The family owned gymnastics club initially rented space in a single story warehouse. The gymnastics business occupied one end of the large building and an archery retail store rented the other end. The gymnastics business owners also had another back bay that ran the width of the archery retail space. Sandwiched between the two was a computer repair store that occupied far less space than either of the two end tenants. In order, the tenants that occupied the most space ranked as follows: gymnastics, archery, computer store.
It came as no surprise that when there was word the computer store owners were preparing to retire the other two tenants began to make plans for taking over that soon to be available space. Clever collaboration between the owner of the building and the two larger tenants helped the group come up with a perfect solution. The gymnastics coaches moved out of the back bay, allowing the archery company to expand. They increased their retail area and also created a shooting range in the high ceiling back area. The gymnastics space expanded into the empty computer space.
This switch was an advantage to both companies. the archery store nearly doubled in space. The gymnastics space became about 30% bigger, but more importantly, it was all consolidated into the same end.
Commercial Real Estate Development Is a Fast Changing Market
Renting commercial real estate can be tricky. You do not ever want to pay for more than you need, but you do not ever want to be scrambling to find extra at the last minute either. You do not want to have a large amount of unused space for large time periods, but you do not want to be shuttling back and forth between two different warehouse locations if you had to purchase your space at two different time. The secret, of course, is in accurately determining warehouse space needs in advance.
Somewhat similar to renting commercial real estate and warehouse needs is the decisions that are needed when leasing office space and leasing retail space. The bottom line is no one wants to put out the extra lease or rental money for unused space.
Luckily, ware house and commercial real estate owners are accustomed to being both creative and flexible with renting commercial real estate. Often offering leases that last anywhere from six months to several years. some of the larger real estate owners often own many properties so it is easier to find the best space for the best tenant.
The U.S. Warehouse and Leasing Industry Is a $26 Million Business
Warehouse space can be used for many different purposes. Most often, however, people think of storage and loading and shipping when they think of warehouses. Because of the high demand for this type of versatile space, nearly four billion square feet of warehouse space was built between the years 1990 and 2003. While much is used for more typical ventures, other creative uses also occur.
The latest trend of high intensity fitness training, for example, is perfectly suited for unfinished warehouse space. The cement floor are easy to keep clean and can be covered with workout mats. The open and lofted ceilings provide plenty of support for weighted bands and climbing ropes. The cinder block walls provide a blank palette for mounting pegged climbing walls.
Other sports make use of unfinished warehouse space as well. Indoor volleyball courts and soccer fields provide year round high school athletes a place to train and compete during the coldest months. Pitching, hitting, and strength training centers for baseball and softball athletes also make use of these spaces.
In addition to these athletic pursuits, predictions indicate that retailers who run their businesses both online and offline will need more space in the future. In fact, a combined 25 million square meters in additional space may be needed over the next five years to store and handle the items these retailers sell. Self storage units rented to customers is also using an increasing amount of warehouse space.
This anticipated increase is both an asset and a challenge to companies who might be renting commercial real estate in the near future. Increased space means that customers may have a greater choice. There may, however, be increased competition for that space.