Advanced expertise required to execute complex cold storage warehouses

Code storage insights

• More cold storage warehouses are needed to meet the needs of online ordering.
• Updates in refrigeration technologies have led to cold storage facility design and construction updates.

Cold storage warehouse construction is on the rise. In 2022, 3.3 million square feet of speculative cold storage development was underway, up from 300,000 square feet in 2019, according to CBRE. This largely is due to an increase in online ordering, including groceries — a trend fueled by socially distanced online shopping during the COVID-19 pandemic that is now the norm. In fact, nearly 40% of respondents to CBRE’s 2022 U.S. Investors Intention Survey report plans to pursue cold storage this year, up from 22% in 2021 and 7% in 2019.

Building teams must understand the vast differences in cold storage warehouses compared to dry warehouses and other similar facilities. A cold storage warehouse costs three to four times more than a basic dry facility and typically takes longer to build because construction is more complicated and requires a rigorous preconstruction process.

Engaging the team early in preconstruction is imperative and the best project delivery methods for cold storage warehouses are contractor-led design-build or design-assist. For development of speculative facilities, the preconstruction team should create a decision tree based on a defined tenant or tenant type to ensure the project will meet market needs. Using a guaranteed maximum price contract allows construction to begin while engineering and design teams continue to work out the complicated project nuances that are specific to cold storage — a critical advantage to meeting tight deadlines for these complex projects.

Specialty refrigeration and critical utilities can result in cold storage facilities cost three to four times more than regular dry facilities. Courtesy: Graycor

Evaluate site viability early

Constructing a state-of-the-art cold storage facility is only possible with the right building site. Location is key and must be close to where food is grown and/or harvested or near other manufacturing locations. The site needs access to interstates and potentially to railways, ports and waterways. A traffic assessment is necessary to determine whether the site can accommodate construction traffic and business-related traffic once the facility is in operation.

An assessment to determine site viability must be conducted in person early during preconstruction. Project stakeholders should evaluate the site’s grade and its ability to meet the structural requirements of cold storage loading. If an existing building is on the site, the team must review the condition of the floor slab and the building’s ability to accommodate modern vapor barriers.

For projects where the intention is to repurpose an existing facility, technology tools like laser scanning can help establish the site’s viability by examining the existing building structure, including the exact ceiling heights and their compatibility with planned system layouts. Laser scanning can identify potential clashes with design elements during preconstruction, before too many resources have been wasted if a significant clash is detected.

Project stakeholders should evaluate the site’s access to utilities and infrastructure early as well to evaluate whether they can support the high demand of refrigeration systems and power-generating equipment.

During preconstruction, determine whether the building can accommodate expansion or reconfiguration as needed by future tenants. Conduct an environmental assessment for air quality and other risks so surprises do not arise during construction that could make the site unviable.

It is also important to ensure the labor is available for construction and plant operation. Because constructing a cold storage facility is so complex, the area must have the labor necessary for multiple teams of skilled craft professionals. And that is no easy feat considering the construction industry is experiencing a skilled labor shortage due to many employees reaching retirement age and a lack of young people entering the industry.

Planning for plant operations, make sure an appropriate workforce is expected to be available. If the area is newly zoned for facilities like cold storage, there may not be a local workforce available immediately.

When choosing a cold storage facility site, location is key. Proximity to interstates or other transport, accessibility, site grade and more must be determined during site selection and preconstruction. Courtesy: Graycor

Plan for unique characteristics of cold storage

Today’s innovative cold storage facilities often are designed vertically, which requires a smaller overall footprint and results in more options for site selection. Developers also increasingly are considering microfulfillment centers as small as 10,000 square feet to be closer to consumers. Often, these are found in existing urban properties that can meet demand for tight product turnaround.

For example, some major retailers are considering moving fulfillment into vacant anchor stores located in malls to be close to consumers and decrease delivery times.

Because developers cannot build out in most urban and suburban areas, increasing the building’s footprint, they’re building up. These tall buildings often use automated storage and retrieval systems (AS/RS) designed to operate in vertical spaces. While evaluating AS/RS, it is essential to consider the factors that help drive the level of automation within a building.

In addition to labor costs, inventory turnover and SKU variety, other factors to consider may include, but may not be limited to, performance (design throughput versus actual) and proforma duration (reasonable expectation of improved performance over time). A pragmatic evaluation of these factors may prove to be a prudent approach in selecting the degree of automation within a facility.

A tightly insulated building envelope, typically using sandwich panels with insulating cores or spray foam insulation, is one of the most important factors in cold storage warehouses. The required R-values must be considered in the building design and are dependent on the type of material being stored. In rack-supported distribution facilities — which are entirely automated facilities that use an independent storage rack system to serve the AS/RS — temperature stratification can occur due to the outdoor air temperature and distance from the cooling source. The temperature range of areas that surround the refrigerated area, including whether storage is close to indoor equipment that generate heat as well as the outdoor temperate, may increase the need for insulation too. It is important to calculate and design for these temperature variances early.

Complicated temperature control systems are required to ensure adequate control in various areas of the facility. Facilities likely will require multiple temperature zones to accommodate different types of food, including frozen meals and fresh produce. To keep the building envelope tight, loading docks may need shelters or seals, insulated doors or dock levelers that can be store inside the facility.

Specialty heating equipment often is required as well. Some facilities require areas with temperatures -20°F, which can cause the soil underneath the building to freeze and result in frost heave. Underfloor heating systems that are forced air, electric or pumped fluid can be used to maintain soil temperatures. However, the refrigeration and heating requirements will cause strain on utilities and operating expenses and must be considered in the preconstruction phase.

Cold storage facilities that are rack-supported require a different design and execution than dry warehouses. The rack system forms the structure of the facility and is stronger than conventional steel frames. Walls and roofs act as a “skin” covering the rack system after construction. Rack-supported buildings are more cost efficient than other facilities, need shorter material lead times and allow construction to be completed more quickly. They also require no internal columns, opening valuable floor space. A lack of columns coupled with jointless floors can help automated equipment run more smoothly and efficiently.

Rack-supported cold storage warehouses are eligible for low-oxygen fire safety solutions (also known as hypoxic systems) — an important advantage because low humidity levels leave cold storage facilities vulnerable to fire risk. Low-oxygen fire safety solutions reduce the conditions necessary for combustion to prevent fire in unoccupied buildings. They also typically are cheaper than conventional fire safety solutions.

Sophisticated temperature control systems are required to ensure the correct environment for storing foods of various types, ranging from frozen food to fresh produce. Courtesy: Graycor

Innovation in refrigeration

Refrigeration is arguably the most important element to cold storage facilities and it is an industry that’s changing quickly. For example, liquid recirculation systems and hydrofluorocarbons, known by most as HFC, are being phased out in favor of more environmentally friendly alternatives like low-charge ammonia-based systems, carbon dioxide refrigerants and hydrofluoroolefins aka HFO.

The type of refrigeration needed must be determined early in the preconstruction stage. Refrigeration needs to satisfy product-specific requirements, which vary by the types of items being handled and the length of storage. The logistics of moving items from one level of refrigeration to another, which would be the case in ripening fruit, for example, must be considered as well.

Refrigeration equipment often is manufactured and assembled off-site and comes in many capacities with various mounting configurations that fit into a wide range of spaces. Refrigeration must be installed as the building is erected to accommodate space restraints and the limited access that will be available in the finished building, especially in vertical cold storage warehouses.

Meet rising demand

Demand for cold storage warehouses and innovation in the design, equipment and systems used in the facilities is only expected to increase. In fact, CBRE found e-commerce for U.S. grocery sales is expected to rise to 21.5% by 2025, up from 13% in 2021.

As building teams begin preparation for new or retrofitted facilities, engaging the team early to address these unique factors before construction begins will lead to an innovative, high-quality facility that is delivered on schedule and within budget. Executing a plant smoothly is a competitive advantage in a highly compeitive market.

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