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The New Industrial Revolution - Automation and the Revitalization of Supply Chains

As a result of growing e-commerce sales, the amount of goods transported through industrial facilities across the country has increased significantly. In order to capitalize on this growth and remain competitive, companies are modernizing their warehouses to increase operating efficiency and shorten delivery times. Furthermore, many industrial users are looking to automation as a tool to increase efficiency, promote warehouse employee safety and address rising labor costs due to the scarcity of warehouse workers across the country.

In this research paper, we will discuss the cost-benefit tradeoff for automating industrial facilities and why we believe investing in automation is accretive for both landlords and tenants. From a tenant perspective, we believe investing in automation by working with landlords to capitalize the cost of automation within rent expense can be an attractive strategy. This strategy causes a minor increase in a relatively small supply chain cost category (rent and facility costs) in exchange for significant cost savings within much larger supply chain cost categories (primarily labor as well as transportation), which should lead to increased profitability for the company.