Warehub Founder James Holbrook On Industrial’s Flexibility Needs

U.S. industrial real estate spent much of the pandemic defined by tenants racing to secure as much warehouse space as they could for as long as they could.

Those days are long gone. 

The market has reset and normalized, but occupiers have not gone back entirely to the old playbook. Logistics users are increasingly focused on flexibility, transportation costs, and the ability to adjust without making years-long commitments.

CBRE’s 2026 mid-year industrial outlook reported leasing from third-party logistics (3PL) providers increased 19 percent compared to last year, and 3PLs could account for more than 35 percent of U.S. industrial leasing in 2026. And the report notes that many 3PLs require shorter lease terms, smaller footprints and more flexible space. Separately, CBRE’s latest occupier survey likewise found lease flexibility among the most important building-selection considerations.

Transportation typically accounts for roughly 45 to 70 percent of total logistics costs, compared with only 3 to 6 percent for fixed facility costs such as rent, according to CBRE. That can make leasing another strategically located warehouse — even temporarily — worthwhile if it reduces freight distances and improves delivery times. 

On-demand warehousing itself remains a relatively small portion of industrial real estate, but one recent market study from Mordor Intelligence estimated that storage arrangements of less than one month already represented more than half of the on-demand sector in 2025.

James Holbrook founded Warehub, a platform designed to standardize short-term industrial leases of up to one year, allowing landlords to monetize space between long-term tenants while giving occupiers temporary distribution capacity. Holbrook said the concept grew out of more than 2,500 transactions completed during the platform’s research-and-development phase. And Warehub said it has since onboarded more than 52 million square feet of industrial space nationwide.

Commercial Observer spoke with Holbrook earlier this summer about why industrial tenants increasingly want shorter commitments, how flexible warehouses fit into supply-chain networks, the opportunity created by excess vacancy, and whether short-term leasing is a response to the current cycle or a lasting change in industrial real estate.

This conversation has been edited for length and clarity.

Commercial Observer: You completed more than 2,500 short-term industrial leases while developing Warehub. What changes are you seeing in demand, and what is driving them?

James Holbrook: The 2,500-plus industrial leases we closed were really part of our corporate R&D for developing the Warehub platform. Warehub was engineered to address the constraints modern commerce faces within the static infrastructure of traditional industrial real estate.

Industrial real estate was built around long-term leases. But 50 to 70 percent of a company’s total logistics spend is typically attributable to transportation. We’re seeing increased demand for shorter-term space because of e-commerce acceleration, tariff instability and seasonal compression.

Landlords generally want long-term leases for entire bays, while tenants increasingly want more adaptive geographic placement of their infrastructure. If tenants can create regional distribution nodes on top of their existing networks, they can compress delivery distances, reduce freight costs, and respond faster to inventory needs. That mismatch is really the friction we’re trying to solve.

How does short-term space fit into a traditional hub-and-spoke distribution network?

During seasonal surges, for example, a tenant can temporarily disperse inventory closer to its customers rather than moving everything through the same fixed facilities. That can help stabilize transportation costs while supporting sales and replenishment.

Warehub creates a structured leasing environment around that. Tenant requirements feed the supply side, so landlords can see where active demand exists and make space available when the timing works without disrupting their long-term leasing strategy. 

We’re trying to align the incentives of both parties.

What types of tenants have historically used this space?

We’re just going to market with Warehub, so I can’t disclose the tenants involved in the earlier brokerage transactions because of confidentiality agreements. But during the R&D period, we completed roughly 2,500 transactions in virtually every part of the U.S.

That experience was essentially our due diligence. We needed to understand not only tenant incentives, but also those of landlords, lenders and risk managers. We used that experience to build a standardized system designed to remove friction from the negotiation process.

Where are you seeing the most demand?

Our initial pre-committed demand is fairly scattered. We’re seeing it across the Northeast and Southeast, along with pockets in Texas and California.

A lot of it comes down to companies needing additional regional capacity. They may not have enough room in nearby facilities to handle a seasonal surge, and temporary space gives them another way to address that without permanently expanding the network.

How have industrial landlords responded to the idea?

Landlords have a vacancy problem right now. During COVID, there was an enormous absorption of industrial space, which triggered an expansionary development cycle. But development has a lag between entitlement and completion, and, by the time some of that space delivered, that extraordinary level of demand had disappeared.

That left a vacancy gap that the market is still working through. I think creating infrastructure that allows tenants to move more dynamically can make the existing building stock more efficient.

What size spaces can be offered through Warehub?

We have everything from roughly 1,500 square feet to about 1.5 million square feet.

We’re not trying to define this as exclusively small-bay or large-bay leasing. The leases can run for up to a year, with the possibility of renewal, and are designed to adapt to what both the landlord and tenant need.

Even in relatively tight markets, a traditional lease can take around three months from identifying a tenant to actually executing the deal. That creates an opportunity to fill that gap with another user that needs space temporarily. Or a tenant can occupy immediately through Warehub and potentially negotiate a conventional long-term deal afterward.

And the appeal for landlords is essentially turning otherwise vacant time into income?

Exactly. It improves net operating income, which can increase the internal rate of return for their investors.

Do you view short-term industrial leasing as primarily a response to this point in the market cycle, or as a permanent change?

I think this is permanent. I think this is how modern commerce works.

We’re not going to shift back entirely to rigid infrastructure because transportation costs, transportation distances and consumer expectations aren’t going away. There will always be uncertainty in the marketplace. Tenants will always face time compression and risk.

Customers aren’t going to suddenly say, “We’ll wait longer.” The underlying supply-chain issue isn’t temporary. What was missing was an operating system that allowed this kind of dynamic infrastructure to function across the market.

How much did tariff uncertainty help accelerate demand for this model?

It certainly helped. But tariffs are one example of a broader issue.

There are always changes in geopolitics, weather, procurement and other factors that create disruptions companies need to adjust to. If you can bring inventory onshore at a known price, you know your cost basis. But the broader idea is to create stable infrastructure that allows companies to adjust regardless of what the disruption happens to be — political, environmental or otherwise.

On 3PL demand: How significant have overseas logistics providers become?

Nationally, Prologis reported that Asian-based 3PLs, primarily Chinese operators, accounted for nearly 20 percent of new U.S. industrial leasing that year. That illustrates the larger trend: More companies are using outsourced logistics capacity and looking for flexible ways to position inventory.

What else about the platform do you think is important for the industrial market to understand?

One thing is speed. We can take what traditionally might be a 12-week leasing process and potentially complete it in a day.

That matters for tenants, but it also matters for brokers. Warehub pays tenant brokers the same way they would typically be paid in the market. We’re not trying to alienate any of the parties involved.

Gregory Cornfield can be reached at gcornfield@commercialobserver.com.