What is Cold Storage?
Cold storage is a specialized category within the industrial sector of commercial real estate. Generally, cold storage facilities are designed to house perishable goods such as produce, dairy, meat, and medications at controlled temperatures.
To provide temperature control, cold storage warehouses have robust refrigeration and insulation systems, and therefore tend to be more expensive than traditional warehouse property but offer higher returns. Cold storage properties can look like large-scale refrigerated warehouses, a cold room within a traditional warehouse, or temperature-controlled distribution centers.
The agriculture, pharmaceutical, and distribution industries rely heavily on cold storage facilities to keep their goods at specific temperatures prior to releasing them to consumers. Increasing awareness of opportunities in cold storage investing is driving many to add this subcategory to their commercial real estate portfolios.
Why Invest in Cold Storage?
Here are a few reasons why you might want to consider investing in cold storage facilities:
- Demand: With significant increases in online shopping and shipping of perishables, such as grocery delivery services, there is strong demand for cold storage which will remain steady for the foreseeable future, thus increasing property values.
- Recession Proof: While no investment is fully recession proof, cold storage is a vital part of our economic infrastructure and is much less impacted than other sectors of commercial real estate during a downturn.
- Diversification: To build wealth, it’s crucial to have varying types of assets, and cold storage is the perfect opportunity to diversify your real estate portfolio with its unique nature.
- Steady Income: Being able to provide service to customers in several different industries makes for consistent cash flow.
Your Next Purchase
If you are considering your next commercial real estate purchase and aren’t sure which direction to go, we would love to be a resource! Please contact Steve Longenecker and Northern Colorado Commercial Real Estate at WeBrokerCORealEstate or 720-600-9513.
We give out $250 gift cards for referrals that become our real estate clients.
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