Many industrial properties, especially distribution facilities, are relatively easy to construct and manage. But cold storage buildings, which have heavy machinery that needs constant tending, are “not as cookie-cutter as a big box building.” Users, therefore, tend to prefer dealing with experts like Bridge.

Furthermore, “financial institutions are not very comfortable with the product, because they don't know much about it,” he says.

The difficulty in financing new product helps make the sector very attractive to investors. “Vacancy rates are extremely low, and even though there is significant demand, there is very little new product being introduced to satiate the demand.”

“Bridge's cold storage strategy is to develop and acquire cold storage assets in core supply constrained industrial markets,” says Niven. “These assets were purchased, redeveloped and stabilized over the past few years as an example of our strategy.”

CHICAGO-Bridge Development Partners, LLC has just recapitalized a portfolio of three Chicago-area cold storage warehouse properties to Investcorp International Realty, Inc. for an undisclosed amount. A mix of third-party logistics firms and direct distributors of cold storage product lease 93% of the 715,000-square-foot portfolio.

As reported in GlobeSt.com, Bridge has in recent years gotten very involved in the cold-storage sector as a developer and owner, and the company's decision to retain a minority ownership of these properties, and stay on as the property manager, helps illustrates an important factor in the business.

“Cold storage is such a niche market, one where everybody knows everybody else,” Brian Niven, principal – cold storage at Bridge, tells GlobeSt.com. “There aren't many developers out there that have real expertise in cold storage product.”

The three properties include:

• 2635 S. Western Ave., a 308,000-square-foot building in Chicago.
• 8424 W. 47th St., a 315,000-square-foot building in Lyons, IL.
• 1544 Hecht Dr., a 92,000-square-foot building in Bartlett, IL.

Bridge acquired these three buildings in recent years with separate joint venture partners. JLL, CBRE and NAI Hiffman represented Bridge in the transaction.

Many industrial properties, especially distribution facilities, are relatively easy to construct and manage. But cold storage buildings, which have heavy machinery that needs constant tending, are “not as cookie-cutter as a big box building.” Users, therefore, tend to prefer dealing with experts like Bridge.

Furthermore, “financial institutions are not very comfortable with the product, because they don't know much about it,” he says.

The difficulty in financing new product helps make the sector very attractive to investors. “Vacancy rates are extremely low, and even though there is significant demand, there is very little new product being introduced to satiate the demand.”

“Bridge's cold storage strategy is to develop and acquire cold storage assets in core supply constrained industrial markets,” says Niven. “These assets were purchased, redeveloped and stabilized over the past few years as an example of our strategy.”