The great American warehouse building boom is over.
According to WSJ’s Konrad Putzier, “Higher interest rates are choking off construction of industrial facilities, putting an end to the construction frenzy that has remade the landscape across vast swaths of the country.”
A slowdown in warehouse construction is causing the market to absorb existing space, making space even more challenging to find in 2024. Higher interest rates are causing the construction of warehouses to slow down. Per the WSJ, “industrial property construction starts fell 48% in the first three quarters of the year compared to 2022.” Others report 25% fewer new warehouses built in North America and Europe in 2023.
Costar estimates that 450 M sq. ft. of warehouse space is under construction in the US, but fewer new tenants occupy this space. Most of these warehouses are in the 500K to 1M+ square feet range, making it difficult for smaller companies to occupy the space.
With less warehouse space available, what can a shipper do when they need extra space due to a spike in demand, company growth, acquisition/merger, seasonal inventory overflow, supply chain disruptions, or just plain old expansion? What if your current warehouse suddenly reaches capacity? What if you must suddenly stockpile supplies because of a reduced number of exports? What if you have a large order cancel?
The National Retail Foundation reported that order returns totaled $743B in 2023, which is 14.5% of sales. What if you have a large volume of returns after the holidays? Where will you place your inventory?
What if you could work with an experienced team that understands your needs and knows what is available in the industry?
Nexterus partners with Warehowz, an on-demand tool that facilitates finding available warehouse space. Warehowz contracts with a network of 2,600 fully-vetted warehouses across the country. Nexterus can help its shipper clients find excess warehouse space for short-term rentals.
As consumers demand quick shipments, retailers and other shippers must find warehouse space closer to the end customer, reducing shipping times and costs. Many shippers want flexible warehouse space options that don’t include long-term, fixed-cost contracts; often, short-term rentals will help improve fulfillment operations and better manage inventory.
The Warehowz tool features map-based screens for visually locating facilities, giving shippers a holistic look at their distribution networks. With Nexterus, the Warehowz tool has been a real game-changer, saving valuable time and resources to find the best warehouse at the right location for the right price. Nexterus can find you any warehouse location from coast to coast.
Contact Nexterus today for all your warehousing needs.