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Real Estate Reporter
July 23, 2015
The man who inspired the idea for Flexe, a warehouse sharing marketplace, was also its first customer.
Dhruv Agarwal is CEO of True Fabrications, which designs and sells wine accessories wholesale. His company is growing and gets very busy during the holidays. Sometimes the warehouse in Kent is full to the brim and Agarwal needs more.
Agarwal has a multi-year lease for his warehouse, but it is always hard to project how much space he'll need in the future.
Looking around at warehouses nearby, he felt there was plenty of extra storage space that could be used temporarily, but there was no way to access it.
True Fabrications needed more storage during the 2013 holiday season, and Agarwal relayed his frustration to a few friends. Then an idea popped into their heads.
About 18 months ago Karl Siebrecht, Francis Duong and Edmond Yue started Flexe in Siebrecht's basement. It's a software program that connects warehouse owners who have extra space with businesses that need a place to store goods.
Warehouse owners list available space on the site and how much they charge per pallet for storage and labor. Flexe adds a fee on top of the price.
Businesses can search by location and prices for different types of storage. They can request to book a space, and the warehouse owner can accept or decline.
Flexe starts with making the initial match, and it has systems for billing, scheduling, delivering and tracking inventory.
Siebrecht said Flexe is good for businesses whose need for space fluctuates.
“A lot of our customers use us on both sides of the equation,” Siebrecht said. “One part of the year they have extra space, one part of the year they need extra space.”
Siebrecht said there are many examples of organizations that are specifically designed to facilitate transactions, such as the New York Stock Exchange and eBay. In designing Flexe they also looked at successful “sharing economy” companies like Uber and Airbnb.
But he said Flexe differs from these services because they connect businesses with consumers, while Flexe is designed to create a working relationship between businesses.
Siebrecht also compared his company to Amazon Web Services. Before the cloud-services platform came about, companies had to buy their own servers, and rent space for data centers with enough cooling and power. AWS lets businesses rent server capacity when they need it.
Flexe is growing quickly. It started with the three founders, and now it has 15 full- and part-time employees. They moved out of Siebrecht's basement and into an open office space in Pioneer Square.
Flexe started in Seattle, and then expanded into Los Angeles. Now Flexe has more than 80 warehouse “partners” in 30 markets in the U.S. and Canada.
Siebrecht has been in Seattle since 1999. He was president of the technology division for the online advertising company aQuantive, which was eventually purchased by Microsoft. In that job, Siebrecht learned how to build a marketplace where companies could interact, experience he would use when planning Flexe.
Duong and Yue co-founded Ignition Mobile, a mobile analytics business. They also both worked at Microsoft and applied their software engineering expertise to build Flexe.
In addition to connecting businesses with warehouse space, Flexe seeks to put all the important details — billing, deliveries and tracking — in one place.
“Some people have space, and some people need space,” Siebrecht said. “How do you make it easy for them to transact with each other?”
Apartments also tight outside Seattle
Apartment vacancy rates in Pierce, Thurston and Kitsap counties are at all-time lows, and rents continue to climb.
A report from Tom Cain's Apartment Insights Washington shows the vacancy rate in the three counties, excluding new properties still filling up, is 3.79 percent, the lowest figure since Cain began studying Pierce County in 2007, and Kitsap and Thurston counties in 2009.
Last quarter, vacancy was 4.37 percent, and a year ago it was 4.81 percent.
The vacancy for all properties, including new ones, is 4.38 percent, down from 5 percent last quarter.
Rents across the three counties rose 3.3 percent this quarter and 6.3 percent over the past year. The average rent in the three counties is $961 or $1.11 per square foot.
Kitsap is the most expensive of the three counties, averaging $1,009 or $1.18 per square foot.
Rents are up almost 10 percent this quarter in two markets: Gig Harbor and Poulsbo/Bainbridge Island. Everywhere else, Cain reports, rents rose less than six percent this quarter.
Falling vacancy and rising rents have not led to a lot of new construction. Cain reports there are only 940 units under construction in the three counties, most of them in Pierce County. A total of 1,282 units have made it through design review and another 2,507 units are in early planning stages.
Cain said the low levels of construction are not a threat to the market, He predicts 2015 will continue to be a good year for property owners in the three counties.
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