Underground Warehouse Space conversions.

The greater Metropolitan St. Louis, Missouri has a number of underground warehouse developments. These developments typically are occupied by a refrigerated warehousing company that provides freezer warehouse services. Freezer warehouse services are where a pallet of refrigerated or frozen food products is stored on a month-to-month basis, with the handling provided by the refrigerated warehouse company for the other company.

However, underground warehouse for lease can be converted into refrigerated food processing space for lease. The major advantages are a lower than normal build out costs which results in a lower rental rate for food processing areas, either being refrigerated or ambient temperature food production space. Sometimes the rental rate is up to 50% less than the lease rate for above ground facilities. The operating costs associated with occupying food processing space in an underground warehouse facility are also substantially lower because of the insulation value of rock. Above ground facilities have 4 inches of urethane panel installation in its refrigerated processing areas, and underground facilities may have up to 100 feet of rock to provide its insulating values.

 The occupancy costs are lower in underground warehouse space is because of a lower property tax rate. Property taxes are initially based on construction costs of the building, and then in subsequent property tax assessment periods on the market value of the property. Underground warehouse space is more affordable to construct than above ground warehouse space, thus always maintaining a lower property tax structure.

The underground warehouse development has to have the utility inner structure in place for the conversion of warehouse space into food processing space for lease.

Jim Cronin is a refrigerated building real estate broker from St. Louis, Missouri at 314-994-0577 or e-mail J.Cronin@hawkds.com   www.refrigerated-buildings.com