Sierra Supply Chain Services Pushes Energy Efficiency in Cold Facility

The discussion of energy savings in commercial real estate often comes across as an extra. Not only save some money in operating costs, but look competitive as SEC environmental disclosures start to hit and investors take notice.

But while HVAC, lighting, elevators, and other such areas of operation do take significant power, some property types—cold storage and data centers, for example—consume power at a high and unremitting rate. To minimize energy use in such facilities requires specialty design.

Sierra Supply Chain Services opened a new cold storage facility in Hamilton, Ontario, Canada. The $65 million structure is 65 feet tall and 250,000 square feet in size, with nearly 164,000 square feet of storage space, 36,000 pallet positions, and 30,000 square feet of food processing space.

The facility, called Sierra Cold, uses such equipment as Evapcold LCR and a Budzar Modular Engine Room. “Expertly designed narrow aisles and raised ceiling heights maximize density, decreasing the facility’s footprint and increasing storage capacity,” the company said in its press release.

The facility design comes from consultancy Ti Cold “to create a temperature-controlled facility developed with innovation in mind, resulting in an efficient and effective solution that meets the demands of cold chain users.” The design firm has decades of experience in the field and uses “advanced technology solutions to create efficient buildings that scale with a business and that are designed to maximize profitability through fully integrating operations and supply chain.”

Since last year, cold storage has been in strong demand as companies have expanded into emerging specialty markets like Utah. With the pandemic, the need for cold storage of vaccines grew. In general, many pharmaceuticals, as well as foods, are perishable and need storage in varying degrees of cold. By the beginning of this year, cold storage properties were selling for 40% above national CRE square foot rates, trading at $157 per square foot versus $112.

Spec development has exploded to ten times the rate in 2019, reaching 3.3 million square feet in the second quarter of 2022. CBRE had projected that cold storage demand would continue to grow on the back of e-commerce.

“With increased demand for perishables, cold storage capacity has been strained by transportation backlogs, inflation and labor shortages exacerbated by the pandemic. This has led to declining stock levels of primary food commodities,” CBRE reported.