The inventory of small warehouses isn’t meeting demand

A growing number of businesses are struggling to find smaller warehouse spaces, even though the pandemic-era uptick in warehouse demand has cooled. According to real-estate services firm Cushman & Wakefield, the vacancy rate for U.S. warehouses under 100,000 square feet was 3.9% in the fourth quarter, much lower than the 6.7% overall vacancy rate.

This is partly because in the past five years, developers have focused on constructing buildings larger than 100,000 square feet to accommodate growing e-commerce operations, and small warehouses are often in urban and suburban areas where space is tight and land is expensive.

“Marketplace” host Kai Ryssdal spoke to Liz Young at The Wall Street Journal about how businesses are having trouble finding small warehouses to lease. Below is an edited transcript of their conversation.   ...more

RSK: Reason? Simple supply and demand. Most new construction has been in the larger buildings and spaces. Plus many companies have scaled back on leases for large spaces and what the versatility of growing or scaling back and small spaces allow for this.