{"id":1004670404,"date":"2023-07-12T00:02:02","date_gmt":"2023-07-12T08:02:02","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004670404"},"modified":"2023-10-07T00:30:20","modified_gmt":"2023-10-07T08:30:20","slug":"the-rise-of-co-warehousing-whats-the-appeal","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/the-rise-of-co-warehousing-whats-the-appeal\/","title":{"rendered":"The Rise of Co-Warehousing: What’s the Appeal?"},"content":{"rendered":"

Co-warehousing\u2014or flexible warehousing\u2014has risen as a practical solution for industrial users<\/a> of all sizes, particularly for smaller ones. It serves as a way to both cut costs and provide answers to smaller companies that don\u2019t have the resources to access Class A inventory in today\u2019s highly competitive industrial market.<\/p>\n\n\n

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READ THE DIGEST VERSION<\/a><\/div>\n<\/div>\n\n\n

Demand for flexible space has always been there to some degree, Matt Wirth, senior managing director at JLL<\/strong>, told Commercial Property Executive. <\/em>However, there\u2019s never been a product type that satisfies the specific needs of users who want smaller spaces or facilities that could easily accommodate growth. The rise of e-commerce in the past couple of decades spurred expansions for small businesses, quickly accelerating demand for flexible industrial facilities.<\/p>\n

Companies such as Saltbox<\/strong>\u2014which provides flexible warehousing spaces\u2014or Flexe<\/strong>\u2014an omnichannel logistics provider\u2014built their business models on supporting these needs, albeit in entirely different ways. Others have leveraged their existing structures to capitalize on this new trend. A year ago, Capstone Equities launched Portal Warehousing\u2014a logistics platform for small e-commerce businesses<\/a>, with a first location in Salt Lake City.<\/p>\n

How can flexible warehousing help businesses thrive?<\/h2>\n
\"Maxwell<\/a>

Maxwell Bonnie, Co-Founder, Saltbox. Image courtesy of Saltbox<\/em><\/p><\/div>\n

There are 33.2 million small businesses in the country, the latest data from the U.S. Chamber of Commerce shows. In e-commerce, nearly 95 percent of direct-to-consumer companies have a revenue of less than $5 million, according to Saltbox Co-Founder Maxwell Bonnie.<\/p>\n

“At that scale, the operations become an opportunity cost to growth, resulting in companies stalling out at that size,” Bonnie said. “We aim to reduce that opportunity cost by making scaled up logistics infrastructure available earlier in a company\u2019s growth.”<\/p>\n

Co-warehousing gives small businesses a feeling of control over their fixed costs, providing them with the possibility to downsize or upsize based on their needs. Furthermore, they can do that while enjoying all the amenities that come with a modern co-warehousing facility. The intrinsic dynamic positioning of flexible warehouses allows users to take advantage of all the qualities the industrial sector benefits from, while also providing amenities that are usually found in office or retail spaces, according to Gridline Properties<\/strong> Partner & Senior Associate Mateo Romero.<\/p>\n

“For example, a user could be a design firm that could use the space as an office and production area with a 3D printer, or a furniture company that has offices and a showroom area for its products,” Romero suggested.<\/p>\n

Additionally, the flexible model can make supply chains more efficient for small businesses, which often do not have the resources or expertise to manage logistics without help, Wirth believes. These spaces can also create an incubator-type environment\u2014similar to flexible office<\/a>\u2014which allows for collaboration and accelerates innovation, noted Wirth. <\/p>\n\n\n