6 Typical Uses for Leasing a Warehouse

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What a time to invest in commercial real estate development, specifically leasing a warehouse. Today, the storage and commercial warehouse leasing industry is worth an estimated $26 billion in the United States and the average annual growth rate of the demand for storage space is just over 7%.

This type of development continues to increase, thanks in large part to speculative building. Approximately 62% of the 59 million square feet under construction by the end of the third quarter in 2013 was being constructed without signed tenants.

One of the primary reasons industrial warehouse space has exploded in recent years is because there are many different ways the space can be utilized, making it appealing to many different companies across a variety of industries. More potential customers is simply put better for business. Here are six common reasons for leasing a warehouse.

  1. Storage: Your classic, run-of-the-mill use for leasing a warehouse is for storage. Big corporations especially often have more stuff than they have room for at any given time and need large warehouses to store it in.
  2. Manufacturing: Manufacturing warehouse space is used for making, converting, or assembling commercial or industrial materials.
  3. Distribution: Distribution facilities are like holding stations between the producer, or manufacturer, and the end consumer/client. Goods come from manufacturing warehouses to distribution centers where they are then shipped out to individual stores/businesses/etc.
  4. Trucking: Similar to distribution centers, except actual storage typically does not happen here. Instead, their more like checkpoints where goods are simply transferred from one truck to another.
  5. Flex Facility: This type of warehouse space can be used for a variety of different reasons and even for multiple different businesses. Usually this kind of space is owned by one owner who leases it out to multiple tenants.
  6. Service Center/Showroom: Commonly associated with automobiles, this type of warehouse space can also be used for machinery and repair facilities.

There are of course virtually endless reasons for leasing a warehouse, but these are some of the more common.