Industrial Space Basics for Commercial Tenants

May 25, 2023 Don Catalano Don Catalano

Choosing the right industrial space is crucial for the success of commercial tenants. This is especially true right now as warehouse space is currently the most competitive leg of the commercial real estate sectors. Because of this reinvigorated interest, landlords will want to drive harder deals. But don’t let this scare you… The best thing corporate tenants can do is became clear in their basic needs and stick to them during them during the searching and negotiation process. Not only will this direct you to the properties that suit your needs and don’t waste your time, but it will ensure you get the best price.


In this article, we'll delve into the fundamentals of industrial space for commercial tenants, providing essential insights and considerations to help businesses make informed decisions. Understanding the basics gives businesses a platform to find suitable space that aligns with their operational needs, promotes efficiency, and supports future growth. So, let's explore the key factors to consider when selecting industrial space. 


But, note that this is a discussion of the basics. If you want to learn as much as possible about how to find the perfect warehouse for you business check out the free course and receive a 70+ point comprehensive checklist to further ease your search. 


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Space Requirements

Assess your specific needs in terms of square footage, ceiling height, floor load capacity, and layout configuration.


This should include allotting space for flexibility and scalability of the industrial space to accommodate future growth or changes in your business needs. Having the ability to expand or modify the space can save you the hassle of relocating as your operations evolve.


But beyond the floor space, you need to think vertically. Take a good look at the ceiling height. Can it accommodate your towering storage needs? Make sure there's enough clearance for the installation of appropriate racking storage systems. The right ceiling height is integral to your storage. Traditionally, the industry has adhered to 32' ceiling heights as the standard.


However, with massively influential tenants like Amazon prioritizing cubic storage efficiency over mere square footage, the trend is shifting towards 36' clear height buildings. By embracing this taller ceiling height, tenants can unlock a significant boost in warehouse capacity, ranging from 10% to 25%. It's a strategic move that allows for greater storage potential and optimized utilization of the available space.


ai warehouse floor


To get a clear comprehensive space estimate, consider the elements of the floor plan that will be laid in place including the depth of the rack, flue spacing, and aisle width. Because when it comes to column spacing in your warehouse, every foot counts! With a 54' column spacing, you can have a 10' aisle with 48" racking. But beware of widening that spacing to 60' between columns, as it leads to wider 12' aisles and wasted space.


Size of your warehouse should also encompass any office space and accompanying bathrooms for those working on the property. In addition, the means for receiving shipping will shape the size of your footprint. For instance, some buildings have enclosed loading docks. In those cases, the square footage must accommodate trucks within a designated warehouse space. And on top of this, sufficient ventilation

Read more about how to find the best warehouse loading dock for your warehouse.


warehouse loading docks


Because beyond the size of the building, you need a proper sized lot to accommodate any large trucks or vehicles. You want to make sure you have at least 135 feet of marshaling room. Will trucks carrying equipment have enough room to park safely when they reach your facility? Not only this, but will your truck beds have enough room to navigate and turn around in your lot? The average trailer size is 48 feet to 53 feet long. A semi-trailer requires a ~55 by 14-foot space for storage. For trucks and trailers, this number is bumped up to 75 by 14 feet.  Make sure your facility eases ingress and egress with the appropriate size. 



A well-connected location enhances the efficiency of logistics and reduces transportation costs. That being said, your perfect location will be highly unique to your business’ needs and existing infrastructure. So, consider selecting the location of the industrial space in relation to certain key elements including:

  • transportation infrastructure
  • proximity to suppliers and customers
  • access to major highways and other shipping channels
  • availability of strong workforce
  • weight or height limits on nearby roads 
  • average traffic congestion of the area
  • average base rent across markets
  • tax differences across states and regions
  • laws or restrictions present 

The other obvious thing to mention in relation to location is how an area's climate will help or hurt your operations. If you are storing products that need to be kept at cooler temperature, your energy costs will likely be far higher in a generally warmer or Southern environment. An area's climate will also influence your roofing needs, as harsh weather demands durability. 


damaged metal roof


Location also includes the zoning and permits specific to the area. Ensure that the industrial space is zoned appropriately for your intended use and comply with local regulations. Check if any specific permits or licenses are required for your industry or operations. For a more in-depth discussion about how to find the perfect location for your warehouse, check out… 6 Considerations for Locating Your Warehouse


Cost of the Property

When selecting a warehouse, the asking point for the base rent will depend on certain factors to consider, including:  

  • The landlord and their willingness to negotiate  
  • Building availability in your area  
  • The term of your lease  
  • The creditworthiness of your tenancy, etc.  
  • The age of the building
  • Amenities offered
  • The type of the lease and escalation

These points will play off each other to influence the total cost of your occupancy. They also will give you leverage in negotiation to drive down your financial burden. Base rent is usually the most negotiable feature on the table because it is dependent on movable factors. It is also not the end all be all, because renovation costs, landlord concessions, operating expenses etc. will also play major roles in determining the net value of you lease. 


Regardless, conducting your due diligence on the points mentioned above puts tenants in a better position to negotiate costs in their favor.  


Utilities, Facilities, and Amenities, Oh My!

Evaluate the amenities and features that are critical to your business, such as loading docks, drive-in doors, dock levelers, ample parking space, office areas, lighting, restrooms, and utility connections. These features can significantly impact the efficiency of your operations.


For instance, a proper HVAC system is critical, especially if your materials must be kept at a certain temperature. Regular maintenance of HVAC systems is also important to ensure optimal performance and energy efficiency. This includes replacement of filters and reviewing temperature set points and making seasonal adjustments. Controlling outside air intake and avoiding heating/cooling outside air when the building is unoccupied can also help reduce energy waste. Heating systems that use high-efficiency boilers or furnaces are also more energy-efficient than those that use older, less efficient systems. So, if you're looking for new space, never forget to consider the age of the existing HVAC system. 


The type of lighting and heating systems used in an industrial property also plays a significant role in energy efficiency. Lighting systems that use LED or fluorescent bulbs are more energy-efficient than those that use incandescent bulbs.



Environmental Considerations

Depending on your industry, be aware of any environmental regulations or requirements that may apply to your operations. Understand the environmental condition of the industrial space, including potential environmental hazards and any remediation responsibilities.


This also includes any laws that push for carbon neutrality of large-scale buildings. While not yet in place everywhere, some states are mandating that facilities over 25,000 feet must scale down their carbon emissions to nothing. This can be a huge undertaking especially for older buildings. That is why there is an incredible demand now for premium and energy efficient facilities. Even though they come at a price, opting for one of these newer properties can save tenants a lot of headaches, fines, and renovation costs down the line.


Security and Safety

Prioritize the safety and security of your employees and assets. Evaluate the industrial space for adequate security measures, such as surveillance systems, access controls, and fire suppression systems. Consider any additional safety requirements specific to your industry.


Beyond the basics, a lot of tenants are taking extra steps for security due to rising national crime rates. So, think about whether your business would demand extra guards, CCTV systems, and gate refurbishments.  


warehouse cctv

Ultimate Warehouse Considerations 

When it comes to choosing a warehouse for your business, there are obviously many things you need to take into consideration. But to be honest, this list is only the tip of the iceberg. Have you considered the flooring yet? Because if the floor’s thickness can’t withstand the weight of your inventory, what do you think is going to happen? 


Do you know what class inventory your business is storing and how it will influence the sprinkler system you need?


The point is that before you can select the right warehouse, you need to know what you’re looking for. The list of factors seems endless, from proper ceiling heights and durable floors, to dock doors and HVAC. So, don't lose track. Learn the 70+ points you need to consider to find your optimal warehouse.


With over 30 years of experience representing industrial tenants at iOptimize Realty®, we specialize in finding the best warehouses at the best prices. Now, we are excited to share our expertise and empower corporate tenants like you. We have compiled our industrial real estate due diligence into a valuable free course that will equip you with essential knowledge. In this course, you will learn about crucial features such as warehouse size and layout, CapEx considerations, storage acreage, roofing and ceiling height requirements, sprinkler systems, construction materials, HVAC systems, creating functional office spaces within the warehouse, ensuring warehouse safety, finding suitable dock doors, and much more.


Enroll now to gain the knowledge and tools you need for successful warehouse selection.

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