ReadySpaces has had a pretty great pandemic.
The eight-year-old startup that pairs small businesses with warehouse storage has nearly doubled its footprint in the last year and a half, adding 11 warehouses.
“Our growth really turbocharged,” said co-founder Kevin Petrovic.
“I think that’s being rather modest,” countered Jon Zimmerman, the startup’s other co-founder. “To meet the waiting list that we have, we could almost double the size of every current location. It is extraordinary.”
Zimmerman attributes that growth to two Covid-era trends: a continued rise of e-commerce that has fueled demand for industrial property across the country, and the “Great Resignation.”
ReadySpaces provides small-scale storage — 250-5,000 square feet, or spaces that range from a one-car garage to a basketball court — to startups that need flexibility. Rather than a multi-year lease that requires a credit check and a hefty security deposit, ReadySpaces waives credit requirements and offers entrepreneurs the option to grow their space with their business.
When Covid shuttered storefronts, even the most resistant retailers transitioned their operations online, giving rise to a “whole tranche of people who had never had warehouse space,” said Petrovic.
The so-called Great Resignation that has seen record numbers of workers quit their jobs provided ReadySpaces with an additional cohort of potential clients. Some 4.3 million Americans resigned in August, the highest in a single month since 2000, with retail and restaurant workers leading the charge, according to data from the U.S. Department of Labor.
One-third of those workers quit to start small businesses, a July survey of 1,250 adults by Digital.com indicated. And Census data shows that applications for small businesses jumped by nearly a quarter in 2020 to 4.3 million, the highest in a decade. Applications are expected to track even higher in 2021, the New York Times reported.
Zimmerman believes it is this new crop of entrepreneurs that is driving persistent demand for warehouse storage.
“I think a lot of people in retail, offices, restaurants saw the writing on the wall and now want to be a part of this supply chain business that we’re clearly moving into,” Zimmerman said. “We are certainly riding that wave.”
The firm, which said it is turning a profit but declined to share details, recently secured $16.2 million from a “variety of small investors.” The cash will fuel ReadySpaces’ growth in its current markets, Houston and San Francisco, and fund its expansion into new cities: namely, New York.
Petrovic said the startup isn’t worried about competing with big-box retailers and investors seeking king-sized logistics facilities. Amazon, for example, needs modern buildings with considerable square footage; ReadySpaces seeks out smaller, older structures. One building, for example, had four previous lives: as a tank manufacturer during World War two, a Kellogg’s plant, a tire distributor and a steel fabrication center.
”We like troubled buildings,” said Zimmerman. “Amazon, thankfully, does not.”
Because the firm targets aging properties close to city centers, the bigger competitive threat is redevelopment, he said.
Looking to the New York market, the startup plans to expand on a single space in northern New Jersey by adding more locations in the Garden State, as well as in New York City and on Long Island.
“We’ve seen tremendous demand in the area,” said Petrovic. “So, honestly, I wish we had five locations there, not one.”
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