Cold storage is no longer a niche asset class—it’s fast becoming a core focus in industrial real estate, driven by shifts in grocery delivery, pharmaceutical logistics, and global supply chains.
Colliers reports that speculative cold storage development is rebounding, and institutional capital is pouring in as demand outpaces modern supply. For CRE investors, owners, and developers, this presents a rare convergence of timing, demand, and long-term growth potential.
Here are three ways real estate professionals can strategically position themselves to take advantage of this emerging industrial powerhouse.
1. Build Spec Cold Storage in Strategic Markets
Cold storage facilities are notoriously expensive and complex to build—but that’s precisely why they can be so lucrative. Demand is rising, yet speculative cold storage supply remains limited. According to Colliers, the cold storage market is expected to reach a value of $427 billion by 2030, with about 2.2 million square feet of speculative projects expected to deliver this year, following a muted 2023. Developers like BGO and Saxum are among those ramping up activity, especially in food-centric regions like Illinois, Florida, Texas, and Georgia.
What’s changed is investor appetite: facilities that previously had to be fully pre-leased are now breaking ground with partial tenant commitments—or none at all. This confidence comes from changing consumer behaviors (especially in grocery e-commerce) and robust rent premiums. Cold storage rents can run 2–3 times higher than dry warehouse space, making the financial calculus compelling even in tighter lending environments.
The opportunity lies in selecting the right locations: urban-adjacent logistics hubs near ports, major highways, or dense populations are ideal for last-mile fulfillment. Think Dallas, Jacksonville, the Inland Empire, or parts of New Jersey. Infill development may cost more upfront, but it positions assets to serve key markets for decades to come.
2. Modernize Aging Cold Storage Facilities to Unlock Value
Roughly 80% of the U.S. cold storage inventory is more than 20 years old, with many facilities built in the 1970s and ’80s. As demand for refrigerated and frozen logistics intensifies, these aging buildings are quickly falling behind modern standards in both energy efficiency and operational design.
This creates a window for value-add investors and developers to retrofit underperforming or outdated cold assets. According to NAIOP’s 2025 Cold Storage Industry Report, the key upgrades in demand include automation systems, high-efficiency insulation, LED lighting, refrigerated docks, and vertically optimized racking systems. These improvements not only reduce operating costs but also increase throughput and tenant appeal.
Retrofitting isn’t cheap, and not every facility is a viable candidate. But for those in the right locations—particularly near ports, population centers, or transport corridors—the payoff can be substantial. Institutional investors are already scouting for well-located, under-optimized cold storage assets to acquire and modernize.
CRE professionals who understand both the physical infrastructure and tenant needs stand to gain a significant edge in this modernization wave.
3. Diversify Tenant Exposure Across Food, Pharma & 3PLs
One of the most compelling reasons to pursue cold storage today is its growing tenant diversity. While food and beverage remain the dominant users—especially frozen foods and perishable grocery items—other industries are entering the mix. Pharmaceutical companies, biotech firms, and life sciences tenants are increasingly relying on ultra-cold facilities to store sensitive biologics, vaccines, and specialty medicines.
This is expanding the types of facilities required: from standard -10°F to -80°F ultra-cold spaces, and even hybrid temperature zones within the same facility. Experts say 3PLs (third-party logistics providers) are also stepping up their cold-chain capabilities as shippers seek more flexibility and responsiveness.
For CRE owners, this presents an opportunity to build or retrofit facilities that appeal to a broad mix of tenants. Properties with flexible layouts, energy-efficient systems, and strong locations can attract long-term leases from companies across food, pharma, and logistics verticals. In a world where tenant concentration risk is real, diversified cold storage is a smart hedge.
Additionally, public refrigerated warehouses (PRWs) that operate under warehouse management agreements (WMAs) offer a stable model that appeals to institutional capital—a growing force in this space.
Final Takeaway
The cold storage boom isn’t a passing trend—it’s a structural shift. Whether you’re investing in speculative development, upgrading outdated facilities, or creating tenant-diverse cold logistics hubs, there are clear and scalable ways to benefit from this momentum.
For those willing to navigate the complexity and commit to long-term plays, the payoff could be considerable. In the cold chain, those who act early often win big.
