Cowarehousing Takes Center Stage In The Sharing Economy

The sharing economy gains steam seemingly every day.

From coworking and coliving to car sharing, consumers are embracing money-saving strategies that also benefit the environment.

Now, as e-commerce drives the competition for space to store inventory, cowarehousing is emerging as a solution for online retailers.

Online retail sales in the U.S. reached $870 billion in 2021, a 14.2% increase from 2020 and a 50.5% jump from 2019. Meanwhile, real estate firm JLL reported a 46% increase in leasing by logistics and distribution companies from 2019 to 2021.

Cowarehousing means multiple companies use the same warehouse space, which significantly reduces users’ operating costs by alleviating upfront construction costs and ongoing maintenance responsibilities as well as allowing them to rent what they use.

“Scalable workspaces and sustainability go hand in hand,” said Laurent Opman, CEO of FlexHQ, which offers cowarehousing spaces in Los Angeles, Denver, Dallas and Salt Lake City. “We aim to set a new standard for the cowarehousing industry by demonstrating that repurposing existing structures is not only good for the environment, but it’s also a viable solution for meeting the evolving needs of modern businesses.”

FlexHQ, which opened its first cowarehouse in Los Angeles in late 2022, transforms large warehouses into smaller, more affordable and secured individual warehouse spaces along with offices, conference rooms, content studios and other amenities. Its month-to-month leases and customizable workspaces enable businesses to expand easily.

FlexHQ’s first cowarehousing venture in Los Angeles was fully leased within four months of opening in 2022. The location houses a variety of tenants, including import-export operations, tech startups, e-commerce businesses, event production companies and retail manufacturers.

FlexHQ is opening another cowarehousing project this summer in Denver. The launch comes at a time when Denver ranks among the top markets for warehouse space with a first-quarter industrial vacancy rate of 7.8%, according to JLL.

Start generating passive income through real estate

Check out these featured investments from Benzinga's Real Estate Offerings Screener.

The company acquired the property in September 2022 for about $10.8 million and renovated the property, resulting in 67 additional warehouse spaces ranging from 300 to 3,000 square feet and 21 private offices.

“The whole experience of our warehouses is very different from traditional ones,” Opman said. “It’s about creating a community between our tenants and really focusing on the user experience.”

FlexHQ joins Saltbox, another cowarehousing company operating in Denver. Founded in 2019, Atlanta-based Saltbox also operates in Atlanta, Dallas, Los Angeles, Miami and Minneapolis.

Read next: REITs with Massive Dividend Yields: A Close Look At Five Key Players

Photo courtesy of FlexHQ