- Very well located at Exit 19 immediately off of Route 128.
- Free standing building.
- 3 tailboard loading docks.
- 1 drive in door.
- Numerous amenities and services nearby.
There are a number of steps and factors to take into consideration when looking for the ideal warehouse space to accommodate your space requirements. I always tell my clients to start with their ideal list of space needs, if you start off with less than ideal objectives then you will certainly end up with sub-par results. Begin the process with a thorough space planning exercise. A knowledgeable real estate broker can help you with this and supplement with an experienced architect and/or engineer to develop your space program as needed. One underlying question throughout this process is how will your company use its new space? For example, are you looking for maximum clear height to fully utilize cubic space or does lower ceiling height work? With high bay space, material handling equipment and heavy duty racking is needed so cost of this needs to be taken into account. Other requirements to consider:
- Loading needs: What is the anticipated truck activity? Will full size tractor trailers be used and/or box size delivery vehicles and vans? If full size trailers are anticipated, then appropriate truck apron space is needed. This requires a minimum of 100 ft. of depth to allow for the trailer to back in. Is Drive in loading needed? If so, and interior garaging is required, then gas/water separator, ventilation and CO2 monitors will be required to meet fire, life/safety code. What is the anticipated volume of truck activity? How many loading doors are needed? This is important to insure the free movement of vehicles to minimize waiting and labor costs. Proper truck level heights and need for levelers should also be evaluated.
- What is the product flow and ideal configuration? Rectangular works better than long and narrow.
- Parking and outside space: Include your parking needs including auto and truck spaces in your list of requirements. Also is outside storage for trucks and/or product required? Note that not every municipality allows outside storage. Confirm local zoning ordinance for this type of use.
- Quality of space: Class A modern or lower price Class B? Is image important? Headquarters quality or just plain functional?
- Fire suppression: Is ESFR sprinkler system important or basic system? Wet or dry system? If you plan on not heating your space then dry system is needed. Note that sprinkler systems can be converted to the type of system that is required – at a cost. Also, very important is understanding the local municipal fire codes for sprinkler systems. Enforcement code for distance from sprinkler heads to top of racking varies from one town to another. In rack sprinkler may be required depending upon the nature of the product.
- Floor load: What are the floor load requirements for stacking the product? Ceiling height and height of racking are important considerations. Testing of a core sample of the floor of the candidate property by a structural engineer may advisable.
- Energy efficiency. Will you be heating and cooling the space? Understanding the R factor of a roof and how well walls are insulated should be investigated when evaluating properties.
- Lighting: Sodium vapor and fluorescent lighting fixtures no longer meet code. Energy efficient fixtures such as T-8 or even T-5 lighting should be installed. Energy companies still offer rebate programs to install these.
- Location: Perhaps the most important factor. Is the stem time to ship to your customers the primary concern? Commuting distance for your employees and future hires? Location will affect price as well as will quality of the space. In the Boston area, proximity to downtown has a direct correlation to price as does age, quality of the space and other factors such as ceiling height. Pricing for distribution space along Route 128 may be similar as space on Route 495 but higher quality/modern facilities with 30 ft. clear height, ample loading and parking and ESFR fire suppression systems are more prevalent along Route 495.
- Cost: Budget for space is always an important factor. Besides base lease rate, have a full understanding of what costs are included and what are not included in the deal (see my 3/5/15 and 4/10/15 blog posts). An experienced commercial real estate broker can help you with this. A history of operating expenses should be obtained for candidate properties to understand costs involved with operating a property.
- Special requirements. Does your business require other out of the ordinary type of requirements such as above spec power, storage of hazardous materials, etc. Also, determine amount and layout of office space required. Typical ratio of office to warehouse space found in distribution facilities is 5% of total building area. An experienced commercial real estate broker can advise your accordingly on these matters.
With the aforementioned ground work completed you and your broker will be prepared to commence searching for the ideal property.
While searching for properties, current market conditions should be taken into consideration to understand the challenges involved with finding the ideal space. Currently, national industrial vacancy levels are at a 30 year low and occupancy gains continue as e-commerce demand is absorbing space. Current trade policies may impact future vacancy rates as the Trump administration seeks to renegotiate or withdraw from NAFTA and has pulled out of the TPP. A knowledgeable commercial real estate broker that specializes in industrial space will understand current market conditions, trends, pricing and concessions being offered and be your advocate to help to negotiate the most advantageous deal on your behalf.
An experienced commercial real estate broker will also dig deeper and not rely on a simple Loopnet or Costar search for property but will have a distinct pulse on the market, the resources, relevant contacts and connections to conduct a thorough search to navigate the market and uncover ideal solutions. Further, the professional agent will continually look out for the client’s best interests throughout the negotiation and relocation processes.
Procuring the ideal warehouse space for your business is a multi-faceted and complicated process. Please contact me to review your specific space requirements and find the best solution to your specific commercial real estate requirements.
Warren Brown, President, Boston Commercial Properties, Inc.
The current state of the Greater Boston industrial real estate market is strong. In my 30 plus years of experience, I have never seen such low vacancy rates and resilience in this market sector. Consider the following: Current vacancy rates in this sector is approximately 6.1% and we have witnessed 18 consecutive quarters of positive absorption. This is unprecedented and truly remarkable. Given such tight market conditions, lease rates and market values have naturally risen.
While this pace of absorption and near full vacancy is bound to eventually swing back, I predict that there will not be a dramatic jump to ultra high vacancy rates. A major contributing factor to reduced supply has been the removal of large swaths of industrial space as these properties have been re-purposed to higher and better uses. Consider that approximately 2,000,000 square feet of industrial space was scrapped to make way for a new life-style center at University Station in Westwood. Once a vibrant, high-demand industrial park is now a mixed used residential, office and retail development including anchors such as Wegman’s, Target, TJ Maxx, LifeTime Fitness, Bridges by Epoch, several restaurants plus a Marriott Courtyard hotel is now under construction. North of Boston, the once staid Northwest Industrial Park in Burlington has been transformed to “3rd Avenue Burlington” which includes popular restaurants, residences, and recreation including Kings Bowling.
In the wake of the removal of industrial space, little new construction has followed. Even with such compressed vacancy rates there are just a handful of spec construction projects. Examples include: 151 Charles F Colton Road in Taunton (200,000 sf), 600 West St in Mansfield (91,000 sf) and Kevin Lucy’s 140,000 sf project in Peabody which is rumored to be committed.
New construction has the added benefit of adding modern, high bay space that is more suitable for current manufacturing and distribution requirements. Ceiling heights in these new buildings tend to be 30 ft. clear allowing for higher storage capacity and use of technically superior material handling equipment, heavy floor loads and ESFR sprinkler systems. Drivers for industrial demand will continue with the advances in the biotech industry, e-commerce and the growing population will always have a need for such essentials as food, pet supplies, tires, etc. Indeed we have seen new build to suit projects such as Martignetti’s new headquarters distribution center and Sullivan Tire’s new facility in Taunton.
While I realize that record low vacancy and absorption rates are not sustainable forever the demand drivers, the lack of new supply plus limited land sites to support new construction will continue to dampen a dramatic increase in vacancy rates. The likely scenario in a down market and inevitable economic downturn will be that Class B industrial product will first see vacancy rates rise. Real estate is a commodity and will behave as such subject to supply and demand. Absorption will slow and vacant properties will linger on the market. In such scenario vacancy rates will likely rise to low double digits and values will decrease as much as 20%. While such market disruption is not desirable this is not a cataclysmic outcome.
Please contact me review and find the best solution to your specific commercial real estate requirements.
Warren Brown, President, Boston Commercial Properties, Inc.