You've seen it on marketing brochures before - 28', 32', 18' clear height - but what does that mean?

In warehousing and logistics, optimizing storage space is a crucial factor in achieving operational efficiency. Among various factors that influence a warehouse's capacity, the clear height stands out as a key consideration. Clear height refers to the vertical distance between the warehouse floor and the lowest overhead obstruction, such as beams or pipes. 

Why Clear Heights Matter: Clear heights play a pivotal role in determining a warehouse's storage capacity, safety, and flexibility. Here are a few reasons why clear heights are crucial:

1. Increased Storage Capacity: Higher clear heights enable the efficient utilization of vertical space, allowing for additional racking levels and maximizing the number of pallets or storage units that can be accommodated. This is especially beneficial for warehouses dealing with high-density or fast-moving goods.
2. Flexibility for Different Products: Warehouses often handle a diverse range of products with varying sizes and packaging. By incorporating greater clear heights, businesses can adapt their storage solutions to accommodate products of different dimensions, including oversized or stacked items.
3. Enhanced Safety Measures: Adequate clear heights are essential for the safe movement of personnel, equipment, and forklifts within the warehouse. Sufficient vertical clearance minimizes the risk of accidents, collisions, and damage to both goods and infrastructure.

Examples of Clear Heights: Warehouse buildings come in various sizes and dimensions, with clear heights ranging from 18 feet to 40 feet, depending on the specific requirements of the industry or business. Here are some common examples:

1. 20' Clear Height: This is a standard clear height often found in smaller warehouses or older construction dates. While it offers limited vertical storage space, it can still accommodate two levels of pallet racking, allowing for efficient storage of light to medium-weight goods.
2. 28' Clear Height: With an additional 8 feet of clearance, this clear height allows for three levels of pallet racking. It provides more storage capacity, making it suitable for medium-sized warehouses or those dealing with products of varying sizes.
3. 32' Clear Height: A clear height of 32 feet offers four levels of pallet racking and provides significantly more vertical storage space. This clear height is preferred by many businesses involved in e-commerce, distribution centers, and high-density storage operations.
4. 36' Clear Height: Warehouses with a 36-foot clear height offer five levels of pallet racking, making them suitable for large-scale operations, automated storage systems, and industries with high vertical storage requirements.
5. 40' Clear Height: This is the highest clear height commonly seen in warehouses. With six levels of pallet racking, it caters to businesses that handle large volumes of goods, particularly in industries such as automotive, aerospace, or heavy machinery storage.

The increase in clear height directly impacts the storage volume capacity of a warehouse. Here are the approximate percentage differences in storage volume between the aforementioned clear heights:

• 20' Clear Height: Baseline
• 28' Clear Height: 40% increase in storage volume compared to 20' clear height.
• 32' Clear Height: 90% increase in storage volume compared to 20' clear height.
• 36' Clear Height: 140% increase in storage volume compared to 20' clear height.
• 40' Clear Height: 200% increase in storage volume compared to 20' clear height.

These percentages are approximate and can vary depending on the specific layout, racking systems, and other factors present in a warehouse.

Clear heights are a critical consideration for warehouse buildings, as they directly impact storage capacity, flexibility, and safety. By choosing the appropriate clear height, businesses can optimize their storage space and accommodate a wider range of products efficiently. The examples provided demonstrate the storage volume differences associated with various clear heights, highlighting the significant benefits that higher clear heights offer in terms of maximizing warehouse efficiency and capacity.

If you need help determining which clear height makes the most sense for your operation or laying out your racking - contact us today, we have the network of experts to help you.

1. What is it?

A Sale Leaseback is a term for a transaction that involves a building owner that is also the operating business in the facility. After the sale is completed the operating business continues to occupy the building during a specified lease period. Here's an example:

Holding Company A owns 123 Main Street which is occupied by Operating Company A (which is also owned by Holding Company A). Holding Company A sells the building to Value Add Investor and agrees to lease the space for a 1 year period after the sale closes at an agreed upon rate.

2. Why would an owner user do this?

An owner user would consider this option when they hold significant equity in a property and are at the tail end of the life cycle of their operating business. This allows them to realize the gains from their equity while also giving them a wind down time for shutting down or relocating the business. Another reason could be the owner preparing for retirement.

3. Who would buy this?

There are many types of investors that are interested in Sale Leaseback transactions. A Value Add investor would look to have a shorter term lease back (12 months or less) and would hope to increase the value of the property through a new lease after the leaseback term expires.

Another type of investor may look to a sale leaseback in order to acquire a cash flowing asset with a known occupant. This reduces their vacancy risk until it is time to renew or re-tenant the building.

​4. How can I find out more?

Contact us! We have been involved in Sale Leasebacks and understand the delicate transition of going from building owner to tenant as well as critical communication when stepping in as the new owner of a leased back building.