Cold storage demand adds heat to sizzling industrial market

With 16.5M sf, California is the biggest user of cold storage space nationwide

Los Angeles /
Jul.July 08, 2019 01:00 PM
Arthur Rasmussen, Jr., Senior Vice President at CBRE
Arthur Rasmussen, Jr., Senior Vice President at CBRE

The rise of online grocery shopping is bringing with it increasing demand for warehouse space in Southern California.

Those changes in the way people shop for food have created a growing market for refrigerated space within the red-hot industrial landscape in Los Angeles and throughout California. The state remains the biggest user of cold storage with 16.5 million square feet, according to the Los Angeles Times, and the ports of Los Angeles and Long Beach have more than doubled their refrigerated container capacity in recent years.

Space in a typical 100,000-square-foot cold warehouse is about $15 a square foot per year, according to CBRE. Firms like United States Cold Storage and Lineage Logistics, the biggest player in the cold storage game, have warehouses in Los Angeles County and plans to expand.

Cold storage space currently makes up a small portion of the total industrial space, but it’s set for a jolt, and is expected to help keep the industrial market going strong. The U.S. will need to add 100 million square feet of new cold storage space over the next five years to keep up with demand, CBRE said.

That projection stemmed from the Food Marketing Institute and Nielsen forecast that groceries ordered online will account for 13 percent of total grocery sales by 2022, up from 3 percent last year. That spike would amount to an additional $100 billion in annual grocery sales online. [LAT]Gregory Cornfield


Related Articles

arrow_forward_ios
Sprouts Farmers Market ceo Jack Sinclair with 1829 E. Orangethorpe in Fullerton (Sprouts, Google Maps, Getty)
Sprouts bags largest OC lease this year with 337K sf warehouse
Sprouts bags largest OC lease this year with 337K sf warehouse
Panattoni Development's Carl Panattoni and Rivian's R.J. Scaringe with 1441 Myford Road (Panattoni Development, Getty, Google Maps)
Rivian leases 219K sf building under construction in Tustin
Rivian leases 219K sf building under construction in Tustin
Transwestern's Larry Heard with rendering of Legacy Lane warehouse project (Transwestern)
Transwestern snaps up Antelope Valley site to build 100K sf warehouse
Transwestern snaps up Antelope Valley site to build 100K sf warehouse
Dunleer founder BJ Turner with the industrial property at 1165 E. Edna Place in Covina (Google Maps, Dunleer)
Beverly Hills investor continues pivot to industrial with trio of deals
Beverly Hills investor continues pivot to industrial with trio of deals
Sares Regis' Chris Payne with 1515 Rancho Conejo Boulevard and 1489 Lawrence Drive (Sares Regis Group, LoopNet)
Sares Regis sells pair of Thousand Oaks industrial buildings
Sares Regis sells pair of Thousand Oaks industrial buildings
California Attorney General Rob Bonta with the Oleander avenues warehouse project (Getty, Cornerstone)
Fontana, state attorney general settle suit over warehouse project
Fontana, state attorney general settle suit over warehouse project
Eastside, Westside: Lender puts $76M behind Shekhter projects in Santa Monica, warehouse in Vernon
Eastside, Westside: Lender puts $76M behind Shekhter projects in Santa Monica, warehouse in Vernon
Eastside, Westside: Lender puts $76M behind Shekhter projects in Santa Monica, warehouse in Vernon
Greenlaw Partners' Wilbur Smith III and Jeff Bezos with 1211 E. Badillo St., West Covina (Loopnet, News.USC.Edu, Getty)
Amazon about-face on warehouse lease in West Covina
Amazon about-face on warehouse lease in West Covina
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...