Despite the 9.1 billion square feet of warehousing inventory sprawled across the country, many American companies find that existing commercial infrastructure just doesn’t meet their needs.
The average age of warehouses in the U.S. is 34 years, and more than 30 percent of these buildings are 50 years old or more, according to a study conducted by CBRE. Nearly all existing warehouse space is more than a decade old, and isn’t suitable for e-commerce distribution.
Warehouses that were built prior to 2008 typically have low ceilings and poorly maintained, uneven floors. Additionally, they often aren’t large enough to support enough inventory or equipment, and don’t have enough loading docks to meet distribution needs, CBRE pointed out.
New construction eases tight supply
In many cases, it’s a tough sell to renovate existing spaces to meet the requirements of today’s warehouses and distribution centers. Increasing the height of a building with a low ceiling isn’t easy, and warehouses would typically need to expand their footprint as well.
Additionally, many older warehouses aren’t in the most advantageous locations for modern e-commerce operations. Distribution centers for online retailers should be as close to urban populations as possible to facilitate same-day or next-day deliveries. But, in decades past, it was most beneficial to build warehouse space in lots that were well out of the way.
Recent years have brought forward an influx of commercial real estate construction to meet demand, but just 11 percent of square footage and 4 percent of buildings were completed in the past decade, according to CBRE. Areas that have the youngest stock of warehouse space, on average, include California’s Inland Empire (20 years old), Las Vegas, Nevada (23 years old) and Phoenix, Arizona (26 years old).
Retrofitting existing warehouses
While new construction can create spaces that are specifically tailored for a particular business’s needs, renovating older warehouses also has its own advantages.
Consider New Jersey, where warehouses are plentiful: 5,208 buildings for a total of 350.5 million square feet. But with an average age of 57 years, these buildings are among the oldest in the country. At the same time, New Jersey is ideal for the e-commerce retailer that wants to reach a lot of consumers quickly. The state is within a day’s drive of about 40 percent of the U.S. population, NJ.com reported.
To reconcile growing demand with insufficient space, some companies have begun investing in renovations and retrofits.
“Up north, there’s nowhere to build those kinds of warehouses,” said Matt Dolly, director of research in New Jersey for Transwestern, in an interview with NJBIZ. “So they try to redevelop some of the older ones to attract to some of the New York tenants.”
New Jersey is an important distribution hub, but the state’s aging warehouse space doesn’t meet the needs of today’s retailers.Renovating warehouses and distribution centers, installing new equipment and opening up cramped quarters can make these buildings more useful for today’s businesses. Miner’s team of professionals can help companies identify the assets that would best serve their operations, as well as facilitate acquisition and installation.
Maximize available space
For companies outgrowing their warehouses or considering a move to a smaller space with desirable qualities, making the most of what’s available is critical. Adopting space-saving storage solutions like an Automatic Storage/Automatic Retrieval can keep everything organized and densely packed. Plus, these systems make finding the right product at the right time much simpler. Miner can assist businesses with limited floor space challenges. Our technicians know everything there is to know about AS/AR systems as well as modular cabinets, custom storage designs and more.
As the retail landscape evolves, companies need to keep up with the changes in order to succeed. With Miner’s help, these businesses can identify ways to improve and ensure their buildings and equipment are maintained well.