Arthur Rasmussen, Jr., Senior Vice President at CBRE
The rise of online grocery shopping is bringing with it increasing demand for warehouse space in Southern California.
Those changes in the way people shop for food have created a growing market for refrigerated space within the red-hot industrial landscape in Los Angeles and throughout California. The state remains the biggest user of cold storage with 16.5 million square feet, according to the Los Angeles Times, and the ports of Los Angeles and Long Beach have more than doubled their refrigerated container capacity in recent years.
Space in a typical 100,000-square-foot cold warehouse is about $150 a square foot per year, according to CBRE, which is triple the rent for a standard warehouse. Firms like United States Cold Storage and Lineage Logistics, the biggest player in the cold storage game, have warehouses in Los Angeles County and plans to expand.
Cold storage space currently makes up a small portion of the total industrial space, but it’s set for a jolt, and is expected to help keep the industrial market going strong. The U.S. will need to add 100 million square feet of new cold storage space over the next five years to keep up with demand, CBRE said.
That projection stemmed from the Food Marketing Institute and Nielsen forecast that groceries ordered online will account for 13 percent of total grocery sales by 2022, up from 3 percent last year. That spike would amount to an additional $100 billion in annual grocery sales online. [LAT] — Gregory Cornfield