Cold storage units will continue henceforth to increase in demand and price. Since the 2019 announcement by Amazon, cold storage units are on the rise. Amazon announced the start of grocery delivery to Prime members in 2 hours. The rise brought about a change in consumer’s preferences.
The demand for cold storage facilities became more vigorous. During the U.S. Food on Demand Series in 2019, CBRE predicted an estimated growth rate of about 4% until 2022.
The need to have cold storage facilities has been contributed by consumer behavior change. More and more people order their groceries online. Apart from grocery, other industries have dealt with cold storage facilities, such as medicine.
According to the Food Marketing Institute, online grocery sales will increase from 3% in 2018 to 13% in 2022. They also went a step further to predict a higher increase of up to 70% of households in American shopping groceries online within the next ten years.
The development of more platforms offering online shopping has increased demands for local warehouses and cold storage rooms. The need to do delivery faster, especially for groceries, requires special cold facilities to keep the food fresh.
Online grocery shopping is not expected to come down; instead, it will soon grow more significant percentages. Warehouses will require a significant upgrade to meet the growing demand for cold storage.
Cold storage Definition
Cold storage is an establishment set up for purposes of storing perishable commodities under lower temperatures. Such products include fish, vegetables, meat, medicine, and fruits, among others.
Benefits of a Cold Storage Unit for commercial property owners/sellers
Cold storage units are not for the food industry alone, but different businesses require the facility. You have enough reasons to buy a property with a cold storage unit for a commercial property investor.
Since you look at getting different client’s you ought to consider a property with a cold storage unit. Investing in real estate is expected to be more beneficial in the coming years.
On the other hand, commercial property sellers should expect properties with a Cold storage unit to have an increased value. Hence, it’s essential to incorporate a cold storage unit.
Here are some industries which use the services of a cold storage unit:
- CANDLES – The candle industry requires cold conditions for their products to remain in good shape as produced. Exposure to a warm temperature usually results in the candles melting and losing their shape. However, if you live in cold climate areas, there is no effect. If intending to store candles for a retail and shorter period, then a cold storage room is unnecessary; however, a cold unit is vital for a longer duration.
- ARTWORK – This is not common knowledge, but paintwork quickly fades under hot conditions. Suppose you intend to store any artwork for an extended period, then you need cold storage to avoid the paint peeling off. The temperature also causes the color to fade. Especially for storage that lasts long, artwork requires to be kept under cold conditions.
- Flowers and plants – Flowers are always on demand and keeping them fresh is a must. Cold conditions are favorable for flowers, especially while awaiting delivery or transportation. As e-commerce grows, there is a need to meet online flower orders; hence a cold storage unit must be considered.
- Makeup Lipstick business -A Cold storage unit is the back born of the makeup business, especially for lipstick. Currently, in the world, cosmetics are global products with high demand. A Cold storage unit help keep the long-lasting cosmetics condition.
- Cologne – a pleasant scent is your everyday goal. The cologne industry requires cold storage to preserve the scent for longer.
- Medicine – Medicine remains amongst the leading users of cold storage facilities. Some specific medicines require to be kept in cold conditions to stay effective. You must always store medical supplies and blood storage in cold temperatures.
Benefits of Cold storage unit to commercial suppliers
The shopping culture is now shifting from a store method of shopping to online shopping. Online shopping has mainly been witnessed with grocery shopping. There’s too much convenience of ordering from home for clients.
However, with increased online shopping, meeting the demand will require expanding the availability of products in their stores. The thought of this will need suppliers to invest in cold storage facilities to meet demand as it arises.
Here are reasons for suppliers to invest in cold storage:
- Meet Demand- The increase in online shopping is only expected to go higher. More and more service providers will move to groceries and products online shopping and delivery. Therefore, as a supplier, you will need a good facility that helps you maintain your stock levels.
- Gives freedom for variety- Various industries need cold storage rooms; hence, cold storage will provide you with the freedom to accept various commodities for a severe supplier.
We recently closed a 200,000 SF cold storage facility with a two year leaseback in Delaware with a 3rd party logistics company who services grocery stores. The building was an older cold storage site and will need some significant upgrades when it gets a new tenant after this transitional leaseback period. We sourced this deal via our internal platform off market and was a very private transaction for all parties involved.
Point Acquisitions is the best choice for property owners who want convenience, simplicity, and a stress-free process. We are experts in evaluating commercial property through various methods which provide a clear understanding of how we arrive at your property’s value. Point Acquisitions is a proven buyer with a great track record. Selling your property to Point Acquisitions is completely free. No commissions and no service fees.
Estimating the value of a commercial real estate can be quite intricate compared to residential property as professionals use various methods for valuation. An exact value is essential to find deals other investors have bypassed and steer clear of investing…Read More
With careful planning and expert guidance, savvy investors can use a 1031 Exchange to defer their capital gains taxes despite purchasing new construction. While IRS guidelines forbid using funds from an exchange for building projects, this creative maneuver allows investors…Read More
If you’re considering a 1031 exchange, you may wonder if exchanging a residential property for commercial real estate is possible. The answer is yes, with some caveats. Here’s what you need to know when it comes to converting 1031 exchange…Read More