Category: Articles

Chicago Industrial Market Welcomes Cold Summit Development’s New Class-A Cold Storage Facility

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CHICAGO–(BUSINESS WIRE)–Cold Summit Development has launched Cold Summit Chicago I, a new multi-tenant speculative cold storage project in the Chicago metro area. The project features a 213,600-square-foot development, including 7,000 square-feet of office and fully convertible temperature-controlled suites. Sitework and construction have commenced with forecasted delivery by August 2022. The project follows developments by Cold Summit in Dallas and Phoenix.

The Chicago cold storage market is limited in supply, thus creating a high barrier-to-entry for users and investors. This makes the Windy City market an attractive candidate for development.

“Chicago is a premier market for industrial real estate, serving last-mile distribution to the third-largest metro population in the U.S. as well as filling its role as a national intermodal logistics hub,” says Alex Langerman, co-founder and COO of Cold Summit Development.

The project is located at 5020 W. 73rd St. in Bedford Park, IL. Bedford Park is a highly desirable industrial hub less than 15 miles from downtown Chicago and three miles from Midway Airport, with the project site adjacent to the CSX intermodal terminal, the largest in the CSX network.

“We are thrilled to bring our Class-A2 cold storage product to the dynamic Chicago market. In addition, we look forward to supporting the Village of Bedford Park education system and local children through our Cold Summit Giving mission,” says Scott Pertel, president and CEO of Cold Summit Development.

“We are thrilled to bring our Class-A2 cold storage product to the dynamic Chicago market. In addition, we look forward to supporting the Village of Bedford Park education system and local children through our Cold Summit Giving mission”

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About Cold Summit Development:

Cold Summit is a leading developer of cold storage facilities. Our mission is to facilitate the movement of healthy products to consumers by delivering innovative, industry-leading cold storage real state solutions with a relentless focus on product integrity.

Contact:
Cold Summit Development
admin@coldsummit.com

 

Developer Plans Cold Storage Warehouse Space Near The Port Of Wilmington

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By: WilmingtonBiz
BY CHRISTINA HALEY O’NEAL, POSTED AUG 27, 2021

A developer is planning to add cold storage warehouse space on property near the Port of Wilmington.

Cold Summit Development looks to bring nearly 460,000 square feet of cold storage space in two buildings to property owned by the port off Raleigh Street, officials with N.C. Ports announced this week.

On Thursday, the N.C. Ports Authority board approved a 30-year lease agreement with the developer for nearly 35 acres on two lots. The lease is the result of a process that was started two years ago to draw interest in the Raleigh Street property for the development of cold storage opportunities, port officials said.

“This partnership represents continued investments in our strategy to become a leader in cold chain logistics,” said N.C. Ports Executive Director Brian Clark. “We are particularly excited that this announcement gives more options and capacity to North Carolina’s business, including agriculture, grocery sector and life sciences.”

Cold Summit was “the most desirable partner based on their plan and financial strength and our willingness to get the agreement done,” said Amy Passaretti, N.C. Ports communications manager.

The project includes two phases. In the first phase, Cold Summit plans to develop a 300,000-square-foot refrigerated warehouse. The facility will have a multi-suite, multi-temperature building with three rooms and 40,000 to 50,000 pallet spaces with the ability to handle frozen or chilled products.

“This represents substantial progress to provide cold chain solutions to exporters and importers not only in North Carolina but the entire East Coast market,” said Bob Blackburn, director of refrigerated business development.

The developer has 15 months to begin construction on the first phase of the project. The first building is to be completed “no later than 25 months from now,” Passaretti said. The second phase “has the option to be 159,000 square feet,” in a second building on the property, she said.

Cold Summit is required to notify N.C. Ports on plans to proceed with the second phase of the project before they open the first phase, she said.

“N.C. Ports’ local traditional strengths include frozen and refrigerated exports, so we are bullish on the ability to attract more chilled imports like Dole. N.C. Ports has recently received cargo interest and ocean carriers mention the need for additional cold capacity, so this along with other announcements indicate an attractiveness of this market and gateway,” Passaretti said.

The next step is to go to the Council of State to approve and start a feasibility period, she said. Cold Summit will conduct surveys, analysis and studies for the development. N.C. Ports is partnering with the developer on marketing efforts to find tenants and users for the future cold storage warehouse.

“We are thrilled and humbled to be partnering with North Carolina Ports to bring a Cold Summit Development Cold Campus to the Port,” Scott Pertel, CEO of Cold Summit Development, said in a release. “Having graduated from New Hanover High School, I carry tremendous pride in bringing jobs, needed cold storage solutions and greater visibility to my former hometown of Wilmington. The Port has made significant capital contributions to bring this port on par with other leading Eastern Ports.  With the delivery of our multi-functional cold storage campus, we look to facilitate additional growth of the import and export capabilities of the NC Ports.”

The financial partner for the development is PSP Partners, and Primus Builders will carry out the construction.

“This, in addition to other recent area announcements demonstrates that this area is an attractive market for cold chain logistics,” said Hans Bean, chief commercial officer for the ports. “Ideal ocean trade economics involve import/export balance. With North Carolina’s tremendous refrigerated export base, the ability to cater to more exports as well as significant import programs will further unlock the potential of cold chain logistics.”

Contact:
Cold Summit Development
admin@coldsummit.com

DFW Spec Facility Kicks off as Cold Storage Takes Center Stage

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By: Lisa Brown, Globest.com
December 17, 2020

Cold Summit Development recently launched its first project, a 343,000-square-foot multi-tenant cold storage facility, a $60 million project located at 2800 Cedardale Rd. in Dallas.

DALLAS—There are many firsts to come out of the COVID crisis, but cold storage isn’t one of them. In reality, the industrial sector is far from being new to the party. In response to demand related to and beyond the pandemic, Cold Summit Development recently launched its first project, a 343,000-square-foot multi-tenant cold storage facility. The $60 million project is located at 2800 Cedardale Rd. on a 29-acre site within the South Dallas industrial submarket.

Cold Summit Dallas will be only the 12th cold storage facility built in the DFW MSA in the last 20 years. Other recent developments by FedEx and KeHe Distributors in South Dallas highlight the industrial growth of the submarket.

“DFW is a key logistics hub with 40% of the US population within 24 hours, and more than 90% within 48 hours,” says Alex Langerman, co-founder and COO of Cold Summit Development. “Our location is prime for both businesses serving DFW directly, being 12 miles from downtown Dallas, and for those focused on the broader regional/national market coming to Dallas for the business-friendly environment and access to transportation and logistics infrastructure.”

To be sure, cold storage has taken center stage this year with food supply chains stretched to the limit during the COVID-19 pandemic, says Scott Pertel, president and CEO of Cold Summit Development.

“The food supply chain has always been a critical system of infrastructure, but the pandemic has brought it to the forefront,” he says.

But even in non-COVID environments, this supply chain continues to be increasingly relevant, especially in the growth region of DFW.

“Traditional infrastructure assets rarely come to market. Cold storage is a great way for investors to access the infrastructure thesis, underwriting the idea that populations grow and people need to eat, pandemic or not,” adds Langerman.

Key Findings from the Global Cold Chain Alliance’s 2020 COVID-19 Cold Chain Business Impact Survey:

Business Challenges: The most frequently selected challenge was supply chain disruptions, i.e., keeping up with demand surge, slowdowns in food service, production/manufacturing challenges.

Industry Trends: About three quarters of all respondents think the pandemic will cause an increase in the growth rate of e-commerce/direct-to-consumer delivery of chilled and/or frozen product. Even stronger demand for data and predictive analytics is expected in the future, and respondents are optimistic that the growth rate of the industry as a whole will be even more signicant because of the pandemic.

“Future demand will be augmented by three key trends emerging from the pandemic: increasing inventory levels, shifting global food fows and automation,”says Langerman in proprietary insights. “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.”

Pertel points to the added impact that cold storage is having on the transport of the new COVID-19 vaccine. The vaccine made by Pfizer needs to be kept at minus 70 degrees Celsius, while Moderna says its vaccine must be frozen too, but only at minus 20 Celsius or similar to a regular freezer.

“The COVID vaccine is a great example of a novel event underpinning the need for new infrastructure systems,” Pertel says. “There is no greater focus right now than ensuring that our population will have access to a vaccine that will remove the societal and economic restrictions of the pandemic. Cold storage will play a key role in fulfilling that need.”

Out-of-state developer eyes cold storage facility as first North Texas project – Dallas Business Journal

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By   – Staff Writer, Dallas Business Journal

Ketchum, Idaho-based Cold Summit Development is looking to enter the North Texas industrial market with a new cold storage facility, the company confirmed last week.

Plans for the facility first appeared in a document submitted to the Texas Department of Licensing and Regulation. The 343,000-square-foot cold storage distribution center would be located at 4150 N. Dallas Ave. in Lancaster and could cost an estimated $35.4 million to build. Plans state that the facility could break ground as soon as November and deliver by September of next year.

In an email to the Business Journal, Scott Pertel, president and CEO of Cold Summit Development, confirmed that the company is working on a project in North Texas but said they were a few weeks away from sharing more details. The company has previously built a cold storage facility in Laredo as well as projects in Florida, California, Ohio and Idaho.

“We are big believers of the Dallas market and look forward to building many projects there,” Pertel said in an email.

Local experts say demand for cold storage space in North Texas is high, but due to the cost of building it and a smaller tenant pool, supply has remained low. Still, a few companies have pursued cold storage opportunities in the market. Dallas-based Hunt Southwest Real Estate Development completed a 300,000-square-foot speculative cold storage facility in Fort Worth last year, which soon after was fully leased by Emergent Cold, now Lineage Logistics. In Burleson, Austin’s Yukon Ventures is about to break ground on a 400,000-square-foot cold storage facility which is already half leased. The facility will break ground in October and deliver in a year.

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Cold Storage Comes to the Forefront with COVID Shifts – Globest.com

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By: Lisa Brown, Globest.com
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 GlobeSt.com. “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 www.coldsummit.com or by emailing info@coldsummit.com.

 

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Sunday Strategist: Fancy Ice Cream and the Stone-Cold Supply Chain Bloomberg.com

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Post from: bloomberg.com

Wall Street finally figured out its ice cream order. It was only a matter of time.

Private equity funds and institutional investors have cornered a huge chunk of America’s $6 billion cold-storage market, according to this fascinating deep-dive from Prashant Gopal. It’s an early, esoteric bet on the growth of grocery delivery and it’s sure to age well.

Not surprisingly, the new owners have tuned these chilly warehouses up, improving product flow and dangling bigger discounts for the larger, less volatile customers that dominate the center of the grocery store. Smaller, scrappier food startups have been asked to pay more or squeezed out entirely.

Growth, while great, is tricky to plan for. And building a cold storage facility costs three times as much as a traditional food warehouse, so the supply/demand relationship in the cold storage market is about as liquid as the Breyers inside.

This is all sound business blocking and tackling for the new wave of warehouse owners. It’s also, however, pretty squarely at odds with how people, increasingly, are eating these days—a concerted bent toward fresher, local, small-batch brands. The three-month old Klondike bar is out; the days-old pint of Coolhaus “Cereal Dreams” is in. There’s even a corner of the venture-capital world focused on finding the next KIND bar or Annie’s Mac & Cheese.

Read more here.

Wall Street’s Great Ice Cream Buyout Bloomberg.com

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Post from: bloomberg.com

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.

Read more here.