When it comes to warehouse space, bigger isn’t always better.
Scores of businesses have learned that the hard way after being saddled with far more space than they need, simply because that’s all that’s available. And the leases on large spaces are typically long-term and pricey with little in the way of amenities.
Enter FlexHQ.
How it works
The Los Angeles-based company’s “co-warehousing” business model involves buying large industrial warehouses and subdividing the interior to create smaller spaces, along with offices, conference rooms, a photo/filming studio and truck loading docks.
FlexHQ’s first facility at 3040 E. 12th St. in L.A. comes with flexible month-to-month lease terms that allow businesses to expand into a larger space, or downsize into a smaller one when needed.
“The building is 199,000 square feet, and we’ve created 27 smaller warehouse units and 10 office spaces in the first phase that range from 500 to 3,000 square feet,” said Ryan Jones, the company’s director of customer experience. “Most of those spaces have been leased, and when we’re done there will be 139 individual warehouse and office spaces.”
The facility, which opened its doors in mid-October, also has a podcast space, a kitchen and a reception area where businesses can meet with clients. Co-working desks will be added in the second phase of renovation.
Two-thirds of the building is expected to be converted by the end of 2023.
‘Great curb appeal’
Nolen Niu, whose Vivid Design & Fabrication business provides custom upholstered furniture for hotels, restaurants, nightclubs and other venues, leased a 1,000-square-foot space in the building in March.
“I’m paying $2,500 a month and there are lots of nice amenities,” Niu said. “It’s a beautiful place. Very client friendly with great curb appeal. The concept is brilliant.”
Niu especially likes the flexibility that comes with a co-warehousing space.
“My business is seasonal,” he said. “At one point I was leasing a 16,000-square-foot facility and the cost was difficult to weather when business slowed. I also like the idea that with FlexHQ you don’t have to go through a real estate agent if you want to expand or go down to a smaller space.”
Wardrobe Skate, a business that sells custom design plates that can be easily velcroed to the bottom of a skateboard, has leased 500 square feet.
“It was hard to find a space of this size before we came here,” said Cornell Miller, the company’s founder and patent holder. “I was renting space at another place that had the same kind of concept … but it didn’t seem safe. There were forklifts running around all the time.”
Miller said his new space is a better fit — in more ways than one.
This is a lot cleaner and more organized,” he said. “And more importantly, it feels safe. That other place was like the Wild West.”
FlexHQ, which also has 23 years experience in operating self-storage units in the greater L.A. region, is looking to expand its co-warehousing operations.
“We’re set to open additional co-warehousing spaces in Denver, Dallas and Salt Lake City this year,” Jones said. “We’re also looking in the Atlanta area.”
Other advantages
Co-warehousing also provides opportunities for companies to interact with like-minded entrepreneurs who are engaged in the same type of business.
That kind of community environment can lead to connections, partnerships and new opportunities that can help businesses grow, according to Coworking Insights, an online company that tracks business trends, data and strategies.
“These relationships can extend to include collaborations with shipping, delivery or supply services that work with the other tenants in the warehouse,” the company said.
Coworking Insights applauds the flexibility that comes with co-warehousing operations.
“Co-warehousing allows companies to pay for only what they currently require and add space incrementally as they grow,” the company said. “This can be particularly crucial if a business only requires storage space on a seasonal basis.”
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