Let’s Talk About Construction Pricing (then and now)
The landscape has changed for developing cold storage/food processing facilities.
Supply chain issues at the onset of COVID-19 increased the need for efficient, modern food facilities in strategic gateway markets. However, with little to no existing supply available, food companies had to utilize a 3PL or find another creative solution to satisfy increased consumer demands.
The food companies wanting to avoid the highly consolidated and costly 3PL industry might look to building their own cold storage facility, although labor shortages and inflationary pressures continue to make it harder. Despite a strong appetite for cold storage assets, there is more uncertainty to build them than Pre-COVID due to a swiftly changing debt market, lasting supply chain issues, a crisis in Europe, and rising construction costs.
Change in Average Warehouse Construction Costs (PSF)
| PRE-COVID | CURRENT MARKET | |
|---|---|---|
| General Warehouse (32’-36’) | $50-$75 | $85-$125 |
| Conventional Cooler (50’) | $110-$140 | $200-$250 |
| Conventional Freezer (50’) | $140-$180 | $200-$275 |
*50-60% increase compared to pre-COVID pricing.
Our team will help answer the
important questions:
What does it cost to build a facility now?
How much time and money could be saved on a Retrofit?
Which investors / developers are still building, and where?
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