ON THIS PAGE
A warehouse that has sat empty past 90 days usually has one of five problems, and only one of them is the rate. Before you cut the price, figure out which one you actually have.
THE FIVE CHECKS, IN ORDER
- Price: against closed comps and shadow supply, not hopes
- Exposure: is anyone actually marketing it?
- Audience: is it sold to the tenant it actually fits?
- Product: power, buildout, doors, and often a terms fix
- Market: sometimes nothing is wrong
Most warehouses that sit aren't overbuilt or unlovable. They're priced against the wrong comps, marketed thin, aimed at the wrong tenant, carrying a fixable product problem, or listed into a slow quarter. Here's the diagnosis we run, in the order we run it.
$6,500/mo
What an empty 5,000 SF unit at $1.00 NNN really costs: $5,000 in rent nobody collects, plus about $1,500 in taxes, insurance, and CAM ($0.30/SF) the owner eats instead of the tenant.
CHECK 1
The price check
Not against what you'd like to net, and not against last year's rate plus a bump. Against three things: what actually leased near you recently (closed deals, not asking rates), what's listed against you this week, and the off-market space that would take a deal without ever putting up a sign.
That shadow supply is real competition, and most pricing ignores it. Priced right, small-bay listings in this valley typically see first offers inside 30 to 60 days. Past that window with no offers, keep reading before you touch the number.
CHECK 2
The exposure check
Listing and marketing are different jobs. A listing is a LoopNet entry and a yard sign. Marketing is photography that shows the space at its best, copy written for the tenant the building actually fits, direct calls to the tenant-rep brokers working your submarket, and a sign with a cell number that gets answered on a Saturday.
The quick test: you should know which brokers have heard about your building this month. If you don't know, exposure is your problem, and it's the cheapest one on this list to fix.
CHECK 3
The audience check
We leased a flex space on West Temple this summer that a plain warehouse tenant was never going to take. Wide-open interior, grade-level door, workable rate, and a storefront layout the typical warehouse user has no use for, which made it read expensive against plain warehouse comps.
Retail-capable flex is its own product, so the marketing sold the storefront and the foot traffic, 300 apartments within walking distance, and it leased to a specialty supplier running a hybrid retail and distribution operation.
"The unit didn't get cheaper and the door didn't get bigger. The audience changed."
If your marketing describes a building the right tenant doesn't want, tours don't happen.
CHECK 4
The product check
Sometimes the honest answer is the building. Not enough power for the tenants touring it, an office buildout the size band doesn't want, a door situation that kills the obvious use.
Some of that is a capital conversation. A surprising amount is a terms conversation: paint, carpet, and a panel upgrade on a longer lease often beats a rate cut, and it keeps your face rate intact for the next renewal and the next appraisal.
CHECK 5
The market check
Sometimes nothing is wrong. Demand in this valley moves in waves by size band, and some quarters a 10,000 SF box simply has fewer tenants hunting than the quarter before. When that's the read, we say so.
The move is patience or a shorter, more flexible deal, not a permanent cut that reprices the building for years to solve a two-quarter problem.
Why this order
Run the five checks in that order, because they're ordered by cost.
| Check | Cost to fix |
|---|---|
| Exposure | Nearly free |
| Audience | A rewrite |
| Product | Terms first, less than it looks |
| Price | A rate cut is permanent |
| Market | Patience, or a shorter deal |
Space been sitting? We'll run this exact diagnosis on it.
The marketing assessment covers the exposure and audience checks. A rent analysis settles the price question with closed comps instead of a hunch. Both free, no obligation, and if the work is already being done right, we'll tell you that too.
Get Our Quarterly Market Report
Salt Lake Valley industrial vacancy, rent trends, and deal data, delivered to your inbox every quarter. No spam.