Selling a Warehouse That's Vacant or About to Be

This page is for owners whose warehouse or industrial building is empty, or soon will be. Maybe a lease is ending, a long-time tenant has given notice, or the owner's own business has moved out. It covers what an empty building costs to carry, the rules that apply while it sits vacant, and how to weigh re-leasing against selling. If the building is a plant that has shut down, our page on selling a closed or closing plant covers permits and machinery.

We buy vacant and soon-to-be-vacant industrial buildings across Philadelphia and South Jersey. We're part of a family-owned business that has been operating for over 15 years. Vacancy rules differ by city and town, so confirm the ones for your property with the municipality.

What does it cost to hold a vacant warehouse?

A vacant warehouse keeps costing money with no rent to cover it. The bills include property taxes, insurance, utilities to keep the sprinklers and heat working, security, snow removal, and roof and lot upkeep. Some cities and towns add a license or registration for vacant buildings, such as Philadelphia's Vacant Commercial Property License.

Add up a year of those costs for your building, then compare them with how long a new tenant or a sale would realistically take. The comparison is the heart of the re-lease or sell decision. A building that sits for a year while a broker markets it pays every one of those bills in the meantime.

IRMI notes that most insurers consider vacant buildings an increased hazard. Watch for break-ins, stripped copper, frozen pipes where the heat was turned down, and roof leaks nobody sees for weeks. A regular walk-through by you or a property manager can catch them early.

Does insurance still cover a vacant warehouse?

Insurance on a vacant warehouse can shrink. Under the ISO commercial property form many insurers use, the limits start once a building has been vacant more than 60 consecutive days. The policy then won't pay for vandalism, building glass breakage, water damage, theft or attempted theft, or for sprinkler leakage unless the system is protected against freezing. Other covered losses are cut by 15%.

The form counts a building as vacant unless at least 31% of its total square footage is in use. That means rented to a tenant using it for its customary operations, or used by the owner for its own. A building that's mostly empty can be vacant under the policy even with one small tenant still in place. Buildings under construction or renovation aren't considered vacant, though the form doesn't define those terms.

Keeping the system protected against freezing keeps sprinkler leakage covered, which is one more reason to keep the heat on in an empty building. Insurers can add an endorsement called a vacancy permit, which suspends the vacancy limits for the period it names. The insurer can still choose to exclude vandalism and sprinkler leakage under it. Policies differ, so read your own, and your agent or insurer can say what it allows.

Philadelphia's vacancy rules

Three Philadelphia rules can apply to an empty industrial building:

• The Vacant Commercial Property License. Once a commercial property has been vacant more than three months with no construction under way or scheduled, the owner needs the license. It costs $202 a year plus a bond of $50,000 to $500,000, sized to the building. A letter of credit is an accepted alternative to the bond.
• Doors and windows. Under the Property Maintenance Code, the owner of a building missing framed, glazed windows or entry doors must install them, and boards or masonry don't count. The rule applies on a block face where 80% or more of the buildings are occupied. Elsewhere, it applies once the code official finds the missing windows or doors have a significant adverse influence on the community and gives the owner 30 days' notice.
• Large vacant commercial or industrial buildings. The owner of a vacant property with a building over 5,000 square feet and commercial or industrial zoning must register it with the city right away. A new owner registers within five days after the transfer of title. The owner has it inspected within 15 days of acquiring it and at least once every two weeks after that.

Our Philadelphia page has Philadelphia's vacancy rules in full, along with the city's other sale requirements.

Town registration rules, and ISRA when a tenant leaves

Some towns make owners register a vacant building, and the rules differ. In Burlington County, Pemberton Township's rule covers a commercial or industrial building where business has stopped in two-thirds or more of the floor area for at least six months. The owner has to register it within 60 days. The first registration costs $500 and each renewal $2,500. Buildings over 10,000 square feet that became vacant on or after January 1, 2023 pay more, starting at $1,000. In Gloucester County, Glassboro requires the owner of a vacant commercial property that isn't owner-occupied to register within 10 days, at $500 a year.

Pennsylvania towns can have similar rules. Abington Township in Montgomery County requires a registration statement for any nonresidential building vacant more than 45 consecutive days. Registering within 45 days of the building becoming vacant costs nothing, and after that the fee starts at $500 and rises the longer the building stays vacant. Check with your municipality, because a registration rule can start running while a building is still being marketed.

When a tenant in a New Jersey building runs a business covered by the Industrial Site Recovery Act, its move-out can trigger ISRA. The rule counts the termination of a lease or sublease as closing operations unless operations continue without disruption, and ISRA's duties fall on the owner or operator. Check the lease for who handles ISRA, and talk to the tenant early. The notice to the state is due within five days of closing operations or of publicly announcing the decision to close, whichever comes first. Our ISRA guide explains how ISRA reaches landlords.

What should you check when a tenant gives notice?

When a tenant gives notice, check the lease for the move-out date and any renewal or holdover terms. Then check what the tenant must do on the way out, such as removing equipment and racking, repairing damage and restoring the space. Walk the space with the tenant before it leaves, settle the security deposit under the lease, and in New Jersey, ask whether ISRA applies.

A tenant's move-out is a good time to document the building. Photos and notes from the final walk-through show what the tenant left behind and what it damaged, and they help a buyer or the next tenant understand the space. If equipment or racking stays, get the tenant's agreement in writing about who owns it.

If you'd rather sell than find a new tenant, you don't have to wait for the space to empty. A building can sell with the tenant still in place and the move-out date known, which lets a buyer plan for the vacancy. Our page on selling with tenants in place covers how leases transfer at closing.

Should you re-lease a vacant warehouse or sell it?

Re-leasing a vacant warehouse can make sense when the building suits today's tenants and you can carry it while it's marketed and fitted out. Selling can make sense when the building needs work to lease, the carrying costs are piling up, or you'd rather not be a landlord again. Compare a year of carrying costs and leasing costs with a written offer.

Smaller buildings had the lowest vacancy of any size range. CBRE counted 5.0% vacancy in buildings under 50,000 square feet across its Philadelphia market in the third quarter of 2026, against 18.8% for buildings of 500,000 to 749,999 square feet. CBRE's rate for buildings of all sizes was 11.1%. A small, functional building can suit an owner-user who moves in or an investor who leases it out.

What to have ready

• The date the building went vacant, or the tenant's move-out date
• The last lease, the tenant's notice and the move-out walk-through notes
• A year of carrying costs: taxes, insurance, utilities and upkeep
• Any vacancy license, bond or notice from the city or town
• Your insurance policy's vacancy terms
• The building's specs, and any environmental reports

Selling a vacant building to us

Send the address, whether the building is empty now or will be soon. We walk it with you and send a written as-is offer, boarded up or not, with the price, a proposed closing date and which costs each side pays. We charge no commission and no fees.

We can't promise a set number of days. When you sell to us, you choose the date, within the required steps and the due diligence period in our offer. How It Works covers each step. Related situations: an older or obsolete building and a building that needs repairs.