After decades of steady outsourcing, the American economy has shifted gears: more than 25 million small business owners continue to drive the burgeoning market of e-commerce, and demand for industrial warehouse space is considerable. In addition to an anticipated need for more than 250 million square feet of usable space — to satisfy retailer demand for product storage — there is also increased interest in the potential of abandoned and unused warehouses and factories across America.
Recently, one of America’s technological powerhouses announced plans to convert a coal plant to a server farm that will run on renewable energy. Making use of the factory’s existing electrical and water systems, the company plans to leverage upcoming changes to environmental law to its long-term advantage. Currently, there are more than 20 nuclear power plants across America whose license to operate is set to expire in less than a decade, and companies with a strong commitment to green energy may find themselves in a position to provide a public example of responsible stewardship.
Industrial warehouse space for server farms remains high across America; although the terminology can be a bit confusing, the term refers to large groups of computer equipment that act to store, process, and deliver data to either public or private clients. Requiring a considerable amount of electricity and a precisely-cooled environment, server farms are more frequently positioned in rural areas for the sake of space and security.
Companies that act on their commitment to bring jobs and training to smaller towns may find themselves welcomed instead of rebuffed in their attempts to acquire historical factories and industrial warehouse space. The average consumer may not understand the technical intricacies of warehousing and distribution — and may not be familiar with the term “server farm” — but does understand that they would rather patronize a company with a demonstrable track record of implementing clean energy programs.
Making the decision to lease industrial warehouse space can mean considerable tax savings, and less money spent on broker fees and down payments can mean more money spent on marketing, product development, and staff training. The integration of robotic technology into warehouse environments around the world can also be facilitated by leasing a warehouse.
In general, money saved on facility repair and upkeep can be funneled directly into energy conservation, public relations, and long-term staff acquisition with an eye toward future expansion efforts. Leasing commercial warehousing space must be concurrent with determining warehouse space needs: e-commerce retailers often contract for the storage of product at offsite warehouses that can be located anywhere in the world. New models of e-commerce continue to evolve, and commercial real estate continues to experience enthusiastic demand and unprecedented growth metrics.
Is there an end to the investment potential for warehouse space in America? As the digital retail market continues to flourish, investors might hedge a guess that growth will continue unchecked for the next decade, and that lessors are optimistic for very sound reasons.