Sunday, January 13th, 2019 January13th2019

Sell for More Trivia: What is on-demand warehousing?

Published on January 13th, 2019

Sell for More Trivia is a weekly blog series that playfully presents a trivia question about commercial real estate.

 

Known as on-demand warehousing, the idea is to tap into unused warehouse space…particularly in distribution centers near population centers.

Retailers and manufacturers are trying to position goods closer to customers without getting locked into multi-year leases when rapid changes in buying patterns and trade conditions have made forecasting demand more difficult.

For example, this holiday season Walmart used Flexe to secure about 1.5 million square feet of temporary space to handle the mounting demands of e-commerce fulfillment. Flexe is a marketplace that connects warehouse operators with businesses in need of storage.  The warehouse operators that Walmart found through the platform handle hiring and other administrative tasks for the pop-up spots, spread out across three facilities in three states.  Walmart also avoids paying year-round for space it would only use during peak season.

Flexible warehousing startups often pitch their services as a way for midsize retailers and online startups to compete with Amazon without having to build their own distribution networks. But larger companies are taking an interest, including those with established logistics operations.  The interest comes as growing e-commerce sales sharpen competition for warehouse space and push up prices.

Retailers and manufacturers are using these pay-as-you go arrangements to cope with everything from hurricanes to global trade tensions.  Stord, a startup with a network of more than 250 warehouses across the U.S., helped a Chinese solar-panel supplier temporarily expand its New Jersey storage capacity by fivefold earlier this year when the Trump administration imposed stiff levies on foreign-made solar panels.

Keep in mind, facilities known as “public warehouses” have offered space on a short-term basis for years.  But many of the new on-demand platforms offer a high-tech twist, incorporating software that simplifies the cumbersome process of integrating the customer’s order management technology with the provider’s systems.

Look for the overall market for public storage and on-demand warehousing to hit all-time highs in the coming years.

 


How much is your property worth?  Find out now…plus get the step-by-step blueprint to sell your property for the absolute highest price the market will pay, free (click here)


Get an unfair advantage.  Get exclusive weekly benefits by joining Sell for More Club (join now)


Pop the champagne.  Our clients celebrate when their sale closes…and we supply the champagne.  Click here to schedule a no pressure call to get started.


About Beau Beach, CCIM

Beau is a tenacious Commercial Real Estate Broker, author and adoring father of four. His clients appreciate his no-nonsense demeanor and his legendary work ethic.

Beau leads Prowess IRES which is a commercial real estate broker for sellers in the Nashville, Milwaukee, South Florida and Chicago markets.

He’s the author of the books The 3 Reasons: Why Most Commercial Properties Don’t Sell and True Wealth: What Every Seller Should Know About 1031 Exchanges.

Beau can be reached at 414.324.4938, 615.603.9770, click to schedule a call or Beau@ProwessIRES.com