A new report from NAIOP, Commercial Real Estate Development Association says advancing automation is presenting new opportunities for developers and owners to create and retrofit properties big and small.
The downloadable report, "The Evolution of the Warehouse: Trends in Technology, Design, Development and Delivery," was prepared by researchers from the Real Estate Innovation Lab at the Massachusetts Institute of Technology (MIT) and released on Oct. 20.
In its announcement, the NAIOP says warehouse and other distribution properties will "benefit considerably" from advancements in data analytics, ubiquitous sensors, artificial intelligence, and autonomous vehicles.
"Logistics technologies and their applications are creating new opportunities for developers, building owners, and other commercial real estate professionals," the report says.
Greater automation and emerging design trends
The report notes the growth of e-commerce has driven growing demand for industrial real estate, for both large regional distribution and small fulfillment centers in urban and suburban areas. Making more efficient use of those spaces can add value to those investments. And that's not all.
The researchers focus on three main areas:
- How expanding e-commerce sales and speeding up delivery times are supporting greater automation within distribution facilities.
- How emerging trends in logistics technologies affect the design and use of industrial buildings.
- How new technologies and supply chain patterns are creating opportunities for innovative building design and blurring boundaries between industrial and retail uses.
The researchers say: "Technologies that increase throughput and make more efficient use of vertical space can increase the value of existing or planned logistics facilities. These and related transportation technologies can also make smaller buildings in urban locations attractive redevelopment opportunities, and they can increase the profitability of new multistory warehouses."
Going beyond traditional industrial warehouses
Investors directly in commercial real estate and through REITS should also take note: These opportunities will extend beyond the traditional industrial segment.The MIT researchers said, "Space within malls, shopping centers, or individual retail locations can be devoted to distribution, helping the viability of properties that have experienced a decline in foot traffic and creating advantages for retailers that embrace hybrid distribution models."
They add that a creative approach to integrating industrial spaces into previously unexpected places will be key to success as investors and developers seek to leverage opportunity in the disruption technology, bringing "traditional ideas about the role and location of industrial space."
The Millionacres bottom line
The report is free and goes into extensive detail about why these trends matter. Reading it in toto could inspire some thought and action by investors in areas they hadn't before seen such opportunity.