What Is Shared Industrial Space?

Shared industrial space functions as a collaborative environment where multiple businesses utilize portions of the same facility for manufacturing, warehousing, or distribution purposes. Unlike traditional leases that require companies to secure entire buildings, this model allows businesses to rent only the space they need while sharing common areas and resources with other tenants.

These spaces typically offer flexible terms ranging from month-to-month agreements to longer commitments, making them particularly valuable for growing companies or those with seasonal production needs. The shared industrial model has gained significant traction as manufacturing and logistics companies seek more adaptable solutions that align with changing market demands and production requirements.

How Shared Industrial Spaces Function

The operational structure of shared industrial facilities centers around efficiency and resource optimization. Most properties feature individually secured production or storage areas alongside common loading docks, shipping facilities, and sometimes shared equipment. This arrangement allows tenants to maintain private operations while benefiting from economies of scale.

Management companies typically handle facility maintenance, security, utilities, and sometimes offer additional services like material handling or logistics support. This comprehensive approach enables tenant businesses to focus on their core operations rather than facility management. The flexibility extends to space configuration as well, with many facilities offering options to expand or contract leased areas as business needs evolve.

Provider Comparison: Leading Industrial Space Solutions

The shared industrial space market features several established providers with distinct offerings. Prologis stands out with its global portfolio of industrial properties and emphasis on sustainability in facility design. Their spaces typically include advanced logistics capabilities and smart building technology.

For businesses seeking specialized manufacturing environments, First Industrial Realty Trust offers facilities with enhanced power capacity and specialized ventilation systems. Their spaces cater particularly well to light manufacturing and assembly operations.

Rexford Industrial focuses on providing shared spaces in infill markets, offering proximity to urban centers and transportation hubs. Their properties frequently feature modernized loading capabilities and flexible space configurations to accommodate diverse operational needs.

ProviderSpecializationTypical Lease Terms
PrologisLogistics-focused facilities6-month minimum
First IndustrialManufacturing spaces12-month standard
Rexford IndustrialUrban infill locationsFlexible terms available

Benefits and Drawbacks of Shared Industrial Facilities

Key Advantages:

  • Cost efficiency through shared infrastructure and services
  • Reduced capital commitment compared to standalone facilities
  • Flexibility to scale space according to business needs
  • Access to premium locations that might otherwise be unaffordable
  • Networking opportunities with complementary businesses

However, shared industrial arrangements come with certain limitations that businesses must consider. Privacy concerns may arise in shared environments, particularly for companies with proprietary processes. Scheduling conflicts can emerge around shared resources like loading docks during peak periods. Additionally, companies have less control over facility modifications compared to owned properties.

For businesses with highly specialized requirements, providers like Duke Realty offer customizable solutions within their shared industrial campuses, allowing for some degree of facility adaptation while maintaining the benefits of the shared model.

Pricing Models and Cost Considerations

Shared industrial space pricing typically follows several models, each suited to different business needs. Square footage rates represent the most common approach, with prices varying based on location, ceiling height, and access to loading facilities. Many providers like Industrial Logistics Properties Trust offer tiered pricing based on commitment length, with discounts for longer terms.

Additional costs to consider include:

  • Common area maintenance fees (typically calculated as a percentage of leased space)
  • Utilities (sometimes metered separately, sometimes shared)
  • Security deposits (often equivalent to 1-2 months of rent)
  • Insurance requirements (both property and liability coverage)

Some innovative providers like STAG Industrial have introduced usage-based models for certain industrial applications, where companies pay according to production volume or throughput rather than solely based on space occupied. This approach aligns facility costs more directly with business activity levels and can be advantageous for operations with variable production schedules.

Conclusion

Shared industrial space represents a strategic opportunity for businesses seeking operational flexibility without the commitment of traditional industrial real estate. By carefully evaluating needs against available options, companies can leverage these collaborative environments to optimize costs while maintaining production capabilities. As the industrial landscape continues evolving, these shared models will likely expand with more specialized offerings and technology integration. For businesses facing changing market conditions, shared industrial space offers a pragmatic path to operational resilience and scalability.

Citations

This content was written by AI and reviewed by a human for quality and compliance.