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Cold storage construction heats up amid pandemic

Feb 25, 2021 (0) comment , , ,

Tool and Equipment Insurance protects high-value, moveable equipment. It is ideal for contractors and other businesses that take their own tools to work sites.

The cold storage business is booming.

Whether it is COVID-19 vaccines or fresh and frozen foods on their way to restaurants, grocery stores or direct to consumers, there is a growing volume of items that need to be kept at a cool or freezing temperature.

Before the pandemic, demand for cold storage facilities, driven by consumer habits that have seen a shift from shopping in brick and mortar stores to ordering online for home delivery, was on the rise. The pandemic simply accelerated that trend.

And it’s not just new demand that is driving the cold storage construction market. A September 2020 report from real estate services and investment management firm JLL estimated that more than 78% of the cold storage building supply at that time was built before 2000. The outdated designs used in many of those facilities do not have the space necessary for modern logistics and racking and are not as energy efficient as their newer counterparts so customers are eyeing replacement facilities.

Among newer projects, the type of facility is changing somewhat. In addition to large regional facilities, owners and developers are building microfulfillment centers, said Matt Hirsch, president of Primus Builders. While these smaller structures further reduce the distance between the product and the end customer, they aren’t replacing regional ones.

“There still needs to be regional distribution centers to supply the microfulfillment centers,” he said.

Future projects could also include conversions of a portion of grocery stores into microfulfillment facilities, according to Hirsch.

“You have to be close to where people are in order to meet the demand,” he said.

Part of the latest demand is space for COVID-19 vaccine, which has different requirements depending on the manufacturer. The Moderna vaccine arrives frozen between -13 degrees and 5 degrees F and must be kept at that temperature range until the expiration date. Once thawed, it can be kept for 30 days at between 36 and 46 degrees.

The Pfizer-BioNTech vaccine, however, arrives frozen at a temperature range of between -112 and -76 degrees and, if it is to remain frozen, must be stored in a facility able to maintain that range or remain for a limited time in the special shipping container. Before mixing, the vaccine can be kept for up to five days at between 36 and 46 degrees. Once mixed, the vaccine must be used within six hours, all the while kept at temperatures between 35 and 77 degrees.

Pfizer announced Feb. 19 that it had submitted new data to the U.S. Food and Drug Administration showing that the vaccine could also be stored safely for up to two weeks at temperatures of between -13 degrees and 5 degrees. Pfizer has proposed this information be included in an update to its vaccine’s prescribing information.

New developments

Contractors in the sector are finding that there is plenty of demand. According to a 2019 report from commercial real estate and investment services firm CBRE, the market can support 100 million square feet of new construction through 2024. To that end, there have been several new cold storage projects announced in recent months.


This article was originally written by Kim Slowey and appeared here.

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