Industrial Spotlight:

Maximizing Warehouse Effeciency 

Sean Smith – September 16, 2019

Space Utilization is a term used to determine how efficiently Tenants are using their space. Measured by the annual rent per rentable square foot divided by the inventory of pallets, a Space Utilization analysis can illustrate the benefits of growing vertically, not horizontally. Although rent per square foot may increase, by racking higher, Tenants are increasing efficiency and reducing their footprint resulting in a lower overall real estate spend.

According to Method Architecture: 

In a building with a 36-foot clear height, a user will be able to rack one pallet position higher. Fifty-six-inch pallets require 37 feet clear before they can gain another pallet position.

The vertical expansion to taller clear heights is based on the efficiencies in utilizing more cubic space rather than a larger footprint, maximizing the volume of the “cube”. Taller clear heights allow companies to store more palletized product, which translates to lower occupancy costs per square foot.

The height of pallets can vary, however, roughly 50% of the market utilizes 64-inch pallets. Other common sizes include 56-and 72-inch pallets. This measurement is the height of the pallet which indicates which rack size is needed. Structural pallet racks are designed with spacing between racks at 64, 72 and 80 inches. This means the average 32-foot clear height facilities can accommodate between four and six pallets.

Overall, tenants can increase cube capacity by 10 to 25 percent by going to 36-foot clear heights over the same footprint with 32-foot clear heights.

• 72% of existing buildings had 32’ clear heights
• 73% of the projects under construction also had 32’ clear heights
• 82% of proposed industrial developments had 36’ clear heights.

This tells us that the industrial market nationally is moving toward a 36’ clear height standard.

For more information on how to maximize your warehouse space, contact Sean Smith at ssmith@whiteboxrealestate.com or 214-974-8380.