September 3, 2025 | BOMA International, Ella Krygiel
The cold storage sector is growing rapidly, driven by demand for faster e-commerce and online grocery delivery. The global cold storage market was valued at over $190B in 2024 and is projected to grow at 17% compound annual growth rate (CAGR) through 2030 (Research and Markets External Link). The cold storage market is essential not only for food storage and transportation, but for temperature-sensitive products like vaccines, insulin and gene therapies. These facilities require strict regulatory compliance, sophisticated digital monitoring systems and advanced automation beyond basic refrigeration to improve overall efficiency. To explore these market dynamics and their implications for industrial real estate, let’s hear from two commercial real estate experts: Craig Hurvitz Director, National Industrial Research, Colliers and Jason Tolliver, President, Logistics & Industrial, Americas Real Estate Advisory, Cushman & Wakefield.
Infrastructure Challenges in Cold Storage
The cold storage sector faces a significant infrastructure challenge: the average facility is 42 years old, with more than half exceeding 30 years, according to Food Logistics. These aging facilities lack modern energy efficiency and automation standards, creating opportunities for investors to capitalize on modernization as the sector evolves. Both experts identified common challenges including aging facilities lacking modern standards, power supply constraints, labor shortages driving automation needs, and zoning/permitting obstacles. Hurvitz highlights several key issues: “power supply constraints, supply chain disruptions, the rising cost of development, zoning and permitting struggles, limited labor supply, and need for infrastructure to meet automation and data management needs.” Tolliver echoes these concerns, adding the challenge of securing proximity to population centers despite land scarcity and zoning restrictions. To address these infrastructure gaps, Tolliver proposes targeted solutions:
“I recommend a dual strategy. For existing facilities, targeted capital investments in upgraded refrigeration systems with variable frequency drives, improved insulation, and IoT-based energy management can dramatically reduce energy consumption while improving ESG metrics. For new development, vertical cold storage designs with multi-level racking maximize floor area ratios and reduce land costs.”
Energy Requirements and Site Selection
Both cold storage and data centers are creating unprecedented demands on the power grid, fundamentally changing industrial site selection criteria. The energy requirements are substantial: cold storage facilities need 30-40 watts per square foot for continuous refrigeration, while data centers require 20-100+ megawatts with redundancy, according to Tolliver. This energy intensity is creating significant development challenges. According to BCG, projects face delays primarily due to grid capacity constraints, lengthy permitting and interconnection processes, and surging demand that outpaces infrastructure upgrades. Hurvitz observes these delays firsthand:
“The explosion of AI and cloud services has sparked massive data center development across major metros like Northern Virginia, Dallas-Fort Worth, Phoenix, and Atlanta. It’s now common for projects to face 12-to-24-month delays just to secure adequate electrical service.”
These constraints are reshaping location strategies in fundamental ways. As Tolliver explains, “developers prioritize sites near substations, grid congestion in major markets is pushing expansion to secondary markets, and both sectors are adopting on-site solar, battery storage, and microgrids.” The urgency is clear. Deloitte predicts a five-acre data center’s consumption could grow from 5 to 50 megawatts, driving real estate strategies to increasingly incorporate renewable energy partnerships and long-term power contracts, resulting in a complete shift in site selection priorities. As Hurvitz puts it: “Even shovel-ready sites are being sidelined due to grid congestion. Real estate site strategy is evolving; it’s no longer just about access to highways or labor, it’s about access to electrons.”
Cold Storage Growth: Opportunities and Challenges
Given the cold storage sector’s projected growth, I asked our experts what they see as the biggest opportunities and challenges for the broader industrial real estate industry. Both Hurvitz and Tolliver acknowledge that cold storage is transitioning from a smaller, specialized sector to mission-critical infrastructure, attracting interest from institutional capital and private equity. Hurvitz quantifies this transformation: “An uptick in demand following COVID-19 led to a surge in speculative development, totaling 6.3M SF nationally between 2022 and 2024, with another 2.2M SF expected by end of 2025.”
However, both experts identify timing and supply challenges that complicate this growth trajectory. Hurvitz warns that due to lower throughput volumes, lean supply chains and economic uncertainty, this new supply is having a larger impact than anticipated. The challenge extends beyond timing to capital intensity, as Tolliver explains: “Cold storage requires 2-3x the capital investment of traditional warehouses due to specialized HVAC, insulation, and backup power systems. Extended lead times create risk that supply won’t keep pace with demand, potentially causing bottlenecks in key logistics corridors.” Industry reports confirm these capacity constraints are already occurring, with companies struggling to find adequate refrigerated space. Despite these near-term challenges, Hurvitz remains optimistic: “Despite the temporary pullback, the outlook remains positive for 2026 and beyond.”
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