One particularly frigid niche of the commercial real estate sector is white hot with popularity. Cold storage is booming, and the Wall Street Journal reports that refrigerated storage space construction is on the rise. Even before tenants are lined up, developers are adding millions of square footage of cold storage space to the market.
Why is Cold Storage Construction on the Rise?
The pandemic changed the way we move through our day-to-day activities, and the way people shop for groceries was a part of that shift. Even though COVID-19 is largely under control in the U.S., certain habits are here to stay. In addition to lumber, auto parts, and baby formula, frozen food was a high-demand product. During the pandemic, grocery shoppers stocked up on frozen goods to lessen their trips to stores in uncertain times. Although people are back in the aisles, it's unlikely their need for frozen food will slow down.
It's also worth noting that old cold storage space is outdated, and new construction will outpace existing structures in energy efficiency. Of course, that doesn't mean new construction doesn't face its own hurdles, with supply chain issues experiencing relentless snarls over the last few years.
What Does the Future of Cold Storage Look Like?
While experts don't think there will be a huge slump in cold storage needs, they do note there are signs that the market is no longer growing at the speeds it has been over the past year. Some of the evidence used to cite this potential slowdown is the reduction in costs of refrigerated trucks. While the need for cold storage may be leveling out in some areas, it seems like the need will remain and even increase in hotter states in the American Southwest.
Talk to an Experienced New York Real Estate Lawyer
If you're looking for advice concerning your real estate portfolio, contact the office of Melvin Monachan, Attorney at Law. Whether you need help developing a foreclosure defense strategy or hoping to close on commercial real estate deals, call (347) 389-1682 today or contact us online.