June 10, 2019
Any doubt that the rapid rise of e-commerce is causing ripple effects across the economy can be easily removed by a closer examination of the commercial real estate industrial sector. The growth of online grocery sales has the U.S. market for cold-storage warehouses poised for strong growth, potentially creating demand for up to 100 million square feet of cold-storage space over the next five years, according to a new report from CBRE.
That forecast stems from a projection by the Food Marketing Institute and Nielsen that groceries ordered online will account for 13% of total grocery sales by 2022, up from 3% in 2018. Such growth would amount to an additional $100 billion in annual grocery sales conducted online. Click here to view an interactive map of consumers’ likelihood to buy groceries online across the U.S.
This outlook portends significant changes for the cold-storage industry, which at 3.6 billion cubic feet (an estimated 214 million square feet) currently accounts for a tiny portion of U.S. industrial-and-logistics real estate overall. Much of the cold-storage sector’s growth is likely to occur in gateway markets like Los Angeles and the New York area, as well as leading food-production states such as Illinois, California, Washington state, Florida, Texas and Wisconsin.
CBRE’s Matthew Walaszek predicts, “Few sectors of commercial real estate will undergo as much transformation in the coming years as the cold-storage industry, due to e-commerce’s impact on this previously under-penetrated market. We will see robust demand, further innovation in delivery and automation, and possibly more consolidation among major players.”
Leading States For Cold-Storage Space
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