Ceiling Heights: is 40’ clear the new 28’ clear?

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Warehouses raise the roof

Steven H. Tick, SIOR, Principal

Clear ceiling height is defined as the usable height in a warehouse to which a tenant can store its product on racking, measured below any obstructions such as joists, lights or sprinklers.

Over the years demand for higher ceilings has steadily increased to meet tenants’ requirements for more cubic space in their facilities. Warehouses built in the 1970s, many of which are still standing today, generally featured 20-foot ceiling heights. In subsequent years typical ceiling clearances for new buildings grew to anywhere between 24 and 30 feet. In recent years, those numbers have again grown, to the point where many warehouses being built today feature 32- to 40-foot clear ceiling heights.

The chief motivator behind this trend is the rise in popularity of online retailers. These tenants need to be able to quickly access a large array of sometimes wildly varying product types in bulk. This necessitates not only a larger footprint but the ability to maximize utilization of the space’s interior. As a result, online retailers require approximately three times more cubic warehousing space than traditional brick-and-mortar retailers.

40-foot ceilings allow distributors to stack three to four 9-foot racks and still have space for fans and light fixtures, whereas 28- to 36-foot warehouses can only accommodate two or three 9-foot racks. However, the 40-foot warehouses are not necessarily beneficial for all companies and distributors.

There are numerous associated costs to consider. In addition to requiring more steel and higher tilt-up panels, the extra expense of developing a building with 36-foot ceiling heights or greater includes increasing the floor slab to eight inches from the traditional six inches to accommodate the additional weight of the increased racking and product. Also, sprinkler systems must be upgraded to allow more water flow, and column spacing must be enlarged to accommodate the larger lift devices required to transport product.

These increased construction costs mean that a building measuring 300,000 square feet or larger will cost approximately $1.25 per square foot: $0.35 for structural, $0.45 for slab and $0.45 for high flow ESFR sprinklers.

The demand for greater clear heights is spurred by fulfillment centers handling consumer products, retailers and especially e-commerce tenants. These users carefully research efficiencies in logistics and value the savings associated with the additional cubic space. In return, the developer benefits from the increased cost by attracting larger, more sophisticated tenants that offer financial strength and increased certainty of performance throughout the lease, and charging higher rents on a per square foot basis to take advantage of the cubic space.

KEY POINTS:
  • New construction warehouses can feature up to 40-foot ceiling heights: The increased ceiling height, if implemented correctly, allows for more product storage in the warehouse without sacrificing efficiency.
  • Raising the ceiling doesn’t increase efficiency in and of itself: Warehouses need to be equipped with the right layout and equipment to maximize utility.
  • E-commerce is a force for change: E-commerce is a force for change.