Cold Storage Comes to the Forefront with COVID Shifts –

By: Lisa Brown,
July 2, 2020

The experience of COVID has changed the outlook for cold storage as an asset class, making it an attractive long-term investment that’s likely to ensure security in the food supply for years to come.

SAN FRANCISCO—In March, the Department of Homeland Security classified cold storage facilities and employees as essential infrastructure, keeping them open and operating through the peak of the pandemic. Ultimately, the frontline workers in this sector prevented widespread food shortages across the country.

“Though cold storage is far from top of mind for most people, it is a vital component of our food supply chain,” says Alex Langerman, COO of Cold Summit Development.

As states begin to reopen, consumer food shopping habits are highly unlikely to return to pre-pandemic style shopping. E-commerce grocery shopping will continue growing and will most certainly include more perishable items as fresh/frozen produce and protein move from farmer to processor, wholesaler to distributor and direct to consumer.

In fact, a recent survey found that 46% of respondents will continue to purchase goods online even after the COVID-19 pandemic subsides, according to LandVision. And, CBRE estimates that an additional 75 million to 100 million square feet in freezer/cooler space will be needed to meet changing consumer habits.

This growth of e-commerce means industrial brokers and investors looking to capitalize on this trend need a fast, efficient way to identify promising opportunities. The experience of COVID has changed the outlook for cold storage as an asset class, making it an attractive long-term investment that’s likely to ensure security in the food supply for years to come.

“We were seeing this investor interest and which trends are being turned on their heads,” Scott Pertel, Cold Summit CEO, tells “And we have the data to back it up for the direct-to-consumer produce delivery models leading to increased cold storage facilities.”

This future demand is augmented by three key trends emerging from the pandemic: increasing inventory levels, shifting global food flows and automation. These trends, reinforcing previously existing growth drivers, are serving as a catalyst for the cold storage sector as it advances from a niche investment subsector to a core infrastructure asset class, says Cold Summit.

Moreover, the outlook for many real estate sectors are being muddled by the impacts of COVID. Retail properties are facing an acute demand shock resulting in a wave of bankruptcy filings by tenants and mortgage defaults by property owners, compounding the secular decline of brick-and-mortar stores. Office and hospitality are similarly challenged by short-term freezes on in-office work and travel with uncertainty around the timing and shape of a recovery. Multifamily and conventional industrial are faring better, though the impact of a potential recession weighs heavily.

Cold storage has historically proven resilient in times of recession: in 2009, with revenues for the third-party logistics/3PL sector down nearly 7% in aggregate, food & beverage/F&B 3PL revenues fell by just one-tenth of 1%, according to Cold Summit. Furthermore, through the past two recessions, F&B was the third-best performing retail sector, experiencing a 3.7% month-over-month growth rate against a decline of 6.1% for total retail sales.

F&B sales have performed exceptionally through the COVID crisis with 25.6% growth for March 2020, compared to an 8.7% decline for retail as a whole. Cold storage has consistently performed during times of economic distress, in line with expectations for an infrastructure asset class.

“Beyond sector performance figures, the COVID experience has brought into clear focus the need for resilient food supply chains in the face of pandemic risk,” says Langerman. “Through the COVID experience, cold storage has been shown to be more critical than most previously appreciated, and the sector will be profoundly shaped by trends emerging from the pandemic. The reversal of just-in-time inventories to more resilient supply chains requires a behavioral change by many uncoordinated actors in the economy and is thus the most precarious trend of those discussed. The duration of the COVID experience and the severity of its impacts will determine its stickiness.”

On the other side, the shifts in global food flows which have been underway for the past two decades will be reinforced, further driving demand for cold storage capacity. Likewise, increasing adoption of automation in the warehouse was driven by economic and operational efficiencies prior to COVID, with the realities of the post-COVID setting serving only to accelerate the shift.

“Cold storage has emerged as the most dynamic component of the real estate and infrastructure asset class,” says Langerman. “If the 2008 financial crisis and Great Recession saw the arrival of the industry as an established investment sector, the COVID crisis and the resulting drive for resilient food supply chains is proving to be the inflection point for accelerated growth and rapidly ramping demand. In the dark of the COVID experience, cold storage is shining bright.”

About Cold Summit:
Cold Summit Development is a pure-play cold storage developer and owner of refrigerated warehouses and low-temperature distribution centers. Learn more at or by emailing


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