Cold Storage: Essential infrastructure in the global food supply chain

Cold storage facilities can play a critical but often underappreciated role in the global food supply chain. From fresh produce and protein products to frozen and prepared foods, cold storage enables food to move efficiently, safely, and reliably from producers to end consumers.

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Key takeaways

  • Essential infrastructure within the global food supply chain - Cold storage facilities play a critical role in preserving and distributing food, supporting reliable, necessity-driven demand tied to how food is produced and consumed. 

  • Specialized assets with high barriers to entry - Temperature-controlled environments, energy intensity, and operational complexity create meaningful construction and operational barriers relative to traditional industrial real estate.  

  • High tenant reliance supporting long-duration occupancy - Facilities are deeply embedded within distribution networks and costly to replicate or relocate, contributing to longer tenant tenures and alignment with long-term leasing structures.  

  • Demand driven by structural, non-discretionary trends - Population growth, evolving diets, and the rise of grocery e-commerce continue to increase the need for temperature-controlled logistics infrastructure across the food supply chain.

Structural tailwinds supporting long-term demand

As population growth, evolving consumption patterns, and the rise of grocery e-commerce reshape how food is produced and distributed, demand for specialized, temperature-controlled logistics infrastructure has increased.1 Unlike traditional industrial real estate, cold storage assets are highly customized, capital-intensive, and operationally complex, reflecting characteristics that create meaningful barriers to entry and high switching costs for tenants.2

These same attributes, we believe, can make cold storage particularly well suited to a net lease real estate framework. Facilities are mission- critical to tenant operations, deeply embedded within distribution networks, and costly to replicate or relocate. As a result, tenants often prioritize long-term occupancy and are willing to commit to extended lease terms, particularly in newer vintage assets that offer superior energy efficiency, automation, and operating cost advantages over aging infrastructure.2

Cold storage combines the characteristics of industrial real estate with the economics of essential infrastructure.

Cold storage facilities are embedded at multiple points across the supply chain, supporting the safe and efficient movement of food from origin to end consumer. 

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Not just your average warehouse

Key differentiators include:

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High capital intensity driven by refrigeration, automations, and energy needs.

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Operational complexity tied to food safety and throughout requirements.

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High switching costs, as facilities are deeply embedded in distribution networks.

While cold storage facilities may resemble traditional industrial warehouses, they operate as highly specialized infrastructure assets with distinct economic and leasing characteristics.

Cold storage facilities require controlled—and often sub-zero—environments supported by specialized insulation, refrigeration systems, and power infrastructure. These requirements materially increase construction costs and operating complexity relative to conventional industrial assets, making facility design and efficiency central to tenant economics.

A specialized sector undergoing structural evolution


Market context

U.S. 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.3 Today, the property type is in a period of generational change driven by advancements in technology, resulting in elevated development activity and greater dispersion across assets. Modern, well-located facilities continue to demonstrate stronger operating performance, reinforcing the importance of asset quality and long-term positioning. Newer vintage assets have generally demonstrated stronger operating characteristics relative to older stock due to:

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Superior energy efficiency

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Automation readiness

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Lower operation costs and higher throughput

These dynamics support longer tenant tenures and align closely with long-duration net lease structures.

 

Structural demand drivers

Cold storage demand is driven less by discretionary consumer spending and more by how food is produced, distributed, and consumed, reflecting factors that tend to be more resilient across economic cycles.

Key long-term demand drivers include:

  1. Population growth and evolving diets, supporting fresh and frozen food demand.

  2. Grocery e-commerce and food delivery, increasing the need for temperature-controlled logistics

  3. Rising food safety standards and labor constrains, accelerating automation and reinvestment


Together, these trends position cold storage as necessity-driven, mission-critical infrastructure, well suited to net lease real estate strategies focused on durable occupancy and long-term cash flow visibility.

 

Net Lease applied: cold storage

Cold storage operators face significant capital demands, particularly as facilities become more automated and energy intensive. Net lease structures, especially build-to- suit and sale-leaseback transactions, have become important tools for supporting tenant growth by:

  1. Financing construction and specialized capex

  2. Preserving tenant operating cash flow

  3. Supporting long-term occupancy of mission-critical facilities


From an investment perspective, cold storage sits at the intersection of industrial real estate and essential infrastructure and may appeal to investors seeking:

  1. Mission-critical assets with high tenant reliance

  2. Long-duration leases supported by high switching costs

  3. Cash flow durability tied to essential economic activity


While assets are purpose-built, modern cold storage facilities remain highly sought after across the food supply chain, supporting long-term value and re-tenanting optionality.

Viewed through this lens, we believe cold storage represents, for investors, a specialized but highly compelling extension of net lease real estate investing, that may support income durability.

 

Current conditions tend to favor:

  1. Modern, well-located facilities with efficient designs

  2. Assets priced below replacement cost

  3. Long-term investors able to underwrite complexity and partner with tenants


For net lease investors, this environment has created improved entry points into a sector with strong long-term fundamentals.

Conclusion

Cold storage real estate sits at the intersection of industrial logistics and essential infrastructure. Demand is shaped by how food is produced, distributed, and consumed, while supply is constrained by the specialized requirements of temperature-controlled facilities.

These dynamics support tenant reliance, long-duration occupancy, and alignment with net lease structures, positioning cold storage as a differentiated segment within real assets that may offer durable income characteristics over time.

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Endnotes

  1. Source: U.S. Department of Agriculture, Cold Storage Report (2025); Food Logistics, Industry Reports and Analysis (2025).
  2. Source: CBRE, U.S. Cold Storage Market Outlook (2025); JLL, Cold Storage & Temperature-Controlled Logistics Report (2025).
  3. Source: Newmark U.S. Cold Storage Market Overview (2025).
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