Industrial real estate is a hot topic right now, but something people often overlook is the material handling systems to outfit their warehouse space. Over the last two years, supply and demand has effected most industries around us, and material handling systems are no exception. Matt Kapfhammer, Business Development Leader at Koppco Material Handling, is here to give his take on how to plan your warehouse space, when to start, and what type of gaps users may not be aware of when entering a new warehouse space as they grow and expand their business.
As Matt explains, the transition between material handling systems planning and the search for industrial real estate is not seamless. Often times, tenants will think of their material handling systems as a line item in their search for space when it should instead be a top priority. The industrial market is tight right now; five years ago, it was much easier to find space, but with fewer options today, you need to act quickly. Planning ahead for your racking needs will put you ahead of the game when four or five tenants fight for each space as it becomes available.
Timing is everything whether you are ordering new racking, buying used, or taking existing systems with you. Ordering new shelving can be costly and time consuming. With the price of steel soaring (up to $135/pallet now versus pre-pandemic costs around $60/pallet) and turnaround times taking anywhere from 12 to 30 weeks, tenants should contact professionals as soon as possible to begin the process. As Matt notes, some tenants will even order racking before their lease is signed or warehouse is built so they can hit the ground running. While there is risk in this, it usually makes the most sense.
The price per SF and building location are obviously key factors in any real estate search, but the end-product should be the goal. When developing a building, how you design the storage space, ceiling height, and column spacing in terms of machine navigation, employee requirements, and safety qualifications will make or break your relocation. Shelving is as important as the infrastructure of the building itself in the industrial real estate world.
Will there be a time when the material handling systems industry normalizes? Matt doesn’t think it will return to pre-pandemic lows anytime soon. Consumer needs drive the industrial market, and the online demand for goods will continue pushing the need for warehouse space and supplies.