The cold storage industry is no stranger to cycles, but 2024 felt like a turning point—a year of growing pains that set the stage for something bigger. Frostbite, a recently released must-read for anyone in the cold storage space, detailed the history of food refrigeration and cold storage. The cold storage industry as a whole is storied, yet the modern cold storage era is only now finding its footing. Last year tested the industry’s resilience, and 2025 promises to reward it with exciting momentum. The future, as I see it, looks undeniably bright. 

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Looking back, 2024 was a proving ground. Nearly unrestrained ground-up development flooded some markets with cold storage capacity, while pallet occupancies dipped—a sign of speculation meeting reality.

On the warehouse operator side, consolidations from years prior and a major IPO continued to reshuffle the deck, with key players tightening their grip. On the leasing front, operators were hesitant, as tenants weighed options and food manufacturers, still jittery from the supply-chain and inflation crisis, pared down inventories and sat on the sidelines.

It is widely cited that roughly 75% of temperature controlled warehouses are occupied by end users. Given that their activity is predominantly determined by consumer sentiment, it is no wonder that as they felt inflationary pressure, leasing activity – which is to say expansion of production – ground to a halt.

However, all of these headwinds weren’t failures, but symptoms of an industry stretching into modernity. The data backs this up. Industry reports pegged vacancy rates rising upward in key hubs like Dallas and Southeast port markets.  Yet amid the turbulence, operators adapted — and the survivors are leaner and more resilient for it.

2025: Tailwinds and a New Frontier

Now, turn the page. The year ahead looks less like a recovery and more like a launch pad. Start with the macro: interest rates are trending lower this year, loosening capital for development and acquisitions. Liquidity is deepening as institutional investors, once inexperienced and uninformed, become more familiar with the industry and all of its nuances. Cold storage investing is being treated as infrastructure investing rather than an esoteric member of the real estate food groups.

Operators, too, are getting smarter. The most innovative ones are adopting technology like automated racking, smarter energy-efficient refrigeration, and AI powered warehouse management systems to improve and maximize operations.

But the real story is broader. Onshoring is no longer a buzzword—it’s becoming a mandate. American manufacturing is flexing its muscle again, spurred by consumer confidence and a regulatory environment that’s shedding its hostility. Tariffs, though, remain a wild card—confusing, inconsistent and a big question mark that only heightens the eagerness to bring food production and distribution back home. Inflation, while not tamed, is at least hobbled, giving producers and consumers room to breathe.

The USDA projects a 4% uptick in domestic food production for 2025 and with it comes demand for cold storage that’s nimble and category specific, not just big and modern. We’re betting this convergence—tariffs and all—will push industry activity to heights unseen since the cold storage banquet of 1911, when railroads and icehouses fueled a refrigerated revolution.

What does this mean in practice? For one, capacity will finally tighten again. The speculative spree of recent years is moving towards targeted build-to-suits. Many of these new builds will be smaller facilities that are closer to urban cores. Think 100,000-square-foot hubs with processing, not just pallet density focused warehouses.

I’m bracing for a busy 2025—more site visits, more deals, more hours squinting at screens. We suspect the same is true for the supply chain managers, operators and manufacturers reading this. If 2024 was about weathering the storm, 2025 will be about seizing the sun. The year ahead does indeed look bright.