The increase, CBRE said, will help create demand for up to 100 million square feet of cold storage space over the next five years.
And with 136.7 million square feet of inventory, New Jersey has ranked among the Top 10 cold storage states in the nation, CBRE said.
“Given the ongoing trend of increased demand for frozen and refrigerated food space in well-located gateway markets serving millions of online and brick-and-mortar grocery consumers, New Jersey continues to see strength in the sector,” David Gheriani, vice president, CBRE, said. “Consumers’ increasing use of online ordering and grocers’ investment in new delivery strategies and warehouse technologies will continue to drive this trend.”
Groceries ordered online are projected to account for 13% of total grocery sales by 2022, up by 3% from 2018, according to a recent report from the Food Marketing Institute and Nielsen. This would account for an additional $100 billion in annual grocery sales conducted online.
This outlook could positively impact the industrial cold storage industry, which accounts for a small portion of U.S. industrial-and-logistics real estate overall (3.6 billion cubic feet), CBRE said. Much of the growth is likely to occur in markets such as New York/New Jersey and Los Angeles.
“Several factors have combined to fuel expansion of the cold-storage space, from consumers’ increasing use of online ordering for groceries to grocers’ investment in new delivery strategies and warehouse technologies,” Adam Mullen, CBRE’s industrial and logistics leader in the Americas, said. “Still, the sector’s growth will be somewhat measured because these are specialized facilities requiring significant capital, power and government approvals.”
Here are the Top 10 states for cold-storage space:
- California, 396.5 million cubic feet;
- Washington, 271.3 million cubic feet;
- Florida, 259.4 million cubic feet;
- Texas, 231.4 million cubic feet;
- Wisconsin, 228.1 million cubic feet;
- Pennsylvania, 213.5 million cubic feet;
- Illinois, 188 million cubic feet;
- Georgia, 183.5 million cubic feet;
- Oregon, 139.6 million cubic feet;
- New Jersey, 136.7 million cubic feet.
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