Here’s something cool you probably haven’t heard much about up to this point, cold storage construction is on the rise, and it’s presenting contractors with the opportunity to diversify their commercial portfolio in a unique way. Without cold storage, we wouldn’t be able to keep foods refrigerated or frozen, which would be a tremendous problem for our hungry populace.
According to Coldwell Banker Richard Ellis (CBRE), the spike in demand for cold storage construction is the result of a variety of factors, namely a 24 percent increase in food sales over the last five years. People are getting hungrier, and we need to make sure the food they eat is safe. Cold storage is one of the main solutions to this problem. And as online grocers continue to grow in popularity, the need for commercial cold storage facilities will only increase. That said, this sudden shift in demand for cold storage presents new challenges for the contractors that will be needed to construct them.
In this brief article, an Orlando construction law attorney from Cotney Construction Law will discuss this recent building trend and how contractors can capitalize.
Up until now, cold storage construction has presented contractors with significant logistical problems that barred non-specialists from participation. Cold storage construction is expensive, complex, and requires a high level of expertise. The average cold storage project costs two to three times more than a comparable warehouse project. Cold storage buildings need to be taller, up to 24 feet taller than their warehouse counterparts, to facilitate high volume material handling and other operations issues.
Time is also a concern. The complex metal panel construction required to insulate these buildings can tack on an extra five months to the project timeline. For contractors juggling multiple projects at once, this can create a feasibility issue that throws a wrench in your contract procurement process. Material sourcing is also problematic. Do you currently have a supplier for vertical dock levelers to keep temperatures regulated? What about fire protection equipment and ammonia systems for refrigeration or package units? Supply constraints could prevent your firm from taking part in the cold storage construction boom.
Overcoming the Challenges
Even though there are prohibitive obstacles for contractors hoping to cash in on the cold storage craze, many firms are still moving forward. In fact, there is an estimated 4.5 million square feet of cold storage currently in development. That’s approximately 1.5 percent of total U.S. industrial construction! Updating existing cold storage buildings will also keep contractors on their toes. Older facilities need maintenance, and contractors have the skills and expertise to service them accordingly.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.