It can feel almost like magic when consumers order products through the vast network e-commerce service providers operating in the world today. A seemingly endless selection of products can be delivered to your doorstep by pressing a button on the internet. This happens sometimes even within a single day. We often forget the massive infrastructure required to make this process possible. The demand for warehouse space has increased in many industries. companies such as manufacturers and wholesale distributors use large warehouses.
Amazon and other e-commerce companies have led to an increase in demand for industrial space, including warehouses. This can be a threat to small businesses, who are forced to compete with larger and wealthier bidders in order for the same amount of space. This boom in demand may also present an opportunity to small businesses who have excess space that they can lease or sell.
Warehouse rents are rising as demand increases
Real estate prices have been affected by the demand for ecommerce services. This helps to explain the increasing demand for warehouse space and need for industrial land. CBRE reports that the price of large industrial parcels has doubled in the last year. CBRE research shows that prices for smaller and more numerous industrial plots near metropolitan areas have increased by $50,000 over the past year, to average $250,000 per acre.
warehouse rents are not only high because of the rise in online shopping. This industry also tends to require more space. The New York Times reported that, according to research by industry analysts, e-commerce businesses require up to three times the space of a brick-and mortar retailer.
Warehouse space: challenges and solutions
It is clear that this creates problems for smaller businesses who need to compete with buyers much more wealthy. One solution to the growing demand for warehouse space is to use short-term loans.
Other companies can also benefit from this increase in land demand. The New York Times reported on developers’ success in converting land parcels that were used by outdated or obsolete businesses, such as shopping malls, into distribution centers. This could be a very attractive option for land owners with large amounts of dilapidated, unused property. As a way of boosting their income, construction companies and wholesale distributors may also consider leasing out their services or space to commercial tenants.
Diversifying your revenue can be a powerful tool for long-term growth. However, it is not something that everyone has access to. Small business financing can be used to take advantage of an opportunity, or supplement cash flow in peak periods. This is a great solution for those who are short on time and have limited funds.
Speak to QuickBridge for more information on how a short-term business loan can work.
