New Elevator co-warehousing community aims to lift e-commerce startups, fill gap in Omaha market
Owners hope to expand the business model into other cities
Emiliano and Shannon Lerda on top of downtown Omaha’s former O’Keefe Elevator headquarters, now being transformed into the Elevator co-warehousing community headquarters. (Cindy Gonzalez/Nebraska Examiner)
OMAHA — Shannon Lerda and her family at times were quite literally up to their ears in boxes, bubble wrap, labels and pet supplies as the pandemic and their online sales accelerated.
The good news was that the materials crowding their personal living space signaled prosperity for their e-commerce startup that allowed Lerda to work from home while her kids were young.
But growing a small business from home had its downsides, too. Among them: professional isolation and the non-existent separation of business and personal life.
“It’s really hard to relax and unwind in a home full of boxes and packaging peanuts,” Lerda said. “Your to-do list is staring you in the face.”
With that experience as a backdrop, she and husband Emiliano Lerda created a business model designed to help similarly situated entrepreneurs whose companies are getting too unwieldy for spare bedrooms and garages, want to stretch further — yet aren’t big enough to afford typical warehouse leases.
Reactivating a century-old warehouse
Their so-called Elevator co-warehousing facility is to open in October at 14th and Jones Streets, reactivating a century-old downtown brick structure that had been on track to become million-dollar condo lofts before the deal fell through.
Different ownership now will lease out the four-story facility to the venture founded by the Lerdas. The Elevator is akin to the nationally popular wave of co-working spaces, except that it’s geared more toward smaller enterprises that sell physical goods and need storage for packing space.
About 55,000 square feet of the 1402 Jones Street building is being divided into 92 individual stations: 75 spots for warehousing tenants and 17 others for more traditional office users.
The Elevator offers a twist beyond rental space: A team of onsite mentors will help tenants hone or scale their startups, arrange extra labor when needed and handle carrier pickups so the business owners have more flexibility with their schedule.
The Lerdas expect the operation to be just the start of more co-warehousing communities they hope to launch in other cities about the size of Omaha.
A $1.7 million capital infusion from Nebraska investors Black Dog Ventures, Nelnet and the Nebraska Angels is covering renovations and setting up the team for growth.
Logistics support and flex space
Black Dog’s Paul Smith said the co-warehousing project helps fill a market gap.
“By providing flexible warehousing and logistics support to e-commerce entrepreneurs in secondary markets, they are adding real value to growing companies,” he said.
The company’s name nods to longtime tenant O’Keefe Elevator, which for decades had its corporate headquarters there. O’Keefe had sold the operation a few years ago to a former supplier, thyssenkrupp, which then moved to Sarpy County.
Originally, the structure was built in 1920 for the Pittsburgh Plate and Glass Company. Extensively renovated in 2001, it contains loading docks, freight elevators, conference rooms and other features that the Lerdas said were a great fit for their vision.
Counting its 45 underground parking stalls, the Elevator building contains more than 75,000 square feet and stands across the street from the future downtown library that’s under renovation.
A recent tour for the Nebraska Examiner showcased amenities that include a conference room, break and lunchroom and flexible storage in a modern, industrial style building.
The Lerdas said the project came together after their LB Brands e-commerce business, which launched in 2018, hit a sales peak during the pandemic’s online shopping boom.
Living room is obstacle course
Emiliano Lerda recalled days he’d return from his day job as president of Paul G Smith Associates and navigate his way through boxes lined up from the living room to the spare bedroom used as an office. As a third-party seller, mostly of chew toys and other pet supplies, LB Brands repackaged and labeled goods from a wholesale distributor and sent them off to an Amazon center.
Big shipments became a family affair, as the Lerdas and their two young sons, Santino and Nicolas, would “camp out” in the living room, sometimes working into the wee morning hours to get an order out in a timely fashion.
They thought about hiring employees, said Shannon. “But how do you hire help to come into your living room?”
After the couple decided to search for space to grow the business, they ran into high costs and dead ends.
Complications arose with a basement and a self-storage unit they considered renting. She loved the camaraderie of an office co-working facility they visited but found it unsuitable for their storage needs.
“We thought, well, there’s co-everything now. What about co-warehousing?” said Emiliano Lerda.
They said they did not find the concept to be widely used, though they did learn of and were encouraged by an initiative similar to Elevator that has expanded to multiple locations including Colorado.
Warehouse space in general has been on an “absolute high-flying ride” since COVID, with competition and lease prices escalating, said Dennis Sciscoe, an industrial and warehousing expert with local Cushman & Wakefield/The Lund Company. For the most part, he said, available warehouse space comes in chunks much larger than that offered at the Elevator.
After viewing more than a dozen prospective properties for their idea, the Lerdas were sold on the O’Keefe building. Investor partners will lease the structure to the co-warehousing business.
Spaces for tenants vary in size, they said, from about 80 square feet for $500 a month to $2,800 for 1,300 square feet. Some spots are larger.
Tenants are offered a month-to-month contract, a support service package and a “community” environment that Shannon, formerly in commercial real estate lending, grew to miss while working from home.
Interest in the project is building, said the Lerdas, who met as college students in Iowa. They moved to Omaha from Des Moines after he accepted an executive director’s job with the Immigrant Legal Center in 2011.
Emiliano Lerda chuckled, saying their research for their new venture has involved visits with other families running home businesses to learn about their pain points. And he believes the co-warehousing concept might indeed be a marriage-saver.
He noted how life at their own Dundee household has changed, now that they’ve wrapped up home-based LB Brands and are focusing on the Elevator.
The Lerdas are now able to park cars in their garage. The former office returned to bedroom status for one of their sons, now ages 10 and 12.
“It was a great way to start. I wouldn’t have changed a thing,” Shannon said of the home business. “Now the opportunity to help others grow and to give back in some way is super exciting.”
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