Key Takeaways:

Strong and growing flex space demand:

This trend is driven by e-commerce growth (like Amazon’s logistics), changes in urban development, and insufficient new supply of small bay industrial spaces.

Developer focus on larger projects leads to small space shortages:

Most new construction is for big warehousing, leaving limited availability of flexible, smaller units, especially near urban cores where older small bays are repurposed or demolished.

Versatility attracts diverse tenants and businesses:

Flex spaces serve trades, startups, studios, recreation, and more, allowing owners to backfill vacancies easily and appeal to multiple industries.

Careful tenant vetting is essential:

Owners are advised to request years of tax returns and financial statements and can set stricter requirements due to few regulatory limits (unlike residential leasing).

Phase new builds and use broker expertise to test demand:

Start with smaller construction phases and consult local brokers to gauge real market demand before committing to larger developments, minimizing financial risk.