The cold storage sector is poised for significant transformation due to rising global demand for refrigerated storage in response to trends such as e-commerce, pharmaceutical advancements, and changes in grocery logistics. Jonathan Epstein, managing partner at BGO, highlights the dual challenges and opportunities within this asset class. While 20-25% of existing cold storage facilities are obsolete due to outdated designs and insufficient infrastructure, the strategic locations of these facilities maintain their investment value. The market’s growing need for modernized, efficient cold storage is driven by advancements such as multi-temperature zones and heated flooring, creating an estimated $150 billion opportunity for new developments.
Despite high barriers to entry, including specialized expertise, steep costs, and geographic constraints, investors can find substantial returns by leveraging strategic insights and partnerships. Epstein emphasizes that modernizing existing facilities and pursuing build-to-suit developments in high-demand locations can capitalize on the sector's resilience and potential. The evolving needs of the food supply chain and pharmaceutical storage underscore cold storage's critical role, making it an attractive investment opportunity for forward-thinking stakeholders.