Florida likely to see boom in need for cold-storage facilities

Florida is among the states that are expected to see a growth in the demand of commercial property in a specific sector: cold storage.

Because of the growth of e-commerce food delivery services such as Blue Apron and Amazon Fresh, the need for cold storage has skyrocketed.

“It is very niche. About 2% or 3% of all goods on groceries are bought online, and we expect the space could explode to 13% over the next five years because of the penetration of the internet,” a senior economic advisor for CBRE research told CNBC recently.

The real estate company based its forecast on a projection that internet grocery sales will account for $100 billion more than they do now by 2022.

That means more cold storage will be needed. That is likely to be seen in port areas such as the Los Angeles and New York metro areas, along with major food-production states such as Florida, Washington, Texas and Wisconsin.

The consumer trend toward fresher food also is leading the demand for cold storage. Foods with fewer preservatives require more refrigeration.

“Consumers want to eat more fruits and vegetables and less processed food, so when you have fruits and vegetables that need to be flash frozen and then transported across the country to the user, that is definitely taking an uptick in demand for this space,” another analyst said.

Since available cold storage warehouses don’t come on the market very often, that increases their value and could lead to unusual contract stipulations, such as an extra-long lease. As with any real estate transaction, it’s best to weigh the pros and cons and have an attorney review all the paperwork before signing on the dotted line.

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