Warehouses Go Vertical: 5 Reasons This Makes Sense

Typically, warehouses are expansive one level buildings surrounded by other warehouses, however, things are starting to change when it comes to warehouses. With different factors having an impact on the logistics industry, one interesting thing to look at from a commercial real estate perspective is the warehouses that are going vertical. In the current environment of constant change, this makes sense and here are some reasons why.

1. Closer to Consumers

Typically, many warehouse farms are in remote areas that are not close to large residential areas but the idea of this is starting to change. As ecommerce continues to grow, the race to get the product to the consumer faster than ever is on. One way to do this is to get the product closer to the customer before they order it resulting in less transit time. By moving into closer areas, it may mean a limited amount of area to use so going up would be the way to achieve more space with a smaller footprint.

2. Cost of Land

Moving closer to consumers means obtaining land that may be higher in demand for other uses as well as warehousing. With higher demand comes higher price. Being able to go vertical with warehousing means that you can get more for your money by buying a smaller footprint and building up instead of building a larger plot of land for a bigger single story building.

3. Environmental Benefits

Utilizing less land means that more open space can be preserved and utilized for a different more environmentally friendly purpose. In addition to saving open space, utilizing vertical warehouses to get closer to consumers means that the transportation distances will be shorter. With shorter transportation times, there would be less fuel burned by the trucks as well as less carbon being burned into the atmosphere.

4. Automation

Warehousing has changed over the years with many manual processes becoming automated using various systems and technologies that allows product to be touched less by workers and travel further on its own throughout the warehouse. As automation continues to grow the idea of getting product from one level to another level within a vertical multi-story building will become less complicated. One example, is where Amazon will be using Kiva robots to move its product to the processing area which will be on the first floor of one of its warehouses in the United Kingdom.

5. Overcrowded Areas

One of the biggest reasons to go vertical is for the same reason that residential buildings went vertical, the area is overcrowded and there is still demand to be in the area. In some locations, like Asians markets, there is not much choice but to go vertical if you desire to be in that location. Being closer to the consumer means heading into these overcrowded areas and going up may be the only solution to get the amount of space needed.


Written by Nicole Epps Brzyski for Coldwell Banker Commercial Affiliates

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