Amp, Amp and Away: JP Morgan Asset Management Leans Into High-Powered Industrial

In the 1986 movie “Short Circuit,” a military robot named Johnny 5 is struck by lightning and suddenly programmed with human-like artificial intelligence. The movie’s genre was labeled science fiction at the time, but, now, almost 40 years later, it’s becoming something of a reality.

Robots are acting a lot like humans — in and out of the workplace.

Pondering the proliferation of robots in the workforce in a January 2024 newsletter, Bill Gates said he understood the creeping fear that robots are coming for all of our jobs, but also made a key distinction: “Given present labor shortages in our economy and the dangerous or unrewarding nature of certain professions, I believe it’s less likely that robots replace us in jobs we love and more likely that they’ll do work people don’t want to be doing.”

That postulation is part of a larger thesis that’s currently being proven — leaned into, even — by J.P. Morgan Asset Management (JPMAM) through its advanced manufacturing investment strategy.

Advanced manufacturing essentially involves the leveling up of industrial facilities through innovation and cutting-edge technologies like AI and robotics. A human being will often check robots’ work, or there may be a collaborative human-robot approach via “cobots,” with efficiency always the end goal.

More broadly, advanced manufacturing represents the next iteration of industrial investment, an attractive, fast-moving subsector not defined by square footage or ceiling clearance, but by power capacity, or amperage (amps) — critical to support the use of robotics and AI-powered technological efficiencies at these facilities.

And, although once a futuristic-seeming trend, increased reliance on robots and AI in the workplace now has a home smack dab in the middle of 2025, and tech-enabled manufacturing is attracting plenty of private investment dollars for a few cumulative reasons.

First, the Trump administration is pushing for the reshoring and expansion of domestic manufacturing through the enforcement of steep tariffs on global imports. Secondly, fiscal stimulus measures such as the CHIPS Act, enacted in 2022 to bolster the U.S. semiconductor industry, have provided funding, incentives and tax credits for the domestic research, development and manufacturing of chips, as well as the bolstering of supply chains. Thirdly, while there’s increased demand for an expanded manufacturing workforce today, humans have less interest in doing those jobs than they did previously.

In fact, manufacturing labor shortages are often a key factor in holding companies’ productivity levels back, and a July 2025 McKinsey & Company report stated that, when it comes to advanced industrial manufacturing, the skilled workforce of welders, electricians and machinists is largely retiring, meaning “manufacturers are struggling to increase productivity, a challenge driven in large part by a younger, less experienced labor force.”

The report gave the example of an aerospace and defense manufacturer who wanted to relaunch a product line of legacy weapon systems. But, as it didn’t have the talent base to make those products, the company had to reach out to rehire retired employees.

“Advanced industrial manufacturers, who frequently build complex products with long cycle times, often forecast labor demand years before a bid is won and base it on assumptions of labor proficiency, which is now being fundamentally uprooted by the realities of labor supply,” the report read. 

For savvy commercial real estate investors like Chad Tredway, the global head of real estate for JPMAM, a clear trend has emerged.

The origin story of Tredway’s team’s focus on the advanced manufacturing space was twofold. Anecdotally, he had heard of the difficulties companies were facing in trying to hire manufacturing talent, even at the most junior level. Then, on a trip one day to an advanced manufacturing industrial building in Southern California, owned by institutional investors advised by JPMAM, Tredway got a chance to see robotics at work with his own eyes.

“I connected the dots and started to think through how the world was changing, and where it’s going,” Tredway said. “Most companies that are in manufacturing today are seeing increased demand. The natural next question is, ‘Well, how the heck do we keep up with the demand?’ given the tax incentives, the administration’s focus on it and the need to have supply chains that are also quick to reach customers. I haven’t talked to a single person in manufacturing who isn’t talking about increasing efficiency — and using robotics — at their facilities.”

With those efficiencies tied to a location’s amperage, and higher-powered industrial sites (over 4,000 amps) now commanding a pricing premium over others, now is the time to contemplate the future, Tredway said: “There’s pent-up demand in the system, and it’s growing at such a rapid pace that if real estate owners don’t start thinking about this, they’re going to be left behind.”

Putting your CHIPS on the table

When China entered the World Trade Organization in December 2001, it was able to manufacture and produce goods much more cheaply than the U.S., kick-starting a wave of outsourcing. In the past couple of years, there’s been a push, and incentives, for goods to be made in the U.S. instead— and the Trump administration is only doubling down on it.

The CHIPS Act was a big “Aha!” moment for Tredway’s team — one that’s only continued to expand since its enactment.

“Five states were the biggest beneficiaries of the CHIPS Act — California, Arizona, New York and Pennsylvania and Texas — and what we saw was not only the government spending going there, but the knock-on effect was that private investment also went there,” Tredway said. “The dollars were going there because they’re critical industries that the government was focused on: big pharma, defense, rare metals, chips and technology. And that got us thinking about power generation and robotics.”

In 2018, Amazon had around 10,000 robots. Today, that number is more than 1 million. A June Wall Street Journal article stated that Amazon will soon have as many robots as humans in their warehouses, with the addition of the robots not meant to replace humans but to increase efficiency alongside them.

More robotics means a need for additional power — a trend that’s being seen more broadly across the industrial sector. According to J.P. Morgan data, while there’s convergence between industrial and data centers’ sales prices per square foot, high-powered industrial assets are commanding a pricing premium of around 15 percent, and that premium is only increasing.

“It’s a theme we see with the manufacturing facilities that are in the highest demand,” Tredway said. “If you drive past an industrial site, you’re going to see EV charging for the forklifts or the vans that are delivering goods, and they also require more power. So, in general, we’re finding this investment theme around power, and power to industrial sites. It’s going to be a huge theme, but no one’s really talking about it yet.”

So what do these robots that nobody’s talking about look like? For some, this reporter included, the vision in mind may be the aforementioned Johnny 5: a talking, feeling, sassy, smart readaholic on wheels that’s capable of giving John Travolta a run for his money on the dance floor.

Not quite (unfortunately).

“Thirty years ago, you’d see people making parts, assembling parts and then putting parts on a conveyor belt,” Tredway said. “Now, when you go into that same manufacturing facility, you see one-third the number of people, but you see large robots doing the work and one person inspecting what’s made and putting it in a box. In some industrial facilities, instead of a forklift driver, you have a robot that’s going to pick up a pallet and take the pallet to the location it needs to be. The robot picks up the goods that it needs to ship, it puts it on the conveyor belt, and it goes into a box.”

In addition to fulfilling Amazon orders, these hardworking — yet tireless — robots are busy across the aerospace, defense and automotive industries, among others, often helping to fill labor supply deficits.

“You just don’t have the same number of people going into manufacturing, and yet your operation has to become more efficient. It has to be more computerized, and so you need more power to accomplish that,” Tredway said.

I got the power

With evolution comes change and — as much as commercial real estate loves to rise to the occasion — the trend of converting office buildings to residential properties has shown the industry that not every building is a fit for said change. Retrofitting an existing industrial building to allow for higher amperage, advanced automation and robotics is no different.

“I was walking a 4000-amp site with my team, and I said, ‘If you need 4000 amps to run this site efficiently with all these robots and machines and AI, what would it cost to retrofit a site like this?’” Tredway said. “What blew my mind is the development team said it would cost 20 times more to convert a site to a higher amperage, and you could easily have a problem with the power grid because it can’t supply that many amps to a site.”

Locations with solid power grids that are also receiving federal stimulus are therefore the boxes JPMAM is looking to check when adding to its portfolio. Specifically, the firm is focused on new developments in higher amperage spots versus trying to retrofit today.

“We’re fortunate in that we have a number of partners and know some of the best developers in Texas and in Arizona and in California that we’ve worked with for years,” Tredway said. “We’ve built a network of people in these states that we’ve worked with for years that have been doing business with us before the CHIPS Act was a thing, in order to meet the demand of technology companies. But, we’ve begun to focus on it more as it relates to our investment process, adding this lens of amperage on top of industrial locations as we continue to build our portfolio.”

As for investor feedback on the focus on power?

“I was in an investor meeting yesterday, and we were all sitting around the table talking about key themes,” Tredway said. “I asked them what they had been hearing about, and they said data centers. We said, ‘Look, we get [why you’re hearing about] data centers, but there’s now no premium in cap rate between data centers and traditional industrial.’”

Tredway’s team went on to discuss amperage and the need for power at industrial locations today, along with  the fact that manufacturing demand is up 350 percent over the last five or six years, outpacing the supply of these assets. That’s why high amperage is an indicator of where JPMAM wants to invest. Tredway’s team also walked the investors through how the Department of Defense and Amazon are currently using advanced manufacturing.

“They were really quiet for a second, and then one guy leaned in and said, ‘Oh my god, is this . . . the new data center?!’” Tredway said. “While people haven’t necessarily heard about it, the dots connect quickly. Most people get that the U.S. is trying to increase domestic manufacturing, and the administration is focused on pharma, rare earths and things that are important to national defense being made here. I think people understand tariffs are going to create more demand here. I think people get that there’s more manufacturing demand and there’s less talent. But I don’t think anyone connected the dots that the locations that people are building in have got to be equipped for the future — because that’s where we’re seeing the most rent growth and the most premium.”

As for limiting factors? The obvious one is meeting the power supply required to run these facilities.

“Similar to data centers, power is really central to this,” Tredway said. “The second limiting factor is finding developers that can actually develop these facilities to spec.” 

Indeed, advanced manufacturing industrial buildings often have multiple levels fitted out with computers and robots and technology. The layout of the facility is critical to the movement of goods — and the robots — within it. So, between having the required power and the ability to develop one of these properties on spec, the sector has some barriers to entry.

Still, JPMAM is ahead of the curve while following the dollars. Tredway described  the increased pace of private investment as a result of the CHIPS Act as “mindblowing.” He cited the Taiwan Semiconductor Manufacturing Company’s Phoenix project, where 3,000 people are working on the most advanced semiconductor manufacturing in the U.S. 

“Watching the flows of capital around it to support it has been pretty eye opening for us,” Tredway said. “It’s benefited our net lease platform too, by the way, because you have all these private companies that now need space and they want a capital-efficient way to grow, and so we’re able to do a sale-leaseback.”

While some may be learning about advanced manufacturing for the first time, Tredway says JPMAM doesn’t have the monopoly on great ideas. “I wish we did,” he said and laughed. “There are definitely other players that are focused on this, but I think we probably have a very unique mix of expertise through our footprint in key markets, and our own development team in-house looking at things like amperes. Because, frankly, if you ask a pure play real estate owner about amperage, they may not know.”

As such, advanced manufacturing is an investment theme that JPMAM will continue to lean into.

“This theme is going to grow in our portfolio,” Tredway said. “It’s not a dominant part of our portfolio today, but we see it being more dominant as we continue to see opportunities here. Our team is actively looking in the market now, just given our network of 100-plus partners, at sites where we would have power, and where we see CHIPS dollars, and where we see private investment. I think that’s a great way to think about our investment thesis today, and where the market’s going. This is the type of real estate that when you look back five years from today, you’re going to wish you bought now — and that’s why we’re looking at this as an important part of our portfolio.”

Cathy Cunningham can be reached at ccunningham@commercialobserver.com.