A working definition of small-bay industrial, the tenants it serves, and the structural reasons its fundamentals have diverged from the broader industrial market.
Industrial real estate is often discussed as a single asset class. It is not. A 900,000 square foot distribution centre leased to a national logistics operator and a 40,000 square foot building divided into fifteen units occupied by contractors share a zoning category and very little else.
A working definition
Industry research generally uses building size as the dividing line. CBRE defines shallow-bay industrial as buildings under 50,000 square feet with clear heights between 14 and 28 feet. Other researchers use light industrial for properties under 150,000 square feet.
Within those buildings, the unit is what matters. Flex Warehouse Park focuses on properties divided into units of roughly 1,000 to 5,000 square feet — the size a local operating business can actually use and afford.
Who occupies it
The tenant base is not a supply chain. It is a cross-section of the local economy:
- Contractors and specialty trades — electrical, plumbing, HVAC, roofing, glazing
- Landscaping, cleaning and field service companies
- Small distributors and wholesalers
- E-commerce sellers who have outgrown residential space
- Light manufacturers, fabricators and makers
- Auto, fleet and equipment services
What they have in common is a requirement that self storage cannot meet and that a conventional warehouse over-serves: a roll-up door, adequate power, a modest office, secure parking, and a legitimate business address.
Why the fundamentals have diverged
Three structural features separate this segment from big-box industrial.
The stock is old. According to CBRE, nearly half of shallow-bay inventory was built prior to 1980 and more than 80% before 2000. Properties built since 2010 account for only 5% of total inventory.
New supply is scarce. Development over the past cycle has been concentrated in big-box facilities, with relatively little construction of buildings under 50,000 square feet. Corebridge Financial put roughly 90 million square feet of small-bay space under construction nationwide — about 0.5% of existing stock.
Occupancy has held. CBRE reports that shallow-bay vacancy fell below the overall industrial vacancy rate in 2017, and by early 2024 sat 2.5 percentage points below it. Corebridge reports vacancy of 4.8% for properties under 150,000 square feet, with vacancy in assets over that threshold running nearly double.
What this does and does not mean
Favourable structural conditions are not a forecast. Supply constraints can ease, local economies soften, and an asset bought at the wrong basis will disappoint regardless of segment tailwinds.
What the data supports is narrower and, we think, more useful: small-bay industrial is a distinct segment with its own supply and demand dynamics, and it has been under-represented in institutional portfolios relative to its share of transaction activity. That is the gap the platform is built to address.
Sources: CBRE, “Shallow-Bay Industrial Availability Remains Tight Amid Strong Demand,” March 24, 2026. Corebridge Financial, “Light Industrial Outlook: Small Bay, Big Play,” June 2025.