A 'Bullish' Outlook for Cold Storage Arises from Pandemic

As COVID-19 continues to create havoc throughout all types of businesses in this country, experts in the cold storage sector see opportunity.

The WeeklyTake, a podcast that CBRE Group launched at the end of March, recently led a podcast discussion on the cold storage sector with Fred Boehler, president and CEO of A Miracle, the largest publicly traded company in the cold storage space arena. A Miracle owns Americold, which oversees more than one billion cubic feet of refrigerated storage space globally.

Boehler said during the podcast that “one of the implication of COVID” was that “we were not resilient enough. There’s too much just in time delivery and because of that we had shortages… The other megatrend we’re seeing is maybe we’ll see some more manufacturing come back here.”

CBRE Group’s Matthew Walaszek tells GlobeSt.com Tuesday there is room for optimism in the cold storage sector, despite the pandemic or, he said, maybe because of it.

“COVID-19 was immediately disruptive,” said Walaszek, CBRE Group’s associate director of Industrial & Logistics Research. “But, it kind of created unique opportunities that were not expected. The main opportunity is that COVID actually shed light on the importance of the cold storage sector. When you look at the real estate behind it, that shows how important it is. We have received interest from investors about purchasing cold storage space,” he said.

There are, Walaszek said, about 220 million-square-feet of cold storage space capacity in the country. The most popular regions where there is space capacity, he said, are New York, California, Illinois, Texas, Florida and Wisconsin.

“There is a lot of growth for cold storage and we’ll just have to see how it grows in time,” Walaszek continued.

Cold storage space, Walaszek said, are temperature-controlled warehouses. They differ, he said, in temperature for different food products such as ice cream and frozen food and meats and fresh produce.

COVID-19, Walaszek said, has, not surprisingly, caused an uptick in online grocery shopping. That trend, he said, is expected to continue.

Back to the podcast and Boehler’s optimistic look at the future of his business.

“I’m really bullish that the good times will roll for a long time because the one thing that could be said is no matter what’s going on out there. we’ll still going to eat,” Boehler said. “So, you know, I think the way that we look at our business is that organic growth is nice. And, then on top of that, we’re developing infrastructure out there to support the growth of our major food manufacturers.”

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