While the supply of warehouse space throughout the country remains low, it is a misconception that the total vacancy rate represents the sum of the space available in a given market. The term "shadow space" refers to space that a tenant is leasing, but is not currently utilizing. In most cases, shadow space occurs when:
- A tenant leases more space than they need with the expectation of future growth
- Downsizing occurs for a customer within a facility who now occupies a smaller percentage of the space
- Space requirements change after signing a lease and leaves capacity that the tenant no longer needs
Many companies are looking to find shadow space because warehouse vacancy continues to plummet across the country. For example, in Columbus, Ohio, warehouse vacancy sits at record lows with just a 2.5% vacancy rate, and over 5 million SF of industrial space was absorbed in the first quarter of 2022 (NAI Ohio Equities). This now multi-year movement can be attributed to several trends, including:
- Manufacturers building inventory since the pandemic to prepare for a shortage of goods
- The increasing shift from traditional retail space to e-commerce order fulfillment
- Labor shortages and disruptions in the supply chain have left warehouse operators unable to turn their product
While these effects have left many businesses scrambling to find the right solution for their supply chain, shadow space is more common than one would think. The most important key is to have partners who have expertise within a local market and who often know about opportunities that others do not. At NAI Harmon Group we are able to not only able to assist in locating shadow space, but we are able to connect our customers to a 3PL service.
Spartan Logistics has space opportunities coming available in Columbus and could be the ideal location for your company's distribution needs. To inquire about this opportunity in Columbus or to hear more about NAI Harmon Group call 419-960-4410.