With industrial space scarce, retailers turn to on-demand warehouses

Short-term industrial leases provide retailers with flexibility to help fulfill holiday gift-buying, a new report says

TRD NATIONAL /
Dec.December 29, 2018 04:00 PM

(Credit: iStock)

With warehouse space at a premium, some retailers are now looking to short-term “on-demand warehousing” to help them find much-needed industrial real estate.

The rise in e-commerce has caused a dramatic surge in the demand for industrial real estate. But even as developers have flooded the market with new inventory, some retailers are still having trouble finding adequate, flexible space.

Now, companies like Flexe and Stord are stepping in to help retailers find industrial space to rent in the short-term, according to the Wall Street Journal. Short-term industrial leaseing, also known as on-demand warehousing, is especially helpful to retailers around the holidays, when e-commerce activity surges.

On-demand warehousing firms are popular with small retailers and online startups that don’t have existing distribution networks. But the services are now being used by companies like Walmart, which used Seattle-based Flexe to find 1.5 million square feet of warehouse space to help fulfill online orders around the holidays, according to the Journal. Ace Hardware also used Flexe to help it quickly restock stores damaged by hurricanes Harvey and Irma.

Short-term industrial leases allow retailers to remain flexible as they seek to cater to the changing demands of consumers.

Thanks to e-commerce and a strong economy, demand for warehouse space hit an 18-year-high in 2018, and Chicago has one of the hottest markets in the country. The local industrial market posted a second-quarter vacancy rate that is a 17-year low, and the trend does not appear to be waning.

Investors have remained bullish on the booming industrial sector, even as tariffs and rising interest rates have threatened to slow the market. [WSJ] — Joe Ward


Related Articles

arrow_forward_ios
PepsiCo CEO Ramon Laguarta and WeWork CEO Adam Neumann with the Old Post Office (Credit: Getty Images)

Space race: WeWork, PepsiCo may take a combined 320K sf at 601W Companies’ Old Post Office

Amazon CEO Jeff Bezos and Hillwood Investment Properties’ 3639 Howard Street in Skokie, Illinois (Credit: Getty Images and Hillwood Investment Properties)

Amazon, with an insatiable appetite for warehouse space, appears to make big play in Skokie

Chicago casino operator probably won’t make much money, Tishman Speyer poaches JLL broker: Daily digest

Logistics Property Company Executive Vice President Aaron Martell and a rendering of the project

From residential to industrial: Logistics Property nears deal with homeowners to make way for warehouse project

Colliers Chicago's Jim Carris and Alissa Adler

Colliers Chicago will fold Podolsky Circle into its CRE business

Homes in Chicago's Archer Heights neighborhood (Credit: iStock)

Chicago Cheat Sheet: Chicago home value growth hits 3-year low, another suburban corporate exodus…& more

The Jeffery Towers portfolio

As South Shore booms, local investor seeks a big payout on 4-building portfolio

Hilco Redevelopment Partners CEO Roberto Perez and a rendering of Exchange 55

Hilco secures financing for massive power plant redevelopment

arrow_forward_ios