What Investors Want to Know: How Warehouse Exchange Is Becoming the Airbnb for Warehousing

Warehouse Exchange is the Airbnb of warehousing and is the only marketplace in the world that allows owners of unused space to transact with renters who need temporary facilities. In the U.S. alone, more than 14 billion square feet of warehouse space goes unused every day while thousands of renters are forced to commit to costly long-term building leases or 3rd Party Logistics (3PLs) providers who prohibit renters from working in the building. Traditional real estate brokers have ignored this “On-Demand” market because standard commissions are too small to justify the human intervention to complete a transaction. Until now. Warehouse Exchange uses advanced AI computing algorithms to match owners with customers instantly, seamlessly, and with minimal human capital. Warehouse Exchange is highly scalable and has grown its inventory by over 800% in the past 3 years, now with 850 warehouses.

I have been a serial entrepreneur operating exclusively in the logistics space since 1983. In 2012 I acquired a small warehouse business and over 10-years, grew the business to 11 distribution centers and 5.5M square feet of space with 1,500 employees, eventually selling it to NYK Shipping for more than 13x what I had invested. We would get dozens of calls from customers in need of temporary space, often wanting to perform their own packaging, light assembly work, or other on-site tasks. Like most 3PLs we had dozens of customers in each building, with inventory stored in open racks, with inventory being exclusively handled only by our employees. We searched for alternatives we could direct inquires to, but there were none. So we created Warehouse Exchange. While we knew there was voracious demand, we were surprised by how many building owners were willing to rent unused portions of their buildings to generate new revenue. We know that owners never have the right amount of space. You always have too much until you have too little.

I was confident that we had deep expertise in the warehousing business. What we needed was “marketplace” technology expertise. We were very fortunate to attract a proven marketplace pioneer, Grant Langston who as CEO successfully built eHarmony, one of the largest on-line dating marketplaces in the world. And subsequently attracted James Cabral, a successful entrepreneur with deep digital marketing expertise.

The alternative for customers is (1) lease a building, requiring a commitment of 3-5 years, substantial credit quality, and a capital commitment for tenant improvements and material handling equipment like racking and forklifts. Or (2) contract with a 3PL who will store, prepare, and distribute your inventory. But 3PLs are in the business of selling labor and prohibit customers from entering the building unescorted since inventory is commingled amongst other customers. And (3) Public Storage is simply not designed for commercial use since they rarely have container docks, and prohibit working in the space. Warehouse Exchange is different. Customers have safe, secure, partitioned space that can be rented for as little as 3-months. This is truly “on-demand”. No fancy contracts, personal guarantees, or protracted negotiations. It’s highly flexible, and customers are willing to pay a premium for this unique product. Book on-line in a matter of minutes and move in that same day.

Now that we have proven the concept and accumulated enough space across 36 markets to disrupt the market, we will spend new capital on digital marketing to educate customers that this option exists, and continuing to perfect our customer matching Ai and machine learning capabilities, allowing massive scaling to rapidly dominate the on-demand market.

We hope to double the amount of space to 36 million square feet and substantially increase our utilization rate while driving down the amount of human intervention required to finalize a transaction. We are confident that a vast majority of the business can be conducted using Ai thereby increasing our scalability and driving down our cost per transaction.