Continuing on last year’s success, the industrial market is still facing ever-tightening space on the coasts and in city hubs all across the country. Mainly spurred by the logistical challenges created by e-commerce, the market continues to shrink. In response, there are businesses looking for industrial flex space right now to overcome the challenges of rising rents and low vacancy rates.

Why Is Flex Space So Attractive?

First, flex space is so attractive because it accounts for various kinds of industrial buildings that can be used for multiple purposes (warehouses, inventory with loading dock or gate, etc.). Flex industrial can be found in city limits though it is getting harder to come by. Then there are flex spaces being utilized out in the suburbs, replacing giant regional malls and shopping centers.

As the name implies, these spaces can be used flexibly for different purposes. For instance the move toward more on-demand deliveries by local retailers due to pressure from e-commerce is creating the need for local retailers to devise ways to better use their space. One way is by converting entire malls into food processing centers plus mega food malls with grocery stores as the anchors.

Lately, the smaller, lighter industrial spaces are being targeted for better flex space closer to city centers and better suited for mixed-use at a much lower cost than operating a city mall. Many industries are taking note and incorporating these underutilized industrial flex spaces – namely these 5:

5 Industries Most Interested in Industrial Flex Space Right Now

There are clear advantages in owning or leasing industrial flex space in today’s environment. From the tech startups taking over cities large and small to online retailers snapping up industrial space to utilize as warehouses and distribution centers, there are plenty of opportunities in these spaces for building owners and landlords in 5 particular industries.

#1: Retail/Logistics

Retailers building out their logistics network will need space that can be used as a storefront, a distribution center, and perhaps a small office. Flex industrial is the best space for these types of businesses. Mainly because they have the clearance for a proper inventory, often with warehouse space and roll-up doors which are crucial in a streamlined delivery operation.

By some estimates, e-commerce will continue to grow by nearly 25% year-over-year. That will lead to even more demand for flex industrial that can serve as both warehouse distribution and storefront.

#2: Office

The office market is another sector where flexibility will lead to increasing demand for flex industrial. Flex industrial is more customizable than larger industrial assets and smaller retail shop spaces. These types of layouts are proving to serve as modern office spaces with open floor plans and the steely designs that modern workers tend to favor.

#3: Tech

Tech companies in all sectors are popping up all the time. Often startups with little capital to begin with, flex industrial is less expensive to lease, own, and convert for multiple uses. It allows a new business to keep everything in house from inventory to front office space for far less than paying for a traditional office space or industrial.

#4: Real Estate

In real estate, agents, brokers, landlords, and building owners are recognizing the opportunities underlying this move to flex industrial. Since its appeal is broader than typical industrial, it will require better catered pitches that account for non-traditional tenants and buyers.

#5: General Services

One way agents are changing their strategy for marketing light industrial as flex industrial is to target local general services to fill out small industrial complexes and areas with similar businesses. For example a real estate business could occupy the same flex industrial space as an architecture firm, general contractor, and construction firm, saving all parties money and increasing opportunities for new business.

 


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