Tenants Are Starving For Shallow-Bay Warehouses. That`s Too Bad

Massive warehouses were all the rage when Eastern Pennsylvania bulked up to accommodate the pandemic e-commerce boom.

As demand for those behemoths has cooled off, a different industrial sector has taken its place on tenants’ wishlists.

Businesses across the region are clamoring for shallow-bay warehouses and other small industrial buildings, but elevated construction, land and entitlement costs mean new builds aren’t penciling, even in the face of soaring rents.

“There’s definitely an opportunity there for real estate developers to satisfy the demand that exists for small bay,” KBC Advisors broker Brian McCurdy said. “We know that tenants are looking for it.”

They aren’t having an easy time finding it...   ...more

RSK: Yes, there is a huge demand for small bay warehousing, but little is available. With construction costs so high, the rents developers would have to charge would not be sustainable for tenants. Maybe the answer is converting some of the larger spaces to smaller bays.