09/07/2021 | by
Article Author(s)

As technological innovation results in more efficient supply chain distribution, changes are also occurring in traditional concepts of industrial real estate and where it should be located, says Steve Weikal, lecturer, researcher, and the CRE Tech lead in the MIT Real Estate Innovation Lab.

“Certainly what the industry thinks of as industrial real estate, or warehouse distribution real estate, has changed and will continue to change,” Weikal said on the REIT Report podcast.

“If we are able to use technology to provide distribution more efficiently, more effectively, and in smaller spaces, which is very often the case, can we now do that in structures and in buildings that we hadn't considered before?” Weikal said.

The proliferation of specialized data has enabled the industry to determine “the kinds of buildings that we need, the shapes, the sizes, and especially where they need to be located in order to make the global distribution system more efficient,” Weikal noted.

For instance, traditional industrial real estate functions might be able to be carried out in former retail or office space. Meanwhile, an “intriguing application” of technology would allow for micro pop-up distribution in the back-end or even front-end of grocery stores, he said. “There is this convergence of uses and the transformation of existing product types in a way that doesn't necessarily look like a warehouse.”

Weikal also noted that while technology is transforming the shape of industrial real estate assets, change is also occurring as a result of technology that is not attached to the structure itself, including robotic exoskeletons that allow humans to perform their jobs more safely.

“There’s all of the surrounding technology that will change the activity that goes on in the buildings and will integrate with the intelligence that's in the buildings themselves,” he said.