By James A. Schnur, CCIM
President and Designated Managing Broker
Integrated Real Estate Solutions
The shockwaves of change that e-commerce has unleashed continue to ripple outward. As online buying is further ingrained into the daily life of consumers, the fundamental expectations of what it means to buy a product continue to change — consumers continue to expect products to be delivered faster, and cheaper than ever before. Accommodations for this monumental shift in buying attitude affects how companies meet the expectations of their customers, primarily through adjustments to major portions of company warehouses and distribution centers to be specifically tailored for automated solutions.
The rise of automation parallels the rise in e-commerce, as the technology solution takes over the more repetitive tasks, freeing up skilled workers to focus on a broader variety of work. But much like a human workforce, getting the most out of an automated workforce requires specific considerations for the space they’re working within. For instance, the average ceiling height for warehouses is on the rise, increasing from an average of 25 ft to anywhere between 32–36 ft. This extra headspace doesn’t make a difference for the majority of human workers, but it’s vital
to accommodate larger, space-intensive automated machinery, as well as providing clearance for the increased drone fleets used within these spaces.
As these spaces get taller, they’re also becoming multi-level, multi-use spaces. A popular concept in Asia, the concept of multi-level warehouses is becoming more popular in the U.S. as warehouse and distribution spaces become more closely located to urban centers — which also means they’re sitting on pricier land. To balance the disparity in cost, it makes sense to take full advantage of the space provided, and build up rather than out. The additional space not only provides additional space to store and move products — such as the 27-story warehouse in Hong Kong — but it also provides the ability to operate a hybrid facility that incorporates both warehouse and office capabilities, to cut down on overall operational costs, and take greater advantage of the location to prime urban labor markets.
How products and supplies move between locations is being re-shaped by automation, as well. Though the technology isn’t as prevalent, increasingly, companies are looking to the future of material handling with autonomous vehicles, and automated loading and unloading, and allowing the view of these technologies to influence how they look at their dock spaces Primarily, the number of available docking spaces within a warehouse or distribution center is on the rise, particularly for facilities poised to operate as “last-mile” delivery hubs. Why? Because an increase in dock spaces provides ample space for autonomous delivery trucks, which can be received 24/7, and are a necessity to ensure the ever shorter delivery times promised by retailers.
What the rise in automation is truly forcing is the specialization of space. No matter what industry a company is in, determining the space that the company needs versus what space a company currently occupies is fundamental to whether the space is “right”. As companies adopt more automated systems into their workforce, the space needs that they will have to take into consideration will dramatically shift, and will likely lead to a need to re-evaluate space as more automation is brought into the fold. As the focus shifts to relocation options and potential of building up in an urban space versus building out in a rural space come into play, working with a commercial real estate professional is the best way to ensure that your business needs are taken into consideration throughout the relocation process. Integrated Real Estate Solutions has ample experience with corporate relocations, and our professionals are dedicated to providing you with solutions that make sense for your business.
Integrated Real Estate Solutions, Inc. provides clients with the in-depth knowledge and experience that is critical to determine the right path to your next move, lease renewal, or strategic repositioning of your real estate portfolio. Contact us or call 847.550.0160 today about your needs, and put our success to work for you.