Thanks to new food delivery services such as Peapod by Giant, Amazon Fresh and Blue Apron, cold storage warehouses and distribution centers are suddenly in high demand. Spencer Levy, senior economic advisor for CBRE research: “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.”
Much of the cold-storage sector’s growth is likely to occur in gateway markets such as Los Angeles and the New York City metropolitan area, as well as leading food-production states, such as California, Washington, Florida, Texas and Wisconsin.
The growth of e-commerce has increased demand for warehouse space exponentially, but one subset of that real estate sector is really heating up. Cold storage warehouses and distribution centers are suddenly in high demand thanks to new food delivery services such as Peapod by Giant, Amazon Fresh and Blue Apron. The sector is small now, but growing rapidly.
“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 5 years because of the penetration of the internet,” said Spencer Levy, senior economic advisor for CBRE research.
CBRE’s forecast is based on a projection by the Food Marketing Institute and Nielsen that an additional $100 billion in annual grocery sales will be conducted online by 2022. That will likely mean big changes for the cold-storage industry, which at 3.6 billion cubic feet currently accounts for just a tiny slice of U.S. industrial-and-logistics real estate overall.
Source: cnbc.com