The coronavirus pandemic figures to accelerate what had already been a growing trend — the need for additional cold storage space to meet the demand for online grocery sales.
Investors increasingly are warming up to the cold storage warehousing sector in New Jersey and other major markets — despite ongoing challenges in the asset class — pushing cap rates for Class A facilities closer to those of traditional high-quality warehouses.
Demand for cold storage warehouse space nationwide, and particularly in the Garden State, is on fire, largely because of rising online fresh grocery sales and changing consumer preferences for fresher foods. Meeting that demand could prove challenging — given the cost and complexity of such projects and the need for specialization — but some developers are positioning themselves to be ready when users come calling.
With the growth of online grocery sales projected to continue, a new report says New Jersey is well-positioned to capture the continued need for cold storage space.
New Jersey remains one of the nation’s most underserved markets for cold storage space, despite its potential to share in the expanding market for fresh food and online grocery delivery.