There is over a billion square feet of warehouse space in just Southern California, and almost all of it is full. Vacancies are at their lowest, rents are at an all-time high and they are continuing to climb.

This is not just a California problem: across the United States, warehouse rents have increased by an average of 5.6% every year since 2012.

The good news is that a thriving economy is driving growth in almost all sectors. The bad news is that as your business grows beyond your current storage capabilities, you may get caught in an unprecedented capacity crunch.

What can you do?  Look skyward.  You can build additional vertical capacity by using a mezzanine system. Mezzanines can take advantage of space between the ceiling and the tops of existing racking and workstations, and allow you to occupy as much of the cube as possible.

Warehouse mezzanines are becoming more and more popular as companies try to maximize their space utilization. These platforms offer numerous advantages versus adding a warehouse or completely relocating, including:

• No Construction Delay: building out new warehouses can take years of planning, and typical development and construction projects are prone to zoning issues, permit delays, weather delays and so on. Mezzanine construction can happen in a matter of weeks, and the chances of running into unexpected delays are almost nonexistent.  
• Minimal Disruption: moving into a new location can be incredibly disruptive to your business. Moves often involve days or sometimes even weeks of down time.  With many mezzanine systems, you can continue business as usual and have installation work completed in off hours. 
• Operational Cost Stability: If you’ve got a warehouse, you’re already paying for light, heat/AC and taxes. When you add a location, those costs essentially double. If you relocate into a larger facility, your expenses increase. With a mezzanine system your operational costs hardly change at all. 
• Tax Treatment: On a federal and state level, mezzanines are subject to 7 year capital equipment depreciation instead of a 31 year depreciation schedule for permanent structures.  At a local level, your square footage does not increase, meaning that in most areas your property taxes don’t increase. 
• Employee Morale: quite often, moving a warehouse can mean significant changes for employees. New warehouse space is often far outside of city centers, which can mean shifting commutes or even different taxation for workers. Mezzanine solutions allow your workers to stay in place.  
• Versatility and Customization: mezzanine systems are modular, meaning you can add and remove components as your business requirements change. Need to add offices or conference rooms?  You can buy office modules just for that purpose.  Need more storage space?  You can add floor space.  Virtually any requirement can be addressed with a mezzanine system.

Mezzanine solutions are a smart, cost effective alternative to adding or moving locations, and all warehouse operators should consider a mezzanine strategy when dealing with warehouse capacity constraints.  To learn more about mezzanines, call a material handling expert at Raymond West today!