In every city there is a demand for warehouse space and manufacturing space, often times due to the size required by the company they are looking for inexpensive real estate relative to office space which is more expensive. The companies in the area tend to similar work and clusters of warehousing space bring employment to the area. Inside the warehouses, much of the movement of material and goods was done by hand or using power jacks, but times are changing and the pandemic of COVID met times changed faster than normal.

Technology is improving every year and one of the improvements is the world of robots. Given many of the jobs are repetitious. companies are eager to find a method to use a robot for the most repetition work and they are investing and finding robots to help the business.

In an article by Patrick Sisson of the New York Times News Service, robots are changing the workplace as companies spend billions of dollars on robotics. In the next 5 years, according to the Material Handling Institute adoption of robotics in warehouses is expected to grow 50%. The idea is the robots steered by software and AI can move boxes and products in a seamless environment.

The biggest company in the robotics industry is Amazon which accounted for 38% of the robotics investment in the industry in 2021. The company acquired the robotics company Kiva Systems and has deployed more than 500,000 units. In addition, it set up the Industrial Innovation Fund to invest in firms such as Agility Robotics.

Walmart recently announced a deal with Symbotic to bring its system of belts, pickers and autonomous vehicles to all of the retailer’s 42 main storing facilties.

Kroger has opened 5 of its 20 planned warehouses outfitted with the Ocado automated system for packing and shipping fresh groceries.

For investors in real estate warehouses, the challenge is old buildings will need 2 or 3 times the power generation of previous generations including the latest wireless and 5G networks or many will need upgrades to suit the demands of robots. At the moment, a human and a robot tend to have similar space requirements, but only one needs a lunch room.

Linking to dividend paying stocks, as robots become common in the workplace they will tend to have a brand name and the brand name will mean recurring revenues for the company. The capital cost for the robot and the operating cost to ensure the warehouse and factory remain operational. With every change there are opportunities, sometimes it is hard to see them but seeing where companies spend their money is a good way to start.

There are more questions than answers, till the next time – to raising questions.