CBRE: Technological Innovation Will Fundamentally Transform Industrial Real Estate

Technological revolutions in transportation and manufacturing will mean a tectonic change in industrial real estate, according to newly released CBRE research. The report specifically singles out autonomous trucking, 3D printing and automation in industrial facilities and discusses each technology’s ramifications for property and supply chains.

CBRE head of industrial & logistics research in the Americas David Egan told Bisnow that while supply chains are constantly and gradually modernizing, there will be some appreciable leaps—especially surrounding automated vehicles—in the next five years.

After that initial period, he expects another 20 years for the world to truly understand the ramifications of these innovations. “It’s hard to say what the next leap will be [after automated cars],” he says, “but I expect that by 2025 (if not earlier) we’ll see much more automation on the road and in warehouses, which will change the locations and designs of warehouses and supply chains."

The research singles out autonomous trucking as a key development area. Freed from the limitations of a human driver who can only cover 3,000 miles a week or 70 hours of drive time, cargos will be able to travel greater distances in less time. The trend could result in users relocating distribution hubs to rural, less expensive areas.

3D printing, expected to grow into a $21B industry by 2020, could push suppliers closer to their consumers. The need to manufacture on-demand goods for quick delivery implies companies might shift to “last-mile” distribution facilities that are a short ride away from the end user. Raw “printing” materials used in 3D manufacturing could also lead to greater on-site storage needs.

Another major force of change could be increasing automation in industrial facilities. Greater reliance on robotics could mean significantly lower labor costs and more efficiencies. These automated buildings of the future will require significant investment in redesign and IT infrastructure.

Getting to this future will require a few additional steps, according to Egan. While progress is being made on the technology front, adoption rates still continue to lag because people might be reluctant to trust a computer to handle a human's job, he said.

Policy and legislation can address this gap. “If laws are gradually phased in which, over time, mandate increasingly more of this tech in our vehicles, we’ll become accustomed to the tech and we’ll be more trusting of it as it becomes part of our everyday lives and it becomes evident how good the tech can be,” David said.