CBRE analysis finds California, Washington State, Florida among states with most industrial cold storage
Los Angeles - The growth of online grocery sales could result in demand for up to 35 million square feet of U.S. cold-storage space shifting from retail stores to warehouses and distribution centers within the next seven years, according to a new report from CBRE.
“The U.S. market for warehouses and distribution centers has been on a multiyear run, but there still are segments in the relatively early stages of their growth, like cold storage,” said David Egan, CBRE Global Head of Industrial & Logistics Research. “As e-commerce expands further into the grocery business, the resulting growth of the food supply chain and demand for new, climate-controlled warehouse space could very well be the new opportunity that investors and developers have been seeking.”
CBRE estimates that the U.S. market for food-commodity cold storage space spans roughly 180 million sq. ft. of industrial space – namely refrigerated warehouses – and about 300 million sq. ft. of space in grocery stores and other retail venues.
That ratio between industrial and retail cold-storage space will shift in the coming years as, according to FMI/Nielsen, online grocery sales will grow from 3 percent of all grocery sales in 2017 to 13 percent by 2024. Based on that projection, CBRE calculates that demand for as much as 35 million sq. ft. of cold-storage space will shift from retail properties to industrial.
CBRE’s analysis found that larger concentrations of food-grade, cold-storage facilities occur in states with substantial agricultural production, large populations or both. CBRE estimates California to have the most industrial cold-storage space (nearly 400 million cubic feet), followed by Washington state (271 million), Florida (260 million), Texas (231 million) and Wisconsin (228 million).