Multistory Warehouses Draw Investors and Developers Despite Challenges

Photo: Portal Warehousing

Multistory industrial is gaining traction in dense, last-mile markets as e-commerce pushes faster delivery and urban logistics move closer to consumers. The story opens at Brooklyn’s seven-story Whale Building, where Portal Warehousing is preparing upper floors for “maker” businesses, and broadens to a national look at how tight land supply, proximity to population centers, and delivery speed are shifting the economics in favor of vertical warehouse formats.

Developers and landlords point to a growing (if still niche) pipeline: JLL counts roughly 9.4 million square feet of last-mile logistics under construction or planned in New York City alone, with five multistory warehouses already operating and five more underway. Prologis cites its three-level Georgetown Crossroads in Seattle as the first U.S. multistory logistics facility, with additional multistory projects in Miami and San Francisco, illustrating how constrained urban markets are incubating the model.

Skeptics remain, noting higher construction costs, complex truck circulation, and that modern single-story boxes with tall clear heights can often deliver cheaper “cube.” EQT Exeter’s leadership argues multistory rarely pencils outside special cases. Still, brokers and operators say tenant demand for same-day/next-day delivery and urban adjacency continues to support selective multistory development and adaptive reuse—suggesting vertical logistics will persist as a complementary, market-specific tool rather than a universal replacement.