Cold Storage Facility Planning: How to Decide Whether to Renovate or Build New

When evaluating the decision to renovate an existing building for a cold storage facility or opt for new construction, several factors are critical to ensure the success of the project. Understanding the nuances of site selection, building conditions, lease terms and early partnership engagement can impact the timeline, budget and operational efficiency of your cold storage facility. Here’s a breakdown of key considerations to guide your decision-making process: 

1. Site Context: Choosing the Right Location 

For businesses that need a quicker solution than a full build-to-suit project, repurposing an existing building may seem like an attractive option. However, it’s crucial to assess whether the site can accommodate the specific operational requirements of a cold storage facility. Key considerations include: 

• Jurisdictional requirements: Different areas may have varying regulations or zoning laws that affect cold storage operations. 

• Truck routes and railyards: Ensure that the site has appropriate access for heavy-duty trucks and rail transport if needed for your supply chain. 

• Traffic flow: Proper traffic management within and around the site is essential for smooth operations. 

• Security: Sites may present operational challenges due to security measures, such as truck turnaround restrictions, dock position limitations and logistical fencing issues. 

Partnering with a design-build expert familiar with these factors is essential to ensure the site meets operational needs and provides long-term business success.  

2. Landlord & Lease Conditions: Understanding the Fine Print 

Before moving forward with any renovations, thoroughly review the lease terms. Modifying an existing building often involves a detailed examination of lease clauses to avoid unforeseen costs or disputes. Some important things to look out for include: 

• Restoration clauses: Some leases may require tenants to return the property to its original condition, which can be costly if extensive modifications are made. 

• Tenant improvement allowances: Negotiate these terms to ensure they cover necessary cold storage enhancements. 

An experienced real estate team can help you navigate these conditions, ensuring that lease agreements are favorable and don’t create barriers to your project. 

3. Existing Building Conditions: Assessing Infrastructure Needs 

While speculative industrial buildings offer flexibility, they often come with generic infrastructure that may not meet the unique needs of a cold storage facility. Here’s what to consider: 

• Utility infrastructure: Conduct a thorough evaluation of the existing electrical, plumbing and HVAC systems to determine if they can support the specialized requirements of cold storage operations. 

• Structural integrity: Cold storage facilities often require additional structural reinforcements, such as a stronger roof for heavy equipment or additional floor thicknesses for insulation, glycol loops, mud slabs and new concrete slabs. These adjustments can take considerable time and resources. 

Understanding these challenges early in the process can help avoid costly delays and ensure that the facility will meet your operational needs. 

4. Early Partnership Engagement: Building a Collaborative Team 

Successfully executing a cold storage project requires collaboration with experienced partners who understand the unique demands of the cold storage industry. Early engagement with the right partners can lead to a more streamlined project delivery. Key partners may include: 

• Procurement specialists: Sourcing quality materials at competitive prices is crucial to keeping the project on budget and on schedule. 

• Utility providers: Early conversations with local utilities can help identify power requirements and ensure the necessary infrastructure is in place to support cold storage operations. 

• City planning departments: Working with local authorities on phased permitting options can facilitate early occupancy, allowing portions of the building to be operational before the final project turnover. 

By bringing these partners on board early, you can ensure a smoother, faster and more cost-effective process. 

Deciding between renovating an existing building or opting for a build-to-suit cold storage facility requires careful consideration of several factors, including site suitability, lease conditions, building infrastructure and early engagement with industry partners. A well-thought-out approach to these considerations can result in a more efficient project, optimized for your business needs. Working with an experienced team that understands the complexities of cold storage development is key to ensuring long-term success. 

For more information or to discuss your next cold storage project, contact our team today. We specialize in helping businesses navigate the complexities of commercial real estate, delivering industrial solutions that align with your operational goals.