Co-warehousing solutions are gaining traction, providing valuable alternatives for the increasing number of small businesses and users with short-term space needs. In 2023 alone, over 5.5 million new businesses were registered, marking a record-breaking trend, according to Census data.

Small businesses now make up nearly 44% of the nation's GDP and employ around half of the workforce. Their operational requirements, especially in the industrial sector, vary greatly by industry. Many need industrial spaces to function, and co-warehousing solutions offer an appealing option for them.

The competitive landscape in industrial real estate has intensified, with major players launching their own flexible warehouse solutions, and some specializing in sectors like e-commerce.

Co-warehousing blends traditional warehousing functionality with the flexibility and cost-effectiveness of coworking spaces, as noted by Jeff Mirel, principal at The Rosenblum Cos. It allows businesses to focus on scaling their core operations while reducing the hassle of equipping and managing warehouse space.

Between 2022 and 2023, approximately 1.1 billion square feet of industrial space was added, pushing the national vacancy rate to 6.4%, as highlighted in a recent CommercialEdge report. This, coupled with a slowdown in large-scale, single-tenant deals, opens doors for the co-warehousing model to thrive.