Related Affiliate to Enter Cold Storage and Logistics Space

RealCold, backed by Related Fund Management, part of 50-year-old real estate developer and operator Related Companies, announced its new full cold chain logistics firm.

The intent is to run Class-A cold storage facilities, starting with locations in Lockhart, Texas and Lakeland, Florida, according to the company’s website.

The Lockhart location will have 312,000 square feet, 34,700 pallet positions with 96-inch openings, 16,000 square feet of office, 50-foot clear height, more than 40 dock doors, a refrigerated dock, and more than 60 trailer parking spots.

The Lakeland facility will have 376,000 square feet, 43,000 pallet positions with 96-inch openings, convertible rooms that can run from -20°F to 50°F, 2-deep and 1-deep racking, two separate 8,000 square foot offices, more than 40 dock doors, 50-feet of clear height, and more.

The company describes itself as a “future state cold chain logistics provider,” with value-added services that it calls a “key differentiator.” Some of the services include e-commerce; personalization and gifting programs; marketplace and selling platform integration; each pick, kitting, and order fulfillment; and dry ice and freezer pack management.

“All RealCold operations are planned with Safe Quality Food Institute (SQF) certification in mind,” the firm says. Handling includes pallet receipt, pallet inversions; inbound pallet decanting for case and each storage; mixed pallet handling; pallet checking and cross-docking; layer picking; and case order picking and outbound order assembly.

On his LinkedIn page, RealCold CEO Keith Goldsmith said the company was reserving capacity, starting with the first quarter of 2025.

A race into cold storage isn’t unusual at this point. As Rick Kingery, who leads Collier’s food and beverage practice group, wrote back in July, the frozen food market has seen a lot of growth, with U.S. sales topping $72 billion, with a projected 2030 $95 billion value, and a global value of $265 billion. The numbers have attracted the likes of Cargill, Conagra, Nestle, General Mills, and Unilever. But on average, U.S. refrigerated buildings are older than 37 years, so modernization offers strong opportunities.

“The number of cold storage establishments1 grew 8.6% from 2020 to 2021, and an additional 7.5% from 2021 to the first half of 2022, eclipsing the annual average of 2.2% observed from 2013 to 2020,” Newmark wrote in a report on the temperature-controlled development pipeline reaching a new record at the end of 2022.

What is particularly unusual for RealCold is its plan to build speculative facilities in advance, with each of the first two warehouses running $150 million and another eight facilities in six markets by the end of 2025, according to the Wall Street Journal. “Americold and Lineage Logistics, the world’s largest cold storage provider with over 400 facilities, typically don’t build new facilities unless they are preleased because of the high cost of creating numerous ranges of temperature-controlled environments,” it wrote.