3D-Printing and the Future of Real Estate
One of the most intriguing, and potentially disruptive, technologies currently emerging is 3D printing. While still expensive and relatively unpolished, this new method of manufacturing products – from medical devices to airplanes – could be on a path to revolutionize retail, shipping, and the general need for space. Currently, 3D printing is most often used in the real estate industry as a way to create scale models for new developments. But as the technology grows and becomes more commonplace, it is important to realize that there may be huge changes coming to real estate from this emerging technology.
While it is currently used primarily for scale models of real estate properties, 3D printing may be headed towards the direction of “printing” the real estate itself. In fact, there have already been numerous examples of homes and microhomes that have been built by 3D printers. Engineer Alex Le Roux, a graduate student at Baylor University, designed and built a concrete 3D printer called “The Vesta” which successfully built a small house in 24 hours. This comes on the heels of the Shanghai-based Winsun building, in which a 5-story 3D printed apartment, built at a rate of one floor per day, cost $160,000 to erect.
While the structures built so far have been rudimentary in design, many countries have expressed strong interest in the technology as a way of solving affordable housing issues, primarily in developing countries. The World’s Advanced Saving Project (WASP) recently began experimenting with 3D printing homes in developing areas using local resources, with the resulting village cleverly called a “technological village”. If successful, this method of home building could disrupt the real estate construction industry.
The disruptive nature of 3D printing is not only impacting the way real estate is being built. It is also becoming as prevalent as its 2D counterpart, and has the potential to change the consumption habits of the average person. As a result, certain asset classes, such as industrial real estate and retail real estate, are likely to see significant changes in demand and necessity. At a speech to General Electric, global futurist Jack Uldrich raised an excellent question: “what does it mean for the global supply chain when, in the near future, instead of printing or producing and manufacturing very sophisticated objects over in Asia, putting them on ships and transporting them across oceans, we are going to be printing very sophisticated objects right in your backyards?”
The result will be that, with customizable goods available at relatively low cost, some consumer items will not need to be shipped or stored at all. For one, massive industrial facilities would not be as necessary, and container ports may not be as active. However, smaller- and medium-sized warehouses, particularly those near population centers, could benefit from these changes. These smaller industrial properties may take on a new role as quasi-manufacturing plants, as well as fulfillment and storage facilities, allowing consumers to pick up their orders.
Right now, 3D printing is expensive and still in its rudimentary stages. However, as we learned from the explosion in e-commerce over the past decade, a rapidly growing trend can quickly become a way of life. If 3D printing continues its swift rise to prominence, real estate will change, and well-positioned assets stand to benefit.