Disruption comes to the South Florida supermarket

Automation is the new black when it comes to speed and cost efficiency. Miami’s own Sedano’s grocery outlets, in partnership with Massachusetts-based Takeoff Technologies, is wearing this new style proudly as they deploy what is being called the world’s first “robotic grocery store.”

If successful, this new model will offer other retailers a brave new world of online growth at a fraction of the current cost of doing business. They will roll out the technology in 14 of Sedano’s 34 locations, and Takeoff plans to launch similar programs at five additional regional and national U.S. retail chains.

The process is fairly simple: customers order groceries from their phone or laptop, artificial intelligence-enabled robots at Takeoff’s automated fulfillment centers fetch the items, and Sedano’s staff helps sort and get them ready for in-store pickup or out the door for delivery. Takeoff’s system then automatically restocks inventory as needed, filters customer service requests, and provides reporting and analytics.

Cheaper, faster service

The grocery business can be cutthroat. Its low margins and high volume have companies always on the lookout for an edge. Robots bring a new opportunity to simplify processes and cut down on labor expenses. And the sector is growing, expected to reach $100 billion by 2022, with the overall warehouse robotics market expected to increase at a compound annual growth rate (CAGR) of 11.8 percent between 2017 and 2022, putting it at $4.44 billion in value.

These automated shoppers can yank 60 items off the shelf in a manner of minutes; 900 per hour. By contrast, living, breathing shoppers can only grab 60 per hour. Every week, the system processes as many as 3,500 online orders per location, with promises of delivery within two hours. These numbers dwarf those seen by traditional stores that rely almost exclusively on manual processes.

Automation means fewer square feet

These automated micro-fulfillment centers offer efficient service and significant cost savings because, among other reasons, they don’t take up as much room. They each need only 8,000-10,000 square feet, sometimes installed in the grocery store itself, which greatly shortens the distance between supplier and retailer and saves a boatload of cash, since they don’t have to build a physically separate distribution center.

It also shortens the distance between warehouse and customer, with orders able to be picked up mere steps away from where they are stored and delivery options being that much faster.

More examples of grocery automation

While a pioneer in many respects, Sedano’s is not the only grocer to dip their toe in automation.

  • Ahold Delhaize, the world’s eighth-largest grocery retailer, plans to speed up orders and trim delivery times with their own automated warehouses.
  • Albertsons hopes to establish a more efficient way to put together bags for delivery using automated packing solutions.
  • Walmart, the 900-pound gorilla in the room and the main competition for Amazon, will capture approximately 1.8 percent of U.S. consumer grocery spending this year (up from 0.8 last year) and is in the process of testing whether robots can give them an edge in fulfillment times.
  • Ocado, a U.K. online supermarket management firm that plans to enter the U.S. market via Kroger. They plan to pack 65,000 orders per week and boast battery powered units with charging stations.

In its quest to solve the conundrum facing all modern supermarkets – offer a robust and changing selection of products at a reasonable cost and still bring in enough profit to pay the bills – South Florida’s own Sedano’s has embraced disruption and is charting an exciting course towards the future. The impact on CRE will be interesting, especially if automation moves grocers toward finding smaller spaces in strategic locations – not to mention the impact the technology will have on other retail businesses.Morris Southeast Group keeps abreast of innovation and trends in South Florida business and their potential impact on CRE, and we’d be happy to help you find your next investment opportunity. For a free consultation, call us at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.

The 3D printing revolution is on the horizon and the technology is already impacting construction and CRE

Although it was developed in 1984, it took until quite recently for 3D printing to become part of our everyday vernacular. In recent years, its use has grown by leaps and bounds – from printing artificial limbs and organs to weapons to food. It seems that the only thing that might hold back 3D technology from here is lack of imagination.

That’s why it’s time for anyone interested in CRE to pay attention. While experts debate how long it will take for 3D printing to become a viable, common technology in the real estate business, there is no doubt that it will – and that it is set to have an impact on all aspects of the industry.

The 3D printing future is playing out now

When it comes to engineering and design, 3D printing was once considered a novelty act – a tool to create three-dimensional models of future projects that clients could examine from all sides – and household décor items. Printers, though, have gotten quite a bit larger and the technology has jumped forward.

Using a technique called “additive building” or “additive manufacturing,” the 3-D printer scans a blueprint of a structure, and then “prints” with a soft concrete that is applied in stacked layers. Around the world, construction and technology firms have joined forces to make this technology possible, and nations are taking notice:

  • China: In 2015, a 3D printed apartment building was constructed at a rate of one floor per day for $160,000.
  • Japan: In less than 45 days, a Japanese-based firm constructed a 4,305 square-foot 3D printed concrete house that could reportedly withstand an 8.0-magnitude earthquake.

  • Dubai: Perhaps because of the available capital to invest in the technology, innovation here is the greatest. It’s home to the world’s first 3D printed office building – completed in 17 days. In addition, with the help of a 20’ tall, 120’ long, 40’ wide 3D printer, a 2,700 square-foot office space was created on the campus of the Museum of the Future. Government officials are so taken with the technology that they have committed to the goal of 25% of Dubai’s buildings being 3D printed by 2030.

  • As a result of these projects, numerous other countries from Egypt to Haiti to El Salvador are all embarking on 3D printing projects to solve housing crises and build in difficult-to-reach locations where traditional construction methods are impossible at best.

3D printing on the home front

In the United States, 3D printing has been relegated to specific projects, such as efforts to restore the facades of historic buildings in NYC or as exhibition projects on college campuses. Much of this is because the long-range vision for 3D technology has outpaced what already exists. While some imagine a future of entire 3D-printed communities filled with homes for less than $4,000, there simply is not a system in place for field inspections and building codes to ensure a project’s structural, electrical, and plumbing integrity.

There’s also the matter of jobs. 3D printing is sure to cause a disruption in the job market, particularly in the construction field. While there will be a greater need for designers, engineers, and innovators, many construction workers will have to be re-trained to be incorporated into this new field or find work in other areas.

3D printing and the real estate industry

Similarly, the real estate industry will also have to adapt to a 3D future. As the technology becomes more cost effective and readily available, professionals will have to understand the technology and help clients to also envision 3D possibilities – from new construction to remodels to interiors.

At the same time, available properties will also undergo a transformation. Some retail properties, for example, will only need to house a 3D printer and it’s supplies for print-on-demand products; everything from housewares to furniture to whatever else one can imagine. Similarly, small industrial properties and warehouses may again be re-purposed, this time into local 3D printing centers or storage and fulfillment facilities.

If all of this sounds like the stuff of some far-fetched sci-fi film, Morris Southeast Group would like to remind everyone that it wasn’t so long ago that virtual reality just seemed like a neat gimmick. Today, it can be a necessity for a real estate deal. Similarly, e-commerce has radically reshaped CRE as well as commerce as a whole in a relatively short time. This is why we keep an eye on the future while providing top-notch service and investment advice in the present. To learn more about property investment opportunities, and/or our other services in South Florida, call Morris Southeast Group at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.

CRE and LED is a bright idea

When it comes to attracting quality tenants, there’s already plenty of information about using lighting. Much of it, though, has to do with landscape lighting, security lighting, and specific lighting – such as ambient and task – for residential properties.

When it comes to commercial properties, lighting can be just as crucial to attracting top-quality tenants. For years, LED has been the standard but we are now experiencing a lighting revolution. In fact, new and improved technologies are almost being developed as fast as, well, the speed of light.

A bright idea is getting brighter

The first LED light was developed back in 1962, and its early usage was usually in the computer tech industry. Over the decades, improvements in delivery of LED light, as well as its relatively low cost and energy efficiency, have made LEDs very common. This increase in demand combined with what some experts see as a glut on the market have led to a push for differentiation – and this, in turn, is leading to customizable options for specific industries.

  • Indoor spaces exposed to daylight have been shown to improve worker morale and productivity, as well as regulate human circadian rhythms. The good news is that high-CRI (Color Rendering Index) LED bulbs are able to mimic natural daylight, which can be tremendously appealing to potential tenants.
  • Similarly, tunable lights can create different moods for different tasks. Cooler lighting with high intensities is better suited for concentration and focus; warmer lighting and lower intensities are ideal for creativity and cooperation – and all of this can happen in a single space with the help of a switch.
  • For retail tenants, there is fierce competition as they battle to offer shoppers a new and more personalized experience. The combination of LED lights and smart mirrors in the dressing room allows customers to adjust lighting so they can see clothing at different times of day. An outfit’s color, for example, will look very different in the white light of midday and the warmer tones at sunset.
  • In the simplest of terms, connected lighting is a system of light fixtures, connected to a network, that can send and receive data. Data can be used to better manage the building, from usage to temperature to humidity to efficiency. This system can either be delivered through a retrofit of existing light fixtures (also known as network control lighting) or Power-over-Ethernet, which is the installation of an all-new connected lighting system.

Lighting delivers more than light

Perhaps the most exciting innovation in the world of light is Li-Fi, which is short for Light Fidelity.  Presently, we are all familiar with broadband and Wi-Fi – and just as the name implies, Li-Fi means the light bulb is the router, with data traveling at 224 gigabits per second on the rapidly blinking waves of an LED bulb. In other words, where there is an LED light bulb, there is Internet.

Presently, a major disadvantage is also one of its advantages. Since LED light cannot penetrate walls, a signal’s range can be limited. On the other hand, it means that a company’s internal communications are secure from users in another room, building, or even outside.  

The brightest and the best in SoFlo

The team at Morris Southeast Group is always excited about advances in technology and its impact on commercial real estate. It’s important to keep properties relevant to meet the changing needs of owners, investors, and tenants. To learn more about property investment opportunities, and/or other services, call us at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.

Listen, communicate, and collaborate to get a CRE project off the ground

Most urban dwellers agree that development projects such as renewable energy, homeless shelters, public transportation, and affordable housing are good for their communities. But when it comes to where those projects are located, many local residents come down with a case of NIMBY (Not in My Backyard). One of the many results of this syndrome is an increase in land use restrictions, which a 2015 study estimated cost as much as $1.5 trillion in lost productivity.

In South Florida, developers have had their successes and failures in countering the NIMBY response. Below we detail several thoughtful, proactive ways to engage a community and respond to concerns about a new development.

Put yourself in their shoes

It can be tempting to adopt a defensive posture when a community group pushes back on a project. In these situations, step back and imagine the scenario from their side. We all have families, live in neighborhoods, and want a quiet, safe place to call our own. Anything that seems to threaten that can be seen as dangerous and scary. Show respect for local residents and take the time to listen to their concerns.

To effectively mitigate this opposition, it’s crucial to address its root causes, which often fall into these buckets:

  • Misinformation. In the digital age, incorrect or biased information can circulate in a heartbeat. Correcting it quickly and clearly is essential to effective community engagement.
  • Conflicts of values. Odds are, project leaders and community residents actually share a set of values and goals (reducing unemployment, increasing local resources, improving schools) but have different opinions on how to get there. Focus on what you share and make the case for your project in that context.
  • Emotional needs. In the end, local zoning boards or planning commissions have the same desire – they want to be heard and expect to be involved in the decision process. Approach them with deference and treat them as partners. A gesture as simple as that can go a long way towards turning adversaries into allies.

Personal connections made in one-on-one conversations or meetings of small groups are the most effective way to build support. Large, public hearings are more difficult to manage and can often fuel the fire of resistance by giving potential opponents an opportunity to network on site.

Most people are not economists or urban planners. They don’t care about the 30,000-foot view; they care about the view from their porch.

Engage your supporters

An essential starting point in working against any NIMBY opposition is to find those who already believe in your cause. People will follow the crowd and if they believe that a majority of their friends and neighbors support your project, they are more likely to follow suit.

If you can rally supporters to speak out on your behalf – in person or online – even better. Residents who may be on the fence are more likely to lean in your favor if they hear testimony from their neighbors in a public forum or see positive chatter on social media.

Identify and target specific pockets of support:

  • People who benefit directly from the project, such as construction workers, property owners, new hires, and suppliers.
  • People who benefit indirectly from the project, such as area small business owners or local chambers of commerce.
  • People who make direct use of the project, such as families who need public housing or commuters who need affordable transportation

Listen and communicate

A comprehensive communication strategy can work wonders to convey a message consistently and clearly. As one-on-one interactions with residents inform your understanding of the issues involved, incorporate them into your messaging. Proactively address the most glaring concerns – traffic and parking, environmental impact, strain on services, neighborhood preservation –and your message will be one of collaboration rather than confrontation.

Share as many details of the project as possible so that they become familiar and, frankly, unremarkable, to your core audience. The more ordinary your plans seem, the less misinformation is likely to circulate.

Every NIMBY movement has its own unique motivations and local roots and thus requires a unique and locally-inspired approach. The more time you take at the outset to listen, understand and reflect back the community’s values, the more likely you are to gain supporters and minimize naysayers. We at Morris Southeast Group are proud community partners and are always tuned to the needs of our neighbors. For a free consultation on commercial real estate investment or property management services, call us at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.