Warehouse Development- Value Add

[Cole Bigbee]

Hello BP world- 

Just wanted to briefly discuss things to keep in mind when developing or purchasing a warehouse. When looking to purchase an existing building, always look to see how easily the structure can be divided to accomdate multiple tenants without a lot of crossover from one business to the other. There's a lot of value that can be added to a project if you are able to take one large building and divide it up. 

When developing a building, if you have a large warehouse that you would like to rent to one tenant, that is great but keep in mind that if things change your building needs to be an easy conversion to accomdate multiple tenants. The below pic is my latest project. It is a 25,000sqft building that is setup to be split if 2 tenants need to be accommodated. We were fortunate enough to lease the whole building to one tenant but if something happens to that tenant and we need to split it up, we can do it in a short amount of time.

I hope this post is a help to those looking to purchase or develop warehouse space.

CB 

[Henry Clark]

@Cole Bigbee

Thanks for this and past info.  Moving along with our "Contractor rental" project.  Actually at the stage of this particular post.  Trying to decide on size of units and future potential splits.

Attached is the actual ground.  Then a preliminary discussion layout with the Engineer, who is going back and making some changes.  We are trying to figure out building sizes and layouts.  Concerns:

1.  Can we get away with no fire sprinklers based on size, he is researching.  We won't allow welding, painting, auto repair, semis, heavy equipment, etc.  

2.  Re-sizing of storm retention pond.

3.  Best Building footprint to maximize users as discussed above.  The market that is doing great in our area is 25 wide by 40 to 50 foot deep.  Being able to join two of these together also.  Could be electricians, plumbers, landscapers/lawn service/snow, car enthusiasts, motorcycle clubs, etc. Currently our market is $1 PSF/Month. With varying N/N scenarios. Usually property tax is included along with grounds keeping. Just Electric/Sewer/Water N/N. Larger warehouses are running $6.50 to $9 PSF/year.  Our 10 x 20 storage units run $.65PSF/month.

The grey area and to the south of them next to the storm pond will be the Contractor buildings.  The buildings to the north are future Storage units, which will probably be sized to accommodate (12 by 40 x 14 tall) these contractors or RV's.

Don't get hung up on the grey areas sizes and parking.  Our second pass he will use a 70 x 100 footprint and try to squeeze as many buildings in as possible.  Versus doing one large building, don't want to take the gamble, thus we will stage smaller buildings as they fill up.

All units will at least have one 12 wide x 14 tall (clear height) panel door; 16 foot eaves.  Also walk through door.  Window above door for light.  Electric 220/240, water, sewer.  For potential bathroom/office buildout.  HVAC "Split" go 50/50 if they want.  Also gas or electric heater, if needed.

Not going to be a "hog" and stuff this ground.  Want to leave plenty of rentable parking spots for trucks and trailers.

If you could give some insight here:

1.  70 x 100 is the footprint I plan to use or other with 10 foot increments.

2.  Potential splits.  Front side-  70 x 100;  70 x 50; 70 x 25;  Side approach if driveway allows- 35 x 40; 35 x 50; 40 or 30 by 30.  Same on the other side, with middle being bull 70 deep.

Appreciate your thoughts.  Not tied to 70 x100 yet.  Just playing with setbacks, parking, turnarounds, storm pipes between the two buildings, etc.

Have gotten two quotes and looked at buildings.  Plan to go with a "Sukup" building.  I'm in Iowa and this is a local/regional brand.  I already do a lot of business with the contractor on other products.  He won't be adding in any markup on the building itself, thus it came out very favorable.

Already have land, zoning and financing set.  Just working on building footprints and then how we stage the buildings.  At this time of year, might do underground for the whole project and do one or two pads and roads.  Lock in the buildings over the winter, if prices go down, for an early spring build.