Well, it was a great couple years and a very comforting refuge in the commercial real estate storm but all good things get overbuilt come to an end.
First up, from the Wall Street Journal, March 11:
The market for cold storage is heating up as the largest players in temperature-controlled warehousing move deeper into global food supply chains.
Lineage Logistics LLC, the largest refrigerated-storage company in the world by space, has raised $1.9 billion in a funding round that will help back additional acquisitions, build new facilities and develop warehouse automation technology, the company said Thursday.
The round brings Lineage’s valuation to around $18 billion, according to a person familiar with the matter. Participants include real-estate investor BentallGreenOak, hedge fund D1 Capital Partners and Oxford Properties Group, which helped develop the Hudson Yards complex in Manhattan.
Novi, Mich.-based Lineage, which is controlled by San Francisco-based investment firm Bay Grove, has raised a total of $4.3 billion in equity since January 2020.
Over that period the coronavirus pandemic upended food supply chains and accelerated the adoption of online grocery shopping, fueling greater demand for cold-storage facilities.
“There’s more inventory in more places. That’s one of the tailwinds for cold chain,” said Lineage Chief Executive Greg Lehmkuhl.
Consumers are buying more fresh and frozen food to prepare at home. Mr. Lehmkuhl said he also expects pent-up demand for eating out to drive additional volumes through restaurant and food-service supply chains as more people get vaccinated. “We are already seeing higher order patterns to supply for the unlock,” he said.
The funding comes as Lineage and rival Americold Realty Trust Inc., the only publicly traded cold-storage real-estate investment trust, have been on an expansion spree, snapping up smaller operators to gain share in a highly fragmented global market.
Atlanta-based Americold closed on $2.6 billion of acquisitions last year, including a $1.74 billion deal for Agro Merchants Group, then the fourth-largest refrigerated warehousing provider globally. Americold generated $1.99 billion in revenue in 2020, up 11.4% from the previous year.
Lineage completed 38 acquisitions last year, adding temperature-controlled capacity across 11 countries and also buying refrigerated railcar operator Cryo-Trans.
Americold controls about 5.6% of the global market compared with Lineage’s 7%, according to capacity rankings by the International Association of Refrigerated Warehouses. “There’s plenty of room for both of us in this market,” Mr. Lehmkuhl said....
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A few months ago we saw private equity kingpin Cerberus join the party.
From Bloomberg, December 8:
Cerberus Capital Management is entering a joint venture to build a multibillion-dollar portfolio of cold-storage facilities, seeking to capitalize on rising demand for warehouses to accommodate the food supply chain.
The alternative-asset manager is partnering with Provender Partners, a Newport Beach, California-based investor in refrigeration real estate, the companies said in a statement Tuesday. They aim to acquire properties across the U.S. for food-related tenants.Industrial warehouses, including cold storage facilities, are among the best-performing categories of commercial real estate as hotels, malls and offices face uncertain futures in the wake of the coronavirus pandemic. Demand for new industrial space is expected to exceed 1 billion square feet (93 million square meters) by 2025, according to a July report by Jones Lang LaSalle Inc.
“The cold-storage industrial segment plays an integral role in the U.S. food supply chain and we see strong opportunities to build on the market dynamics,” Tom Wagner, Cerberus’s head of North American real estate, said in the statement.
Cold-storage facilities, data centers and distribution centers will continue to outperform in the warehouse sector next year, Amanda Ortiz, an analyst with Colliers International, wrote in a note Tuesday on the outlook for industrial real estate.
Cerberus is committed to investing for at least five years, Provender Chief Executive Officer Neil Johnson said in an interview. His company has acquired 5 million square feet of refrigerated real estate since its founding in 2014, and counts Apollo Global Management Inc. among its investors....
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If interested last week's "Real Estate: "Logistics warehouse tenants should brace for 10% rate hikes — CBRE"" has quite a few of our links on cold storage and warehouses in general, it was a good run.
