Tony Mueller is a vice president at GRS Group. He can be reached at  312.476.7621 or via email at tmueller@grs-global.com.

Big distribution-center warehouses on the outskirts of cities are likely the first things people think about when imagining the industrial sector of commercial real estate. Soon, though, those mental images could transform into ones of high-tech-driven examples of innovation.

The insatiable demand by consumers for e-commerce products will drive more assets closer to the city centers, buildings need to be heightened to make room for more product, spaces will be need to reconfigured to make way for robotic workers, and 3D printing will heavily influence the sector.

All these changes are detailed in a new Cushman & Wakefield report titled “Tech Disruptors and the Supply Chain.” (Download here.)

It turns out that industrial real estate is due for an overhaul, anyway. 

Cushman says that two thirds of all industrial inventory in the country is more than 20 years old, and more than half have ceilings under 28 feet, which is below the 36 feet that distributors increasingly require. And new facilities’ square footage is getting bigger to make way for the sought-after space and major demand. There was 126.8 million square feet delivered during the second quarter, and even with all of that addition, vacancy rates remained at a historically low 4.9 percent.

But it’s not just the size of spaces that’s changing. Their placement in relation to cities is expected to change as well.

The usual suspects, such as California’s Inland Empire; the areas around Atlanta, Dallas, Chicago, eastern Pennsylvania, and other hotspots for industrial likely won’t change. 

However, with the advent of driverless freight-trucking in the next several years, distribution centers and warehouses will be able to locate far away from cities, where real estate prices are least expensive. After all, driverless trucks won’t need to switch sleepy drivers. These facilities will have the least need for human workers and will be mostly automated.

Another thing that could be automated is the design of industrial assets. 3-D printing, though several years away from becoming any kind of norm in commercial real estate construction, could work better with those types of shells than more intricate designs, such as multifamily. 

On the other end of that spectrum, due to shoppers wanting everything possible as soon as possible via e-commerce channels, other industrial properties will be located within cities. Called last-mile warehouses, they are presenting redevelopment opportunities of outdated facilities and, in the meantime, possibly invigorating blighted neighborhoods.

About GRS Group

GRS Group is a leading provider of commercial real estate (“CRE”) services worldwide. With offices across the United States, Europe, and affiliates around the globe, GRS Group provides local market knowledge with a global perspective for institutional real estate investors, occupiers and lenders worldwide. The GRS Group team has evaluated and advised on over $1 trillion in CRE transactions.

Through the company’s proprietary management process, Global Services Connection, GRS Group delivers an integrated suite of services including Financial Advisory, Transaction Management, Assessment and Title Insurance.  We provide a single point of contact, capable of leveraging the GRS Group portfolio of companies and delivering customized solutions to assist our clients in achieving their investment goals.