities that already have industrial infrastructure and skilled labor.
This approach carries caveats: Safeguards should ensure the benefits don’t leak into unrelated real estate speculation. But the idea signals a recognition that the United States cannot rely on organic market forces alone to rebuild its maritime industrial base.
Solutions Worth Pursuing
If the Pentagon wants to operationalize the unmanned fleet vision, it should pair acquisition reform with industrial financing reform. One practical measure would be establishing a federally backed lease guarantee facility that can co-sign or backstop long-term obligations for strategically important production sites. Such a program could mirror Export-Import Bank’s loan guarantees but be tailored to domestic defense production, unlocking lower-cost private capital. Another approach is to stand up a public-private real estate investment trust or dedicated fund to build and lease facilities to non-traditional defense firms, with the government participating as a first-loss or preferred equity investor to lower perceived risk and attract institutional capital. Congress should also advance legislation to designate maritime opportunity zones with robust tax incentives specifically tied to productive shipbuilding and industrial investments. Structured carefully, this policy could unleash billions in sidelined private funding. Finally, the Defense Department should work with Congress to develop programs allowing them to commit to multi-year procurement contracts once prototypes are proven. This predictable demand signal is the most powerful catalyst for financing. Additionally, the Pentagon, or trusted partners, could act as anchor tenants in shared-use production facilities, spreading fixed costs and enhancing creditworthiness.
A Final Thought and a Call to Action
This is not a problem of ideas. It’s a problem of coordination. The capital is there. The talent is there. The demand is growing. And if we’re honest, these products — and the factories that build them — are essential to maintaining American maritime dominance.
What’s missing is a coherent mechanism to bring all these elements together at scale. The strategic cost of inaction is measured not only in delayed delivery schedules but in ceding technological advantage to adversaries whose state-backed enterprises don’t suffer from the same constraints.
Policymakers should act with urgency. No amount of prototype success or acquisition reform will matter if the infrastructure to mass-produce unmanned systems never materializes. The future fleet is waiting, and so are America’s adversaries.
Let’s not allow promising technology to stall on the docks for lack of financing. Let’s build the shipyards that will bring the unmanned fleet to life.
Mark L. Wooters is an executive managing director at Cushman & Wakefield where he advises a variety of landlords and tenants in their real estate decisions.
Image: Midjourney
