Cold Storage Hits Oversupply As Demand Cools 🧊

Vacancy Rises and Rent Growth Flattens in Key Hubs

Author

Anne Morgan
October 08, 2025

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Hello, Commercial Real Estate Pros! 🏢

Cold storage vacancies have reached a 20-year high as new supply surpasses demand. Nearly 7.4 million square feet is set to come online while food inventories and rising costs slow absorption.

Older facilities face the most strain as tenants favor modern, purpose-built spaces. Analysts expect the imbalance to peak in 2025, with stabilization as development slows and demand catches up.

📰 Upcoming in this issue

  • 🥶 Cold Storage Faces Oversupply as Demand Cools

  • 🧪 Will AI Disrupt Life Science Real Estate

  • 🤖 Brokers Must Rethink AI, Says UWM Tech Chief

🥶 Cold Storage Faces Oversupply as Demand Cools

Developers introduced a wave of temperature-controlled spaces to the market just as e-grocery growth began to cool. Landlords are shifting from pushing rents higher to defending occupancy.

Key Takeaways:

  • 🏗️ Supply Outpaces Demand: New facilities are arriving faster than tenants can absorb them, extending lease-up timelines and straining projections.

  • 📉 Rent Growth Moderates: Concessions and more extended free-rent periods replace the rapid increases seen during the pandemic.

  • 🧊 Tenant Caution: Grocers, 3PLs, and food brands are delaying expansions, focusing on maximizing current space before signing new deals.

  • 🧭 Market Rebalancing: Developers are scaling back pipelines, prioritizing core distribution hubs and build-to-suit projects over speculative builds.

🧪 Will AI Disrupt Life Science Real Estate

JLL’s 2025 outlook highlights that tech-driven biotechs are leasing significantly less lab space, contributing to increased vacancy growth. Excess supply may linger for years as demand shifts.

Key Takeaways:

  • 📏 Smaller Footprints: Tech-enabled biotechs lease roughly one-third less space per employee compared with traditional peers.

  • 🧊 Vacancy Swells: Approximately 61 million square feet of lab space remains vacant, while demand has decreased by more than half.

  • ⏳ Slow Recovery: Equilibrium requires 30 million square feet to be absorbed or taken off the market, a process that could take three to seven years.

  • 🌏 Global Shifts: Partnerships with Chinese firms are prompting U.S. biotechs to adopt higher office-to-lab ratios, thereby reducing the need for wet labs.

🤖 Brokers Must Rethink AI, Says UWM Tech Chief

“Technology won’t replace brokers, but brokers who embrace it will replace those who don’t.” Tools like voice assistants can now contact hundreds of past clients in minutes.

Key Takeaways:

  • 🧠 Second-Brain Approach: Treat tech as a partner that gathers data and options, freeing brokers to focus on client relationships.

  • 🛠️ Workflow Integration: Use automation to verify documents, parse income, and filter products, improving speed without removing the broker’s role.

  • ⚡ Practical Tools: Systems like LEO analyze loan estimates, while assistants like Mia manage outreach and hand off hot leads instantly.

  • 🔄 Process Evolution: Beyond partial automation, build repeatable workflows and private models so brokers remain in control while benefiting from scale.

Why It Matters

Oversupply will pressure rents and leasing times in the near term, especially for outdated assets. Long-term drivers, such as e-grocery adoption, industry consolidation, and stricter food safety rules, are expected to support renewed growth once today’s pipeline clears.

Catch you in the next issue,

Anne Morgan
Editor-in-Chief
Commercial Real Estate Weekly

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