Making the Right Decision: Existing Warehouses vs. Build-to-Suit Solutions in Today’s Low-Vacancy Market

In a low-vacancy market, finding suitable warehouse space can be a challenging task. Businesses often face the dilemma of choosing between existing warehouses or opting for a build-to-suit solution that specifically caters to their needs. At Nationwide Industrial Real Estate, we understand the complexities involved in this decision-making process. In this blog post, we will explore the pros and cons of finding existing warehouses and using a build-to-suit solution within a low-vacancy market. We will also highlight why partnering with Tenant Representative Brokers at boutique firms like Nationwide Industrial Real Estate can aid businesses in making the right choice.

Existing Warehouses: Pros and Cons

Pros:

• Immediate Availability: Existing warehouses offer businesses the advantage of immediate occupancy, allowing them to start operations sooner.
• Cost Savings: Renting or leasing an existing warehouse can be a cost-effective solution, as it avoids the upfront expenses and time involved in constructing a new facility.
• Established Infrastructure: Existing warehouses often come equipped with essential infrastructure, such as loading docks, HVAC systems, security features, and employee facilities.

Cons:

• Limited Customization: Existing warehouses may not perfectly match a business’s specific requirements, leading to compromises on functionality, layout, or storage capacity.
• Potential Maintenance Issues: Older warehouse properties may require repairs or upgrades, requiring additional investment and maintenance costs.
• Limited Expansion Options: Existing warehouses may have limitations on expansion due to space constraints or zoning restrictions.

Build-to-Suit Solutions: Pros and Cons

Pros:

• Customization: Build-to-suit solutions provide businesses with the opportunity to design a warehouse that aligns precisely with their operational needs, layout preferences, and expansion plans.
• Efficiency and Productivity: A build-to-suit facility can optimize operational workflows, minimize transportation costs, and enhance employee productivity by incorporating the latest technology and design elements.
• Long-term Solution: Businesses seeking stability and long-term growth can benefit from a build-to-suit solution that caters to their current and future warehousing needs.

Cons:

• Time and Cost: Constructing a new warehouse involves time-consuming processes like land acquisition, architectural design, obtaining permits, and construction. This can result in longer lead times and higher upfront costs.
• Market Uncertainties: Market conditions may change during the construction phase, leading to uncertain costs and potential delays before the facility is operational.
• Limited Immediate Availability: Businesses requiring immediate occupancy may face challenges with build-to-suit solutions due to the time needed for planning and construction.