Icy Innovation: How Cold Storage Solutions Are Keeping Things Cool
A frozen dead guy resides in a Tuff Shed high in the Colorado Rockies where he is in a state of suspended animation, awaiting the big thaw that will bring him back to life.
Before Grandpa Bredo Morstoel died from a heart condition in 1989, he lived in Norway, where he loved painting, fishing, skiing and hiking. After he died, instead of a burial, he was packed in dry ice and shipped to the Trans Time cryonics facility in Oakland, California, where he was placed in liquid nitrogen.
He was moved to Colorado in 1993 to stay with his daughter and grandson, who hoped to start a cryonics facility of their own. Visa issues sent Morstoel's heirs back to Norway, but Grandpa remains on ice in Nederland, Colorado.
Although he's not in a state-of-the-art cold storage facility, there are plenty of them that would be suited to keeping Grandpa Bredo suitably chilled. Demand for cold storage continues to grow.
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Cold storage refers to anything from 12 C to minus 30 C. Deep freeze facilities used for medical supplies range from minus 30 C to minus 18 C and those used for frozen foods are generally minus 18 C to minus 10 C.
Cold storage development accounts for 1.5% of the total industrial development pipeline — despite hitting a new high in 2022, according to Newmark. Cold storage development hit an all-time high of 9.8 million square feet by the end of 2022.
Building cold storage costs at least twice as much per square foot as traditional warehouses, so despite demand, the inventory is aging. The average age of cold storage facilities in the top U.S. market is 37 years, which means the operating systems are inefficient and there are opportunities for new cold storage development. Much of the demand for cold storage space is client-specific and mostly build-to-suit development, although port-serving and strong population growth markets are driving some speculative development.
Cold storage building deliveries skyrocketed during the pandemic, with a 46% increase in 2021 over 2020 and a 93% year-over-year increase in 2022, CBRE National Food Facilities Group Senior Vice President told Commercial Property Executive.
Fresh produce accounts for the largest portion of the cold storage market. The share of e-commerce grocery sales in the U.S. is expected to rise from 13% in 2021 to 21.5% by 2025, according to a June 2022 CBRE research report on the sector. Cold storage space accounted for about 225 million square feet in 2022, according to CBRE.
You just need to consider Grandpa Bredo's story to understand that cold storage goes beyond keeping food fresh. It also houses artwork, commercial films, plants, candles and beauty products. Pharmaceutical cold storage has also seen a boom in demand.
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