October 23 2024 0Comment

NAIOP I.CON COLD 2024 Key Takeaways

Alston Construction was proud to be a NAIOP I.CON Cold Conference Silver Sponsor. I.CON Cold brought together industry leaders to discuss the latest trends, challenges, and innovations in cold storage construction and operations. As this niche sector continues to evolve, it’s clear that flexibility, sustainability, and technology are shaping the future of cold storage facilities. From emerging trends in design to the biggest challenges on the horizon, here are the top five takeaways you need to know to stay ahead in this rapidly growing market.

1. A Niche Sector: Cold storage can be defined by asset classes to help determine the design, functionality, operation, etc.

  • PRW (A vertical of Cold Storage); Public refrigerated warehouse (PRW), in which third-party logistics (3PL) companies operate facilities for food manufacturers and processors.
  • Manufacturing and food processing; where product is leased and operated by the tenant.
  • Grocery/E-Commerce, where traditional grocery and food service providers distribute product.
  • Pharma and Life Science 2; used for medical services.
  • 2. The overall design and site selection depends on the asset classes because it will determine the unique needs and the operational needs. Cold storage facilities need to be as flexible as possible. Design Build is more ideal and cost effective for cold storage operators rather than formatting a plan and spec design.

  • Plan and spec development is increasingly difficult because the design and operations are all unique and different.
  • 3. New Trends in Cold Storage Design and Construction: Increased technology highly affects safety in a positive way. Trends in energy efficient designs:

  • Refrigeration systems (CO2 uses less water, etc.) Biggest challenge is the locations for roof refrigeration equipment due to penetrations into the Cold Storage space and functionality needs of the owner.
  • Solar added to Cold Storage package. Biggest challenge with solar panels for Cold Storage is the roof penetrations. There are cost savings with the panel thickness (Thicker panel = More cost savings)

    Insulated Concrete System vs. IMP

  • 6” IMP will have 3x the R-value than an insulated concrete system.
  • When doing exterior IMP, quality control has to be a priority to avoid vapor leaks and ensure that the details are accurately installed.
  • 4. Going Green:

  • New trends are developing based on updated sustainability requirements or needs. For example: Retention Pond water being used for refrigeration equipment and fire suppression in these spaces.
  • Sustainable Development Challenges: Power/Electricity is the number one challenge with Cold Storage facilities.
  • 5. Biggest Challenges in the Next 5 Years:

  • Rising energy costs – Changes in refrigeration
  • Regulations (State by State basis)
  • Labor (quality control, skilled and experienced labor)
  • Demand has slowed because of challenges in the economy and increasingly high interest rates making the leasing decisions drawn out.
  • Slowing being fueled by fears in a high-interest rate environment and an election year.
  • Cold storage differs from other products, and it takes longer to do deals.
  • Patience is lower/ the dollar value is larger.
  • Modernization in the supply chain, particularly in cold storage buildings, is driving energy costs down by 50%.
  • Still a high demand for cold storage across vertical markets and expected to go up in 2025.
  • The key is “the right partners;” – You must have the right partners in equity, debt, development and construction to be successful in this market.
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