Cold storage is a “big boys” game.

There is a real need for this type of space and there is limited options out there for these users so if you’ve got it when they need it you can command those big rents.

Rents that you can capture in this space are high and can range from $12 all the way up to $25 depending on the condition and market.

But you get those big rents because you have big mechanical systems and with big systems comes even bigger cash requirements. Blink and you’ve spent $1 million.
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There’s a complex set of intertwined systems that make these cold spaces work, including; in floor heating, evaporators, chillers, increased power/transformers, high speed roll up doors, and much more.

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One little know sub sector of industrial is cold storage. This may sound simple but in practice it is more than just turning up a bunch of HVAC units to blow cold air.

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I think a lot of us were wondering when this might start, given the interest rate cuts, but it seems as though that time is now.

Is anyone else seeing this?

Don’t be afraid, especially early in your career, to take on some of the tougher assets, that’s where you will have the best chance to be creative, learn, and most of all prove yourself.

Leasing, capital, financing, operations, etc all play a role in the recovery phase of an assets life cycle.

Sure it can be stressful at times but whoever said growth was easy?!
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Now some will argue what’s the issue with this if they are still making bank and doing deals. The simple answer is if you aren’t cold calling directly to tenants you cannot say you are serving your client in the best way possible.

Don’t get me wrong, I know there are numerous brokers who do the work but I suspect if you had a truthful survey the vast majority of leasing brokers wouldn’t have done more than 10 true cold calls in a year.
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when I ask who they spoke to they tell me “oh their broker at JLL”

That is not a cold call. I know there are rules of thumb and generally accepted practices when contacting tenants but don’t tell me you contacted the tenant if you called their broker.
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Take a look at Ontario…most multifamily investors around the world won’t come here due to rent control and other hyper renter favoured policies (failure of the landlord tenant board).

The savings from rent control tend to accrue disproportionately to households who are in the right place at the right time or who are in higher income brackets.

Shall I go on? 👇

Decrease affordability in the long term 

Fuel gentrification 

Create negative externalities on the surrounding neighborhood 

Reduce the supply and quality of the rental stock.

Disincentivize new construction.

Affect housing providers' investment and development plans. 👇

Sure rent control can help make housing more affordable for current tenants. It can also prevent price gouging. 

BUT…let’s discuss some of the proven longer-term drawbacks of rent control: 👇