Cold Storage Continues to Dominate the Industrial World

OAKLAND, CA—The cold storage industrial segment has always played an integral role in the US food supply chain and that has never been truer than during the past 10 months and counting. As a result, many companies are capitalizing on cold storage opportunities which build on these market dynamics.

Refrigerated real estate investor Provender Partners has entered into a joint venture with an affiliate of Cerberus Capital Management LP, a global alternative investor. The partnership will focus on building a multibillion-dollar portfolio of cold storage processing facilities in the United States, while bringing vital supply chain solutions to market. And, the joint venture will focus on a broad range of US acquisition opportunities across all markets.

“Together with Provender Partners, we will be able to acquire and enhance cold storage facilities across the United States to build a national portfolio of high-quality assets and meet the critical needs of food-related tenants,” says Tom Wagner, head of North American Real Estate at Cerberus.

Since its founding in 2014, Provender Partners has acquired nearly $500 million of refrigerated real estate totaling 5 million square feet. Cerberus Real Estate has a track record of investing across asset classes, property types and geographies, and has deployed approximately $29 billion of equity in more than 575 international transactions.

“Beyond expanding our portfolio, the partnership will broaden our ability to help farmers and distributors as global conditions continue to impact the food supply chain,” said Neil A. Johnson, founder and CEO of Provender Partners. “As processors and warehousers seek efficiency and geographic diversity, we look forward to delivering innovative, quality food supply chain solutions.”

The investment also enables Provender Partners to bring proprietary solutions to market. Its Strategic Break Bulk Freezer Facilities program, for example, creates an expansive network of refrigerated buildings designed to respond to market conditions, helping to offset future disruptions. The first-of-its-kind-program enables farmers and food processors to pivot between bulk and individual packaging to eliminate waste, saving billions of dollars, and provide farmers alternative solutions for products during times of uncertainty.

“An abundance of raw materials and large population base make California a primary target for our growing portfolio of cold storage and processing facilities,” Johnson tells GlobeSt. “Texas, with its business friendly environment, rapidly growing population and central US location that accommodates both coasts, is our second largest target.”

The Global Cold Chain Alliance’s recent survey analyzes the business impacts of COVID-19 on companies comprising the global cold chain. The report provides critical data about some of the global ripple effects on socio-economic activity of the cold chain industry. Alliance members store more than 260 billion pounds of perishable foods each year, with an annual economic impact of $6.1 billion (estimated revenue generated by the refrigerated warehousing industry).