Height Demands for Warehouse Space At an Inventory Premium

It is a product that has become “high” in demand, as real estate investors seek industrial warehouse space to fulfil the demands of modern production and distribution. Sophisticated warehouse racking and retrieval systems makes use of higher warehouses, leading to a growth in their development since the 1970s. Today, the largest and highest paying customers of warehouse space are using these systems exclusively, presenting developers with a dilemma. However, height remains scattered throughout the market, and not all new warehouses are aloft.

Warehouses in The Market

With high-ceiling space 5.9 percent vacant, many of the market’s most preferred product types have been heavily depleted through 2016; high ceiling choices larger than 100,000 have dropped from seven to three since year-end 2015.

Q3’2016

Absorption was positive across both property types as distribution consolidation drove large positive numbers for warehouses. Martignetti Liquors moved into its newly constructed 640,000 sf facility in Taunton, consolidating from other regional locations. Massport announced it will begin an expansion of Boston’s Conley Terminal in a response to the Panama Canal expansion. Boston Flower Exchange announced it move into a facility in Chelsea in 2017, as their Boston site is slated for redevelopment. Gramercy Property Trust acquired the 450,000 sf Littleton Distribution Center in the largest purchase since 2014.

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