Investors are warming up tocold storage asset investment, and as a result, cap rates arepushing closer to that of high-quality warehouses, according to areport from CBRE. Los Angeles is one of the topmarkets for cold storage, with a 4% vacancy rate, among the lowestin the country. As a result of the opportunities in the market,cold storage has seen an influx of new capital and investors.

"The draw of strong demographics driving food sales, food safetydemands putting additional focus on the cold chain and scarcity ofavailable cold storage inventory due to the lack of speculativedevelopment has made investors more comfortable with cold storageinvestment," Art Rasmussen, SVP at CBRE, tellsGlobeSt.com. "Wall Street is warming up to investment in the foodsector, reducing the perceived risk premium and tightening of caprates."

The low availability of cold storage in Los Angeles is notsurprising, considering that there is a lack of supply in mostindustrial categories in the market. "Due to the overall high costof construction and lack of speculative building, there are veryfew alternative in the market for new or growing food companies,"says Rasmussen. "Until recently, buildings were developed mainlyfor owner users, and now, with e-commerce in play there is a muchhigher demand from emerging food users as well as prepared foodsbrands -more than ever before."