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While his friends played in the Florida sunshine, Elliot Greenbaum, then 11, was often bundled up in coat and hat, sweeping the floors in his dad’s refrigerated warehouse. As a teenager, he drove the forklift, loading Danish canned hams into station wagons bound for Cuban sandwich shops.

Now 73, he’s closing the business he inherited from his Polish immigrant father, unable to compete in a $6 billion refrigerated storage industry dominated by institutional investors scaling up to serve the needs of food giants such as Unilever NV and Nestle SA. As a result, some of his smaller customers—which recently included a specialty frozen dog-food maker and a kombucha startup—are at risk of getting shut out of the cold. “We’re losing the exotic things that make America great,” says Greenbaum, who just sold his last warehouse. “Now other people far away are deciding how your ice cream should taste.”

Cold storage is the kind of niche business that Wall Street long ignored—it amounts to just 3% of public warehouses—but now it has become its latest darling. Roughly two dozen private equity firms have latched onto this corner of industrial real estate. They’re aiming to capitalize on the growing preference for grocery deliveries to homes, which requires warehouse space, and looking for a hedge in the next recession. (Eating isn’t cyclical.) And two companies, Americold Realty Trust and Lineage Logistics, have grabbed 60% of the sector in the U.S. and Canada, expanding through a rapid-fire series of acquisitions.

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