What to Consider in a Warehouse Beyond Cost Per Square Foot0

Posted by Thomas Miller, CCIM

miller-industria-properties-warehouse-classificationsThe process of leasing or buying a warehouse property here in northern Nevada or anywhere is inherently complex. Unfortunately, far too many people set their sights on a single piece of the puzzle – the cost per square foot. It’s important, yes, but focusing solely on that figure often means that other equally important factors are overlooked. Here’s what to consider in a warehouse beyond cost per square foot.

Technology

Technology in a warehouse is an immediate asset, allowing for logistical efficiency and flexibility as your business evolves. Technology can be found in number of upgrades that elevate a property well beyond those with standard features. It’s something that savvy consumers are seeking, and developers are responding. One of the worst things that could happen to a warehouse is the threat or likelihood that it might become obsolete within a few years of construction. Avoiding this by including the kinds of upgrades that make a property incredible flexible is becoming more and more commonplace.

Upgrades that are necessary in order to stay competitive in the market include, but aren’t limited to:

 

  • A generous number of oversized truck docks
  • Oversized trailer and chassis storage courts
  • Crossdocking
  • Eave heights reaching 40’
  • The most bandwidth
  • The highest fire sprinkler ratings

LEED Certification

Today, developers are reaching LEED silver status certification fairly regularly, with gold certification less routinely. While there are a number of shortcomings to LEED certification, it has nonetheless helped produce some of the most energy efficient warehouses available for public use. LEED status also brings a large tax savings, as well as lower NNN fees to the tenant, which lowers fixed operating costs. Many of the upgrades in today’s warehouses, including new lighting technologies like LEDs, high-efficiency heating systems, improved wall insulation, etc., also mean significantly lower operating costs.

The Most Important Questions

The majority of the people hunting for warehouses don’t think to ask about upgrades and how they might affect a building’s flexibility, nor dow they inquire about LEED certification – or even a building’s age. And yet, along with pricing and terms, these are truly the most important questions a potential buyer or tenant could ask.

It’s fair to assume that this oversight is because people tend to think in terms of their immediate needs. But a little bit of thought given to what your business not only needs now, but what it might realistically need in the future, will only benefit you. Here’s the bottom line – the best decision isn’t made solely based on price per square foot. Ask specifically about a pricing upgrade into Class A spaces with their flexibility and LEED statuses. Then you’ll be in a much better position to truly understand what you’re getting for the money.

Our posts are intended to educate commercial real estate users so they can make better decisions in their real estate use, investments, buying and selling. We encourage your input and commentary. If you are enjoying these posts and finding them useful, help spread the word via Facebook, Twitter, LinkedIn, Google + or email with the buttons above.

About the Author

Thomas Miller, CCIM

Thomas Miller, CCIM is the president and broker of Miller Industrial Properties in Reno, Nevada. He has worked in industrial real estate since 1991, with 15 years of previous experience designing and building industrial warehousing and manufacturing facilities in the northern Nevada market. Contact Tom at tom@mipnv.com or 775-742-9891.

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