By Cody Payne
For decades, self-storage has been one of the most operationally efficient and resilient sectors in commercial real estate. The model is simple, scalable and built around flexible units that serve a wide range of customers. The same holds true for RV and boat storage. Operators understand the importance of local demand, efficient management and the power of dividing space into smaller rentable units.
What many investors and developers are now discovering is that another sector operates under remarkably similar principles: small bay industrial, often referred to as flex space.
Across the United States, small bay industrial has quietly become one of the most sought-after asset classes in commercial real estate. While large logistics warehouses have
dominated headlines over the past decade, smaller multi-tenant industrial spaces have been experiencing strong demand driven by local businesses, contractors, e-commerce operators and service providers.
For many storage owners, the operational model behind small bay industrial feels familiar; it also seems like the perfect complement to traditional storage and RV/boat storage operators alike.
“There’s a growing number of self-storage investors entering the small bay industrial space,” said Cody Payne, Founder of Flex Parks USA. “While the asset classes share operational DNA, flex space requires a different approach. Understanding how businesses use the space, what amenities they need, how to offer the most optimal suite size correctly, and how to design a park around local demand can ultimately determine whether a project succeeds.”
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Similar Operational DNA
At its core, small bay industrial functions much like self-storage and RV/boat storage in several ways. Both asset classes rely on multiple smaller units rather than a single tenant occupying the entire building. They serve a diverse tenant base, rely heavily on local market demand, and allow operators to scale portfolios through repeatable building designs and management strategies.
Both sectors benefit from:
- Multi-tenant unit structures
- Flexible leasing models
- Strong local demand drivers
- Scalable portfolio growth
- Operational efficiency through standardized units
The key difference is the tenant profile. Instead of individuals storing personal belongings, small bay industrial tenants are typically small businesses that require a combination of warehouse, workspace and light office functionality.
These tenants include contractors, electricians, plumbers, HVAC companies, e-commerce operators, service providers and small manufacturers. In many ways, small bay industrial and flex space serves as the physical infrastructure for local entrepreneurship and service economies.
Demand Is Being Driven by Local Business Growth
One of the reasons small bay industrial has gained momentum in recent years is the structural shift toward smaller, more flexible business operations.
Large distribution warehouses support national supply chains, but thousands of smaller businesses require space that allows them to store equipment, stage inventory, manage service fleets and operate locally.
These users typically need spaces ranging from 1,000 to 5,000 square feet—sizes that traditional industrial developments historically overlooked.
As a result, small bay industrial parks have emerged as the solution for these businesses, providing flexible units that combine warehouse space, overhead doors and office functionality in one environment.
Where Self-Storage and RV/Boat Storage Operators Have an Advantage
Self-storage operators often possess a natural advantage when evaluating or operating small bay industrial assets.
Many of the operational principles are already familiar:
- Managing multiple tenants within a single property
• Understanding unit economics and turnover
• Leasing to local users rather than national corporations
• Monitoring occupancy trends and market demand
• Operating highly efficient, repeatable real estate models
Because of this operational overlap, many real estate professionals see small bay industrial as a complementary asset class to storage portfolios.
Understanding the Differences
While the operational similarities between self-storage and small bay industrial are significant, there are also important differences that can determine whether a project succeeds or struggles.
One of the most important distinctions is the tenant base. Self-storage facilities typically serve individuals storing personal belongings, while small bay industrial parks serve business operators. These tenants have very different needs and expectations when selecting space.
Attracting business tenants requires a deeper understanding of the local economy and the industries that operate within a market. Contractors, service companies, light manufacturers and e-commerce operators all have different operational requirements. Successful small bay projects often align their design and suite mix with the dominant economic drivers of the surrounding area.
Unit size is another key factor. In some markets, demand may lean toward smaller suites
around 1,000 to 1,500 square feet, while in other areas businesses may prefer larger 3,000 to 5,000 square foot spaces. Understanding the right unit mix can have a major impact on lease velocity and long-term occupancy.
Amenities and functionality also play a critical role. Elements such as overhead doors, clear heights, office build-outs, storage yards, parking, and accessibility for service vehicles can significantly influence tenant demand. A project designed without these considerations may struggle to attract the right users.
Because of these variables, designing and developing a small bay industrial park requires careful analysis of local business demand, economic drivers, and market supply. The most successful developments are tailored to the specific characteristics of the market rather than relying on a one-size-fits-all approach.
For investors entering the sector, understanding these nuances can make the difference between an average project and a highly successful one.
A Sector Historically Lacking Data
Despite strong fundamentals, small bay industrial historically suffered from one major challenge: fragmented market data.
Comparable sales were often inconsistent, research coverage was limited, and underwriting models varied widely between markets. This lack of transparency slowed institutional participation for years.
Today, that is beginning to change as more brokerage groups and technology platforms focus specifically on the sector.
Firms such as Flex Parks USA and Small Bay Feasibility have played a major role in advancing market visibility for small bay industrial. The firm specializes exclusively in the acquisition, sale and analysis of multi-tenant industrial parks across the United States and has completed more than 1,000 commercial real estate transactions in the sector.
New analytical tools are also helping investors better understand where small bay projects can succeed. Platforms such as Small Bay Feasibility allow developers and investors to evaluate markets, demographics, business metrics, local and future competition and site conditions before committing capital.
These types of tools are bringing greater structure and transparency to a sector that historically operated with limited data.
The Opportunity Ahead
Small bay industrial remains one of the most fragmented segments of commercial real estate, but fragmentation often signals opportunity.
As awareness of the sector grows, investors and developers with experience in operational real estate models—particularly self-storage operators—may find themselves uniquely positioned to participate in this expanding market.
The same principles that made self-storage one of the most successful real estate asset classes of the past several decades—efficient unit structures, scalable portfolios and strong local demand—are increasingly driving the growth of small bay industrial.
For many operators exploring new opportunities, small bay industrial may represent a natural evolution—one that builds on familiar operational foundations while serving the growing demand from small businesses across the country.
Cody Payne is the Founder and Managing Partner of Flex Parks USA, a national brokerage, advisory and platform exclusively focused on small-bay flex industrial real estate. With more than 20 years of experience and 1,000+ closed commercial real estate transactions, he is widely recognized as one of the leading authorities in the small-bay flex and multi-tenant industrial sector across the United States. Through Flex Parks USA,
Cody has built a specialized ecosystem designed to serve investors, developers and owners of flex space — combining brokerage, proprietary data, feasibility analysis and a nationwide buyer network to drive superior outcomes. His platform-centric approach has helped redefine how small-bay industrial assets are evaluated, marketed and transacted, creating clarity and confidence for both seasoned investors and first-time developers.
Toy Storage Nation proudly recognizes Flex Parks USA as a Silver Sponsor of the TSN Storage Redefined Masterclass, April 10 in Las Vegas. Hosted in partnership with ISS World Expo, the Masterclass features Flex Parks USA Founder and Managing Partner Cody Payne, who will lead an interactive roundtable discussion.
