From Man‑Caves to Shallow‑Bay Industrial: How Warehouse Condos Became the Next Big Flex‑Warehouse Asset Class

That wave of micro‑demand is spilling over into the development world as shallow‑bay warehouse‑condo campuses of roughly 100 K SF. Vacancy for these smaller footprints is already below 4 % nationwide, roughly half the availability of traditional big‑box space (Cushman & Wakefield Industrial MarketBeat Q1 2025). For developers and brokers, the message is clear: deliver the right‑sized product and you’ll lease or sell faster, at stronger numbers, with less risk.

This article unpacks the data, design logic, and investment upside behind the trend—culminating with a boots‑on‑the‑ground case study that proves shallow‑bay condos don’t just pencil, they outperform.

Table of Contents

1. Shallow‑Bay Reality Check
2. What Exactly Is a 100 K SF Warehouse‑Condo Campus?
3. Who’s Driving Demand?
4. Site‑Selection Cheatsheet for Developers & Brokers
5. Capital Stack & Phasing Strategy
6. Risk Radar
7. Case Study – GearBox Commons (Dallas Fort Worth, 2024)
8. Key Take‑Aways
9. Why SCB Construction Group Is Your Ideal Partner

Every market cycle features a “quiet” sub‑sector that suddenly catches fire. In the early 2010s it was cold storage; in the late 2010s, it was last‑mile hubs. Today it’s shallow‑bay industrial—units under 100 K SF—driven by owner‑users who value control over scale. Picture a furniture maker who’s tired of rolling the dice with self‑storage leases, or a motorsport enthusiast who wants something nicer than a dusty mini‑warehouse. They all converge on the same scarce inventory, and the fundamentals are compelling:

• Chronic undersupply. National vacancy for < 100 K SF bays hovers around 4 %, while vacancies for > 250 K SF big‑box stock linger near 10 % (Cushman & Wakefield Industrial MarketBeat Q1 2025).
• E‑commerce fragmentation. The number of Shopify stores increased ≈ 20 % in 2024—a cohort too big for garages but too small for million‑foot DCs. (Chargeflow Shopify Statistics 2025 Mar 2025).
• Capital chasing yield. Sun‑Belt strata sales of 50‑120 K SF projects are experiencing a surge in 2025 (Sun Belt Commercial Real Estate Surge: Top Metro Areas to Watch in 2025, Brevitas).

Combined, these stats paint a picture of pent‑up demand and pricing power that big‑box landlords can only envy.

Think of a campus as industrial home‑ownership for entrepreneurs. Two mirrored steel buildings—each roughly 50 K SF—sit on a gated, amenitized lot. Inside: 30–50 condo units ranging from 2,000 SF “garage lofts” to 8,000 SF dual‑door suites. Owners buy or lease just what they need and share a wash bay, clubhouse, and secured yard maintained by an HOA.

Why does the 100 K SF envelope hit the sweet spot?

1. Site fit. Squeezes onto 6–8 acres inside beltways where land is tight but demand is intense, avoiding the massive land buys big‑box projects require.
2. Cap‑stack friendly. Many regional banks cap individual construction loans at about $15 million; a 100 K SF project stays in that comfort zone.
3. Phasing risk. Pre‑selling or pre‑leasing 30–40 % of units is usually enough to trigger vertical financing, cutting carry costs and lowering downside exposure.

In short, it’s big enough for curb‑appeal amenities yet small enough to finance, build, and market without betting the farm.

Behind every vacancy figure is a human story. SCB’s brokerage partners logged a plethora of inquiries last year; 4 archetypes dominate:

GlobeSt selling-price recap for FL / TX luxury garage condos are currently being reported at around $28–$36 ft² NNN (July 2024).

Choosing the right dirt can be the difference between a 12‑month sell‑out and lingering units. Before you pour slab, make sure these five boxes are ticked:

1. Population radius. A 20‑minute drive‑time must capture at least 400 K residents for labor and consumer base.
2. Land pricing discipline. Industrial parcels under $9 per ft² keep total shell cost near $170 per ft².
3. Zoning & entitlements. Aim for light‑industrial or PD overlays that allow condo plats and limited outdoor storage for trailers/RVs.
4. Infrastructure. 277/480 V power at curb, existing dark‑fiber trunk, and parking ratio ≥ 1.5 stalls/1,000 SF.
5. Amenity potential. Room for a private drive aisle, gated entry, and clubhouse can lift unit sale premiums by $25 per ft² or more.

These criteria aren’t exhaustive, but missing even one can slow absorption or spike infrastructure costs.

Raising and deploying capital quickly is paramount when appetites shift. Below is a sample 100 K SF pro‑forma that many regional lenders have endorsed:

Phase I – 50 K SF / 20 Units

• Hard Cost: $8.1 million | Soft Cost: $1.2 million
• Funding: 65 % loan‑to‑cost construction facility at 7.1 %.
• Equity Release: 40 % pre‑sales (SBA 504 commitments) unlock sponsor equity for vertical.

Phase II – 50 K SF / replicate or mezz‑heavy variant

• Trigger once Phase I reaches 70 % sold/leased.
• Every 5 % uptick in pre‑sales velocity adds roughly 70 basis points to IRR because carry costs evaporate.

The enduring appeal: developers can exit unit‑by‑unit, recap the HOA cashflow, or sell the stabilized campus as a portfolio, giving multiple paths to liquidity.

Even the best concepts falter if blind spots remain unchecked. Lenders and sophisticated buyers will scrutinize these areas:

• HOA reserves & bylaws – under‑funded reserves or vague voting language can depress resale comps.
• Outdoor storage screening – municipalities may balk at visible RVs; screen walls and landscaping keep entitlements smooth.
• Fire & battery hazards – NFPA 13/30 plus EV‑battery guidelines satisfy insurers and reduce operating risk.
• Secondary‑market liquidity – educate local brokers on condo‑industrial so resale valuations stay strong.

Data persuades, but narrative convinces. GearBox Commons turned a speculative idea into a 100 K SF proof point.

Project Snapshot

Campus size | 100 K SF across two PEMB shells
Units | 42 bays ≈ 2.4 K SF; six merged into 5 K SF suites
Envelope | 4-in IMP, PVDF matte finish — tilt-up concrete look without schedule hit
Schedule | 34 weeks dirt-to-CO — beats tilt-up baseline by 13 weeks
Sales velocity | 58 % pre-sold before steel went vertical
Average shell price | $379 per ft² (base build)
Developer IRR | 14.5 % unlevered; 1.85× equity multiple (five-year)

What Made It Work

• Entitlement agility. GBC secured a PD overlay allowing mixed auto‑storage and maker uses in just 90 days.
• Amenity magnet. A 2,800 SF owners’ clubhouse with espresso bar and detail/wash bay created an instant community vibe, supporting a $25 per ft² sale premium.
• Construction choreography. Steel and IMP panel packages were locked six months ahead, hedging against the 2023 steel‑coil price spike.
• User‑mix balance. 45 % maker‑merchants, 30 % auto/RV collectors, 25 % professional trades—spreading HOA risk and diversifying resale comps.

“I thought I was buying a glorified garage. Instead, I got a turnkey workspace with a lounge, wash bay, and enough power for future CNC machines,” noted one vintage‑race‑car owner. Eighteen months post‑CO, resale shells flipped at +22 %, cementing shallow‑bay condos as a durable asset class.

1. < 100 K SF campuses hit the Goldilocks zone—big enough for amenities, small enough for rapid absorption and bank comfort.
2. Mid‑teen IRRs out‑perform many bulk‑warehouse deals, thanks to condo premiums and faster lease‑up.
3. Sub‑10‑month schedules using hybrid PEMB + IMP shorten carry costs and deliver cash flow sooner
4. Strata exit optionality lets developers sell unit‑by‑unit, recap HOA cash flow, or package a fully‑stabilized portfolio for REIT acquisition.

At SCB, our Capabilities, Credibility, Client‑First, Creativity, Community values—and BUILD culture of Boldness, Unity, Integrity, Leadership, Discipline—shape every project. Here’s what that means for shallow‑bay investors:

• Material Price Certainty – In‑house steel‑fab slots and strategic IMP supply lock pricing six months ahead, hedging volatility.
• Entitlement Speed – Condo plats, PD overlays, and fire‑marshal sign‑offs run in parallel, trimming pre‑construction timelines.
• Schedule Compression – BIM‑to‑fab workflows and panelized erection routinely shave 15 weeks off tilt‑up schedules, reaching CO in ± 34 weeks.
• Broker Tool Kit – We deliver stacking plans, VR walk‑throughs, and amenity renderings that help brokers pre‑sell up to 50 % of units before steel rises.

Whether you’re scoping a first‑time shallow‑bay venture or scaling a proven model into a multi‑site portfolio, SCB offers the technical depth and market savvy to de‑risk your build and accelerate returns.