What is Clear Height in Commercial Real Estate?
In industrial real estate, a property's clear height is the height to which product can safely be stored on racking. Clear height can also be defined as the height of a building from the floor to the bottom of the lowest hanging item on the ceiling (i.e. sprinklers, lights, etc.). In recent years, clear height has become much more important due to the increase in online retailers, many of whom are trying to increase warehouse efficiency in any way possible.
Typical Clear Heights Have Increased Over Time
While clear heights under 20 feet used to be commonplace, today, demand for increased warehouse volume is soaring. As a result, many industrial tenants are now requesting clear heights of 36 feet. Experts suggest that tenants can increase the capacity of a warehouse by 10-25% simply by increasing a building's clear height from 32 feet to 36 feet.
This may be especially important to note for investors and developers looking into building industrial real estate. With just a small increase in clear height, developers may be able to get significantly more rent for only a small increase in construction costs. However, taller warehouses are typically more in demand in larger metropolitan areas and industrial centers where space is at a premium, and are therefore most likely to garner higher rents in these areas.