Shadow Space- What is it and Where is it Found?


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 may not. A local real estate broker or 3PL are some examples of those who can be a great source and offer great solutions for warehousing and distribution.

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 Spartan Logistics' 3PL solutions, click the link below to contact us or call our sales team at (614) 497-1777. 

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Topics: Diminishing Warehouse space, Future of Logistics, Industrial Real Estate Market, Supply Chain Strategy, Logistics News