Speculative Cold Storage is Hot
Growing demand for refrigerated cold storage space, along with increasing investor interest and better understanding of how to build these facilities, is spurring speculative cold storage development.
Today, retrofitting traditional warehouses may be an advantageous way to capitalize on the demand for cold storage as new construction takes time. But, existing cold storage sites are aging, and often lack the qualities of modern cold operations, such as advanced building materials, which cannot be retrofitted, and would not allow for the larger spaces and clearance to stage pallets and racks. Thus, new construction is often preferable to obtaining an older cold storage facility or retrofitting a traditional warehouse.
“Brand new speculative cold storage facilities are trending upwards due to the shortage of cold storage space,” says Tim Nguyen, senior vice president of ESI Group USA. “Current public cold storage facilities are reaching the end of their lifespan and newer, more efficient cold storage facilities are in need.”
Energy Efficiency Through Design
Designing a new speculative cold storage facility depends on preference, location, long-term application, and cost, says Nguyen. Two common strategies can be deployed. The first relies on insulated metal panels as the primary exterior building skin. This design depends on steel columns around the building’s perimeter and increased roof insulation above the deck, offering a continuous thermal and vapor envelope. The second option is called the “box in a box” approach, which uses a precast or tilt-up concrete exterior wall panel that can be load bearing and avoids the need for the perimeter columns. The building’s thermal and vapor envelope utilizes insulated metal panels to line the exterior walls and insulated metal panels are suspended from the roof structure to create a ceiling.
“Whether one chooses concrete or insulated metal panels in walls and ceilings, both will provide an energy-efficient facility, if done properly” says Nguyen.
The Risk of Improper Design
“There are specific design concepts that, if not known, will be applied incorrectly, causing maintenance and operational inefficiencies as well as potentially catastrophic failures,” says Nguyen. For example, he says a lack of proper thermal vapor envelope will cause frost, condensation, and ice build-up. “These issues are difficult to fix and maintain while the rooms are at low operating temperatures, and they will put stress on the refrigeration system, which results in higher operating costs.”
Additionally, improper building design can cause floor and roof failures that will damage the stored product and create safety hazards for working personnel. And, fire protection systems with appropriate alarms for low-temperature environments are very specific to cold storage site and need to be designed and installed properly to ensure product remains shelf stable.
Converting an Existing Site
Designing a new speculative building may be cost prohibitive for some. In that case, an existing speculative dry warehouse that was originally not designed for cold storage can be converted to a refrigerated site or into a food process operation. For refrigerated storage use, installing interior insulated metal panels will create the box-in-box vapor barrier suitable for cold storage. A new refrigeration system can be installed, a larger electrical service can be installed, and in some cases, a fire pump and water tank can be installed. In addition, for a freezer application, the floor slab would have to be removed if an underfloor warming system is required. Also, dock equipment applicable to cold storage applications would have to be installed. Just keep in mind that the existing building height could potentially minimize rack pallet heights and structural steel upgrades may be required to support roof-top refrigeration equipment and ceiling panels.
Converting into a food process operation will pose even more complexities. For example, cleanable wall surfaces and a cleanable ceiling are required. No exposed steel is allowed as it has the potential to rust. Interior steel columns and bracing should be wrapped with insulation and jacketing. All steel within the processing area should be stainless. Multiple floor drains with stainless steel covers will need to be located throughout the area for equipment draining and production clean up. Underfloor plumbing must be separated between process and sanitary waste and concrete floors must be sloped to the drains.
The refrigeration system must provide cooling, heating, humidity, wet-bulb and dry-bulb temperatures, and positive outside air intake to minimize condensation. Electrical utility requirements must power the multitude of process equipment, and flexible electric chord drops from the ceiling at varying intervals allow flexibility for modular equipment in the production space.
“While the modifications are significant, it is more cost effective to retrofit than building a new greenfield process facility, depending on the overall building’s square footage,” says Nguyen.
Design for the Future
What goes up must come down, so experts do expect the need for cold storage will likely slow in the future. Thus, it is wise to design flexibility into a new speculative facility to adapt to future needs. “A refrigerated cold storage warehouse can be just as functional and operational for non-refrigerated use,” says Nguyen. “If designed knowing that, in the future, it may be removed, refrigeration equipment can be installed in a manner to help facilitate removal. And, other infrastructure such as warehouse floors, dock equipment, lighting, and fire protection, all can be readily used for other warehouse applications.”
While doable, designing a speculative cold storage building to address the needs of both refrigerated storage and food processing can be a challenge as each application has its own requirements. Due to these complexities, many contractors are not qualified to build these facilities. So, it is extremely important to work with an experienced and qualified design build contractor that has the knowledge of the key components of a freezer/cooler facility to avoid risk and overspending.
U.S. cold storage construction was estimated at $2.3 billion in 2020
78% of US cold storage warehouses are at least 20 years old
5 million sq. ft. of cold storage is being built across the U.S.
More than 78% of cold storage buildings in the U.S. were built before 2000
Demand for cold storage will increase by 100 million sq. ft. in the next five years.