The $1 Billion Bet to Get Us Our Steak and Ice Cream

livemint.com:

Related, the well-known investor in office towers and apartment buildings, is wagering $1 billion on a niche real-estate sector often associated with frozen pizzas, steaks and yogurt. An affiliate of the New York-based firm is launching a business called RealCold, a network of cold storage distribution facilities that aims to benefit from the rise in online grocery shopping and America’s evolving eating habits. RealCold plans to break ground later this year on its first two cold storage locations, in Lockhart, Texas and Lakeland, Fla.

The more than 300,000 square-foot warehouses will be able to stock food at temperatures ranging from minus 20 degrees to 55 degrees Fahrenheit, storing everything from ice cream to lettuce. The cold storage sector has long been a specialized corner in the $20 trillion commercial real-estate industry. But it is gaining traction with big property investors like Related and others, who believe that changes in the supply chain and the growing number of consumers who want more local food and diverse brands will boost this business.

And while e-commerce and the rise of remote work have upended other commercial real estate businesses like office buildings and retail, Related executives contend that online activity won’t create comparable cracks in demand for cold storage. “You can’t store food on the internet," said Michael Winston, managing director of Related Fund Management, the affiliate of Related that will own the new cold storage business. Still, cold storage is experiencing big changes, much of it driven by technology.