Cold Storage: Getting Ahead of the Trend
With a limited supply of small bay cold storage across Miami-Dade, cold storage facilities represent a good investment opportunity with value-added potential. That’s the case of two cold storage properties in Doral and Miami I recently brought to the market.
Located at 1375 NW 89th Court, the Doral facility consists of 18,152 square feet with 16 separate bays, each with their own dock-high loading area. With no vacancies at the moment and the majority of tenants having rented for over 10 years, the building is a crucial and convenient hub for established seafood and meat industry vendors serving the local community, MIA and the Port of Miami. The asking price is $3 million, with a projected cap rate of 10.11 percent.
Located at 500 NE 185th Street, the Miami facility consists of 28,500 square feet with 22-dock-high loading bays each measuring 1,000 square feet. With no current vacancy, the building features 6,500 square feet of upstairs office space provided for tenants utilizing the freezer space. The asking price is $3.5 million, with a current cap rate of 10.38 percent and significant national and international development potential in the next decade.
According to a 2016 report released by Deerfield Beach-based Zion Research, global demand for the cold chain market was valued at $110.2 billion in 2014 and is expected to reach $271.9 billion in 2020. The report notes that advancements in health care and pharmaceutical delivery, increasing demand for frozen and chilled food & beverages due to shifting lifestyle patterns and an expanding population are fueling demand for cold chain storage. That is particularly true in South Florida, where suburbs are rapidly becoming urbanized.
Both properties are strategically located near major highways, with easy access from Miami Gardens to Interstate 95 and from Doral to State Road 836 and Dolphin Expressway, giving access to Miami International Airport and Port Miami.
What makes these niche opportunities valuable is their strategic location in submarkets with high barriers to entry and the fact the demand for this type of assets exceeds supply.