Co-Warehousing Space In North Denver Set To Open This Summer

A 75K SF flexible warehouse project in north Denver set to open this summer demonstrates the early proliferation of a new trend among warehouses into the market.

The building, at 5180 Fox St. in Globeville, will be Denver’s first “co-warehousing” building, according to FlexHQ CEO Laurent Opman. FlexHQ initially purchased the property in September 2022 for about $10.8M and renovated it to include 67 individual warehouse spaces, 21 private offices and electric car charging ports. It was designed by California-based engineering firm Ware Malcomb and CBRE helped manage the construction process, Opman said.

The space is set to open at a time when Denver is among the top markets for warehouse space, according to figures from JLL. Denver’s industrial vacancy rate stood at 7.8% in Q1 2023, pushed up by the record amount of construction that has taken place in recent years. 

“We think co-warehousing is a very rational way to re-create life for old buildings,” Opman told Bisnow. “Many brokers told us that these kinds of buildings are obsolete now. But there is still a big need for these kinds of buildings in different communities.”

FlexHQ opened its first co-warehousing space in Los Angeles in 2022, and Opman said it was fully leased within two months. The Los Angeles space has tenants ranging from import-export operations to e-commerce and retail manufacturers. Opman said the wide range of tenants illustrates how co-warehousing can appeal to a variety of businesses. 

Pre-leasing will begin at the Denver project in mid-June, FlexHQ said via email.

Traditional warehouses typically serve one or two tenants and don’t often provide flexibility as far as the amount of usable space is concerned, Opman said. For example, if a business leases a 10K SF warehouse space but only uses 5K SF, the business will still have to pay rent on the additional square footage even though it is unused. That business would also be responsible for paying to outfit the warehouse space with the equipment they need to operate, Opman said.  

That is one of the problems that FlexHQ’s co-warehousing model is designed to solve, Opman added. The FlexHQ warehouse in Globeville includes 67 office spaces that range from 300 SF to 3K SF and also comes with internet, conference rooms and commercial kitchens, similar to what coworking spaces provide to office users. These services are provided by FlexHQ employees instead of third-party providers, Opman said. 

However, these amenities also come with a cost. Opman said FlexHQ’s average rent at its Los Angeles location is about 2.5 times higher than the average warehouse space and about twice as much as a self-storage option. 

JLL measured the average asking rent for industrial space in the Denver area at $8.69 per SF in Q1 2023.

However, the amenities provided by FlexHQ can help reduce a business’s overall operational costs when maintenance and construction are accounted for, Opman said. 

“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.”