Sometimes Companies Find They Have Too Much Inventory. Here’s Where They Can Go.

There has been a lot written about the way COVID-19 has disrupted the supply chain. But the issue isn’t just about an undersupply of products and materials.

“There are companies that have way more goods than they can store,” says Brad Wright, CEO and founder of Chunker. “Then there are companies on the other side of the market that have ended up with a lot of extra space that they weren’t planning on having. So the pandemic really made people think outside the box to look for other solutions.”

That has sent companies to platforms like Chunker, which creates a marketplace for short-term on-demand warehousing.

“What happens with the ebb and flow of commerce is that many, many times, companies will end up with extra space that they’ve leased on a long-term basis,” Wright says. “And historically, they had no way to turn that into cash.”

But a variety of companies need extra space. For example, Wright says Chunker did a deal with a “high-profile retailer” that needed 18,000 square feet of space for two months to store empty plastic totes. Wright says that the typical stay in space leased through Chunker is between two to three and six to nine months on average. Usually, these tenants require between 15,000 and 20,000 square feet.

“We’ve also done, on the very low end of the spectrum, meaning for a couple of days, a movie shoot,” Wright says. “Then we’ve done deals for the 5G rollout, where they’re doing projects across the country and need a warehouse for six to nine months while they’re building out this 5G infrastructure.”

Commercial real estate companies have also rented out space for remodels. “They’ve always had this problem,” Wright says. “They plan out these remodels, but then they have to go to the market and start calling brokers and landlords and beating the streets to try to find some space. Because of the difficulty in doing short-term deals, they find it very, very hard.”

Wright says Chunker recently inked a deal with a “massive” company for a remodel. “They couldn’t find a space for six months until they found Chunker,” Wright says. “They did the deal and moved in the next week.”

Wright says most of the space listed on his platform comes from tenants, not landlords. “The largest number of people listing their space are tenants that have long-term leases,” he says. “We do have landlords and we do have brokers. But, if you really think about the commercial real estate market and the industrial market nationwide, there is maybe 5% vacancy.”

Wright says that the landlord only controls around 5% of the space on the market.

“The other 95% is controlled by the tenants and the other people with the actual supply and demand problems,” Wright says.