The Cold Chain Sector Recalibration

United States cold storage is a specialized sector representing less than 2% of the overall industrial market, yet it is mission-critical infrastructure for U.S. consumption. Today, the property type is in a period of generational change. Average rents have grown more than 100% since 2020, yet vacancy has climbed to a two-decade high. This unusual pairing of surging rents alongside elevated vacancy reflects a market digesting a record level of new supply with a growing bifurcation between the modern space demanded by occupiers and an aging legacy base.

Today’s two-decade vacancy high contrasts sharply with the sector’s all-time low vacancy rate recorded just four years ago. The headwinds in this study of extremes include depressed food inventory levels, elevated grocery inflation, U.S. policy-related uncertainty and, most significantly, record volumes of new supply delivering to the market. The new supply comes after an unprecedented run-up in the pipeline over the past five years. Although the development pipeline has receded from record highs, it remains historically elevated at 7.4 million square feet.

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