How Canada’s First Cowarehousing Space is Growing by Adapting
When starting a business, companies start from where they can, and sometimes that means working from a garage, a basement or a kitchen table. That’s where TradeSpace, a cowarehousing and coworking operator with three locations in Calgary, comes in. By offering a coworking model for mostly e-commerce and industrial tenants, it aims to provide shared warehouse and office facilities for all types of businesses.
TradeSpace is the brainchild of Jordan Tetreau and Daniel Delgado, who met at a construction industry event in 2016. At the time, they were both running their businesses in separate workspaces. “At one point, we decided that it would make sense for us to create our own shared workspace that’s catering a little more to the construction industry,” said Tetreau.
Tetreau and Delgado proceeded to talk to people in their circles to see if they wanted to share space with them to keep the costs low and foster a collaborative environment, and that’s how TradeSpace was born.
Besides being a co-founder of TradeSpace, Tetreau still runs a general contracting firm, MINT Projects, and Delgado owns a mechanical and electrical engineering firm, Enginectra.
“One of the greatest assets of our team is our collective knowledge in the construction industry,” said Tetreau. With their complimentary engineering and construction skills, they are able to unlock potential in real estate assets cost-effectively.
A Built-in Support Network
TradeSpace offers an alternative to the self-storage facilities from which many businesses operate. While convenient, those spaces lack essential resources, according to Tetreau.
“Many members that have come to TradeSpace and used to operate out of a basement or a self-storage facility really like the [lease] flexibility, the service, and the support that they get from being part of the community,” he said. “Not to mention there’s a vibrancy in each of our buildings and it’s created by the members and the activities that they’re doing.”
Unlike in a typical coworking office, where most work is done hunched over computers, in a cowarehousing space, all aspects of business activity are on full display. “When you walk around the space, you hear equipment working and the forklift beeping, and you can see some of that production and activity that you just don’t get in an office environment,” added Tetreau.
The communal environment spurs innovation and helps people overcome challenges, according to Tetreau. “It gives a support network for what can be a lonely business. It is really valued by our members, that they have a built-in social network.”
Through interactions, many members were able to branch out and work together, with some businesses contracting others. “There is all sort of different cross-pollination happening in the community as a result,” said Tetreau.
Starting and Expanding the Cowarehousing Business
TradeSpace was launched in 2018 in a small 10,000-square-foot (929 square meters) location where Tetreau and Delgado could meet, share resources and store tools and construction materials.
“There were people who believed in what we were doing, so they stuck with us, and it grew from there,” said Tetreau. “We still have some of those members today that were with us from the beginning.”
Tenants at TradeSpace vary in range and products, from a TikTok-powered sweatshirt business to a frozen meat subscription service. When TradeSpace initially launched, they thought that their members would be mostly people in the construction industry, in trades and services, yet these professionals now make up about a third of the members that they have in their space. The other large segment in their community is e-commerce.
After eight months at their initial location, the team outgrew their space and expanded it to a bigger size, 40,000-square-foot (3716 square meters). “It’s our primary location, supported by two other [locations], for a total of around 140,000 square feet (13 006 square meters),” said Tetreau.
The first expansion and tenant improvements that TradeSpace made at their initial location were paid for through a loan from a local bank. They negotiated terms with the landlord to expand into the building, which allowed them to grow at a pace that suited their business cadence and finances. Since then, TradeSpace has worked with landlords to approve budgets for tenant improvement allowances to make upgrades in their buildings as part of several long-term leases. TradeSpace’s second location opened in January 2020 and the third, in Northeast Calgary, opened in April 2022.
When searching for real estate for their business, Tetreau and Delgado look at the size of the building, the proportion of warehouse to office space and the loading capacity. They also think about nearby amenities, such as food and beverage facilities, public transit, or active transportation access, as some members come to TradeSpace by bus or bicycle.
Tetreau and Delgado thrive well in what the industry would consider “functionally obsolete real estate,” according to Tetreau. He mentioned that things like lower ceilings and limited HVAC systems are not limitations to them.
A Buzz Around the Neighborhood
All three locations that TradeSpace occupied were vacant for at least two years before they moved into them, so there were many benefits for the landlords. “First, we are going to go in and improve the space,” said Tetreau. “We are also creating a bit of vibrancy and a buzz around an asset.” The founders noticed that their headquarters had created enough interest to attract other trendy businesses to their immediate community.
“We are a little bit of a catalyst for improvement of that entire industrial area, but we are also adaptable in terms of real estate, so we were able to unlock a potential for a landlord and this is probably our strongest value proposition,” said Tetreau.
The three TradeSpace locations are all leased under long-term leases of 10 years and more. “It’s almost a partnership with the landlords, in the sense that we’re able to go in and make those improvements and become a user for the space that may not have existed otherwise,” he added. “Every deal structure is a little different based on the needs of the landlord and the types of improvements that the asset requires for occupancy.” TradeSpace has done license deals, gross leases and triple net leases.
Flexible Memberships Are Key
For members, flexibility is the name of the game at TradeSpace, with month-to-month memberships available. “Most small businesses don’t fully understand the structure of a formal lease and some of the obligations that go into those leases, so it can be a bit complicated and cumbersome,” explained Tetreau.
It can be difficult for small businesses to scale if they are locked into a 3-to-5-year lease, according to Tetreau. “It was important from the beginning to have as much flexibility as possible when it comes to memberships, so we do month-to-month memberships and we have some that are on three-year terms. It depends on the needs, but it all comes back to our mission of enabling our members’ full potential.”
Their monthly membership rates range from between 750 and 5,000 Canadian dollars per month. It includes secure portioned warehouse space, office space, loading areas, meeting rooms, coffee stations and more. Additional amenities like forklift service and pick and pack fulfillment are at an extra cost.
In the warehouse area, the TradeSpace team divides the space with movable chain link panels that are custom made to make the space smaller or bigger as needed. “It allows us to be really flexible with our space and to help our members contract or grow as needed when projects come up or when business changes direction,” said Tetreau.
To further help their members, TradeSpace also offers an array of warehousing and logistics services.
“During COVID, one of the opportunities that we identified was to create a filling platform,” explained Tetreau. “We can pick and pack orders for them and handle all of the distribution of their goods.”
TradeSpace was also able to negotiate discounts with carriers and parcel services due to the large volume of packages coming from the many different businesses that operate within the space.
“I think the simplicity of the model for a business is really essential,” said Tetreau. “It allows growing businesses to put the focus on what they know and do well. They are able to leave some of the logistics and services to our team and to leverage those resources.”
To help organize demand, TradeSpace has an app for their members to book the use of a forklift or to reserve a meeting room, for instance. The company wants to add more services in the future, such as bookkeeping and accounting.
Teamwork Makes the Dream Work
As TradeSpace has taken up more space over the years, it has also added members to its team. The business now has a core management team of six individuals, five employees who are focused on community coordination and a team of warehouse employees who help with the forklift services, picking and packing and building the cages and storage areas, among other tasks.
“We have a solid team, and they are really great at putting our members first and solving problems,” Tetreau said.
While Tetreau and Delgado borrowed some knowledge from the office coworking sector, managing the warehouse and the people within it comes with added challenges, especially since the types of uses and goods vary so greatly.
“Because cowarehousing is a fairly new industry, there’s a lot for us to figure out along the way,” said Tetreau. “We had to find very entrepreneurial team members to join us, that are excited to pioneer and figure out how to overcome those challenges and build our playbook here as we grow,” he added.
Besides coworking and cowarehousing space, TradeSpace also provides space for events that members and non-members can rent out.
An Expansion in Western Canada
According to Tetreau, cowarehousing is picking up steam and demand is growing. Although he only learned about other cowarehousing spaces elsewhere long after TradeSpace was launched, he cites the growth of businesses such as Saltbox in the United States as an example of the business model’s success.
“We’ve talked to some other companies and we learned that they started under the same circumstances of just trying to fill a local need and not knowing that other co-warehousing businesses existed,” explained Tetreau.
TradeSpace wants to be in every major market in Canada in the next decade. They are currently looking to expand in Edmonton, Alberta, and Winnipeg, Manitoba, and are actively searching new real estate partners to support their expansion.
And everyone is welcome at TradeSpace. “There is an inherent level of safety and security, and as a result we have a very diverse mix of members with a high proportion of female entrepreneurs operating from the space, and a cross-section of different communities working in our space, so it’s an inclusive community for all types of people and all types of businesses.”