The decision to lease, or buy the right warehouse space for your operation can be much more complex than just ceiling heights and dock doors. Often the process involves items that have little to do with the building itself. Most local municipalities and fire districts have the final say over who occupies a warehouse space and what is being stored in it or around it.
Would-be occupants of a warehouse need to assess their overall needs for both space and location. During this assessment some important details are sometimes overlooked:
- proximity and quick access to the building for key employees and target labor pool
- proximity to highway access (who’s paying the freight charges?)
- making sure there is ample room for maneuvering today’s commonly sized 53’ trailers
- onsite truck/trailer parking
- product/equipment outside storage
The decision-making process is just as tricky once you move inside. The type of lighting can be critical to an operation. Just a few years ago it was standard to use metal halide fixtures, and before that, 4’ or 8’ long florescent light bulbs and mercury vapor lighting. It’s not to say that these fixtures don’t work, but these were expensive to operate, and the bulbs have become increasingly difficult to obtain.
Today’s standard for high-bay warehouse (24’ or higher) is high intensity LED fixtures. They are extremely cost efficient to operate and there can be incentive programs from National Grid, NYSERDA and others that can drastically reduce the purchase expense of these types of fixtures.
In addition to your needs and the logistics of your operation, it is important to consider zoning laws and other regulations. Most townships have zoning laws against certain items being stored onsite or visible to the public. Neighboring businesses and adjacent owners can also affect your use of the building – make sure your broker knows your needs well and does their homework before you get too excited about a building.
Obtaining approval for the intended use of the warehouse can be lengthy and potentially costly. Local building departments will take a keen interest in how you plan on using the space, and what you plan on storing in the space. Your products may require that the building be sprinklered and monitored off-site for smoke and fire. Or they may require that individual racking levels have sprinkler runs in them or that the building needs an Early Suppression, Fast Response (ESFR) system. Finally, it is important to know that not all municipalities will have the necessary water flow to accommodate the ESFR requirement.
It is a common misconception that just because certain businesses are already located in an area you would like to occupy, your operation would automatically be approved. State and local building and use codes change frequently to keep up with the latest safety regulations. An existing business may be “grandfathered in” prior to these new codes taking effect.
The process of selecting an appropriate warehouse space for your needs is complex and highly variable depending on many factors. As such, choosing the right commercial real estate advisor can be the most important decision you make.
Your commercial real estate broker should not only know the market and available inventory but should also be able to demonstrate their knowledge of the approval process and the potential pitfalls that may disrupt the process of acquiring a suitable warehouse space for your needs. Making a well-informed decision on your representation will help you save time, money and aggravation in the end, even if the right choice appears to be more expensive on a cost per square foot basis.
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