Warehouse Automation in Industrial Real Estate

The industrial real estate landscape is evolving rapidly, driven by innovative technologies that are reshaping the way space is utilized and optimized. Our Market Intelligence team is committed to helping you stay ahead of the curve by identifying key trends that maximize both space and operational efficiency. With customized insights grounded in real-time data and extensive industry expertise, we ensure you’re equipped to make informed decisions in this competitive market.

Let’s dive into a topic that’s transforming warehousing and industrial spaces alike—warehouse automation and the rise of Vertical Lift Modules (VLMs).

Warehouse Automation is Revolutionizing the Industry

Industrial real estate is no longer just about square footage; it’s about innovation, efficiency, and adaptability. With the demand for faster operations and smarter space utilization growing exponentially, warehouse automation has taken center stage.

One standout technology in this innovation surge is the Vertical Lift Module (VLM). These storage systems are designed to maximize warehouse vertical space, dramatically reducing the overall footprint needed. These units can provide up to 80% more storage capacity compared to traditional shelving methods, making them a game-changer for businesses that want to achieve more with less.

Why Automation is Booming

1. E-Commerce Growth is Driving Change
   The meteoric rise of e-commerce cannot be understated—globally, it is projected to grow at a CAGR of 14.7% through 2027. With this increase in demand comes the need for warehouses that can process high volumes of orders accurately and efficiently, a task for which automated systems like VLMs and Automated Storage and Retrieval Systems (ASRS) are perfectly suited.
2. Rising Labor Costs and Workforce Shortages
   With labor costs on the rise and workforce shortages posing challenges across industries, automation offers a much-needed solution. Systems like VLMs reduce the dependency on manual labor while creating opportunities for skilled roles in managing and maintaining advanced technology.
   
   Additionally, as the cost of automation is predicted to drop by 20-30%, these systems are becoming increasingly accessible to businesses of all sizes.
3. Urban Real Estate Pressures
   Land in urban centers remains expensive, with industrial rents expected to rise by 5-8% in major markets this year. For businesses operating in these areas, vertical storage solutions like VLMs are invaluable in optimizing available space. By utilizing height instead of floor area, businesses can save significantly on real estate costs while maintaining operational efficiency.
4. Advances in AI and Robotics
   Thanks to significant advancements in robotics, artificial intelligence (AI), and machine learning, warehouse automation systems are now more efficient, precise, and adaptable than ever before. The global market for ASRS alone is expected to reach close to $12 billion this year, a testament to its growing adoption and importance.

Benefits of Automation for Industrial Real Estate

The integration of innovative storage and retrieval systems like VLMs is influencing the industrial real estate market in profound ways. Facilities equipped with advanced automation technology are not only more efficient but also see higher valuations.

Changing market dynamics are encouraging developers, brokers, and investors to design and prioritize automation-ready spaces, giving these properties a competitive edge in a tech-driven market. Tenants are now favoring facilities that support innovative technologies, knowing they’ll benefit from better operations and reduced costs.

Preparing for the Future

Technology is evolving rapidly—and so are customer expectations. To stay competitive, industrial real estate stakeholders must understand and adapt to automation trends shaping the market. Here are a few ways industrial spaces can prepare for the future:

• Plan for Technology Integration
  Opt for designs that accommodate modular and adaptable technologies like VLMs and ASRS.
• Optimize for Vertical Space
  Leverage high ceilings in warehouses to make the most of every cubic foot of your facility.
• Focus on Accessibility
  Ensure your property can support automation.

Final Thoughts

Warehouse automation is an integral part of running efficient, cost-effective industrial operations. Systems like Vertical Lift Modules and Automated Storage and Retrieval Systems are reshaping how we think about space and efficiency, driving higher productivity and creating smarter, more sustainable solutions. For supply chain managers, property developers, and industrial tenants alike, integrating automation into business and real estate strategies is no longer an option—it’s a competitive edge.

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