The Edge - Volume One

COLD STORAGE IS HOT AND GETTING HOTTER Revenues for the cold storage industry are projected to increase at an annualized rate of 3.6 percent to $6.3 billion from 2017 to 2022, according to IBIS World Industry Report on Refrigerated Storage in the U.S. With the long-term trends of increased demand for cold storage space and low interest rates, investors, including REITs, are looking to add cold buildings to their portfolios to increase diversification within the sector. The MetLife Cold Storage Industry Outlook reported the capacity of cold storage in the U.S. has increased 43 percent since 2000 due to construction of larger facilities. Profits in the cold storage industry have also increased 83 percent over the last five years, according to the same report, further motivating investors to capitalize on this type of product. Cold storage third party logistics providers (3PLs) are leading technological advancements in refrigeration and building construction. According to the USDA’s Capacity of Refrigerated Warehouses summary, 3PLs currently account for 79 percent of all refrigerated cold storage space in the U.S. Private equity investors have been eyeing the sector and have recently made large investments in cold chain 3PLs, further pushing growth in construction and acquisition of existing facilities and operators. A WINNING RECIPE The busy, health-conscious person can finally catch a break. Feeding the family is as easy as firing up a phone or computer to order groceries or a meal kit subscription. Food companies are winning by shifting to meet the changing demands of the people to maintain relevance and profitability. However, the biggest winner is probably the cold storage industry, as it will likely continue to gain momentum. Being cool has never been so hot.

83% Profits in the cold storage industry have increased OVER THE LAST FIVE YEARS

ROB HALL International Partner Logistics & Industrial – EMEA, Global Occupier Services rob.hall@cushwake.com

BETHANY CLARK Senior Managing Director

Strategy & Operations, Logistics & Industrial Services, Americas bethany.clark@cushwake.com

KEN REIFF Co-Lead, Food & Beverage Advisory Group ken.reiff@cushwake.com

CHRIS COPENHAVER Co-Lead, Food & Beverage Advisory Group chris.copenhaver@cushwake.com

* All dollar amounts listed are in USD.

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