WALNUT CREEK, CA—As retail rates in suburban downtowns become more expensive, valuable showcase space used as storage is being reconsidered. As a result, retailers are renting space in storage facilities. Also, some upscale cities are becoming open to having public storage units closer to downtowns, whereas in the past, this use was relocated to the outer city limits. In these situations, some of these buildings are upgrading the facades of buildings and even putting retail uses on the ground floor, GlobeSt.com learns in this exclusive with Transwestern and Rutan & Tucker experts.

“In those hot downtowns, $70 NNN high rentals don't allow space for back-end/just in time storage,” Edward Del Beccaro, senior managing director of Transwestern, tells GlobeSt.com. “With an increase of retail in suburban/urban nodes, it makes sense to increase storage there. Most cities don't want to waste valuable space but they are re-evaluating uses to create or free up sales tax-generating showroom space.”

This trend is taking hold in Walnut Creek, Palo Alto, Pleasanton and San Rafael, for example. Another creative storage concept is mixed use or thin retail with storage in the back.