How Industrial Outdoor Storage and Cold Storage Have Become Institutionalized—The South Florida Story (Part I)

Over the past several years, industrial outdoor storage (IOS) and industrial cold storage have undergone rapid institutionalization, transforming them from niche, mom-and-pop operations into core components of institutional investor portfolios. This shift is particularly evident in Miami and the broader South Florida region, where economic fundamentals, supply chain reconfiguration, and investor appetite have converged to make these assets increasingly valuable, scarce, and sophisticated.

Scarcity of industrial outdoor storage (IOS) drives up the premium.

What’s Driving Institutional Investment?

The industrial outdoor storage sector and cold storage were once overlooked segments of the real estate market, largely managed by regional operators and local families. Now, these property types are catching the eye of institutional investors for several reasons:

·       Last Mile & Supply Chain Needs: The e-commerce boom, evolving food supply chains, and onshoring of manufacturing have made logistics flexibility paramount. IOS offers staging, storage, and fleet parking solutions, while cold storage facilities serve a crucial link in food and pharma delivery.

·       Scarcity of Zoned Land: Cities like Miami and the counties of South Florida offer limited industrially-zoned acreage, often with tight zoning restrictions. This scarcity drives up the premium for any land or facilities that can accommodate logistics, outdoor storage, or temperature-controlled warehousing. 

·       Demand Outpacing Supply: Cold storage demand has consistently outstripped supply, with national vacancy rates for cold storage (4.4% in Q1 2024) notably lower than for general industrial product. In Miami, despite an increase in available warehouse inventory, refrigerated and cold storage spaces remain limited. 

·       Changing Consumer Patterns: A surge in home grocery delivery, greater demand for fresh and frozen foods, and the critical need for pharmaceuticals have kept cold storage in high demand. 

Despite an increase in available warehouse inventory, refrigerated and cold storage spaces remain limited.

Who Are the Largest Institutional Players?

Several major institutional investors have made sizable moves nationwide and in South Florida:

·       Realterm: A major logistics and IOS investor, recently closed a $25 million acquisition for an 8.4-acre property in Pompano Beach. Their strategic focus includes sites with anchor tenants like United Rentals, and they’ve expanded aggressively across South Florida over the last few years. 

·       Triarch Capital Group, IG Logistics, and other institutional capital groups are pursuing IOS assets in Broward and Miami-Dade counties, valuing these sites for their logistics flexibility and risk-adjusted returns.

·       Private Equity, REITs, and Fund Managers: Nationally, heavyweights like Americold Realty Trust, Lineage Logistics, Westmount Realty Capital, Saxum, RL Cold, BGO, and Cold Summit dominate cold storage facility development, either through organic rollout or aggressive acquisition. 

·       Pension and Insurance Capital: As cold storage is increasingly seen as infrastructure, pension funds and insurance-backed investors are showing up in capital stacks, bringing more institutional stability to the sector. 

Transaction volumes in IOS have increased roughly 28% year-over-year since 2022.

Impact on Demand and Cost of Industrial Outdoor Storage

Institutional capital flows have had several notable effects:

1. Pricing and Valuations Rising

·       Industrial property sale prices now average $273/SF in Miami, $250/SF in Broward, and $203/SF in Palm Beach, with IOS sites commanding significant premiums. 

·       IOS sites often deliver higher yields versus traditional industrial properties (often 150–200 basis points higher cap rates), attracting even more capital and competition. 

2. Deal Volume and Competition

·       Transaction volumes in IOS have increased roughly 28% year-over-year since 2022, as more investors chase limited supply. 

·       Institutional buyers are more likely to pursue large portfolios across multiple geographies, bringing new liquidity and economies of scale.

3. Scarcity and Premiums in Cold Storage

·       Cold storage construction is expensive—costs can be four times higher per square foot than conventional warehouses. This has kept speculative development disciplined but has also made any available facility hotly contested. 

·       The vast majority of cold storage occupiers are end-users (food manufacturing, pharma, etc.), meaning demand is tightly linked to essential supply chains and less prone to economic fluctuation. 

4. Modernization and Product Evolution

·       Institutional ownership brings modernization: higher ceilings, automation, energy-efficient refrigeration, and AI-powered warehouse management are becoming standard.

·       Targeted development is shifting toward smaller, city-adjacent, build-to-suit cold storage rather than large speculative builds, aimed at enhancing last-mile efficiency. 

Limited developable land amplifies the value of existing IOS and cold storage sites.

The South Florida Perspective

Miami and South Florida stand out for several reasons:

·       Geographic Advantage: Proximity to ports (PortMiami, Port Everglades), airports, and massive population centers makes South Florida a prime hub for both IOS and cold storage.

·       Resilience Despite Headwinds: Even as warehouse leasing activity slowed in Q1 2025, cold storage and outdoor storage sites with buildings and service facilities remain highly sought after. Owners can still command strong pricing, though increased inventory and economic uncertainty are moderating upward growth trends. 

·       Land Constraints and Urban Pressure: Limited developable land amplifies the value of existing IOS and cold storage sites, especially well-located ones. This scarcity ensures premium pricing and consistent demand, regardless of broader real estate cycles. 

The Bottom Line

Industrial outdoor storage and cold storage are no longer peripheral real estate types—they are critical infrastructure for the modern supply chain and have become core holdings for many of the world’s largest institutional investors. In Miami and South Florida, where logistics, geography, and land scarcity intersect, they represent some of the most in-demand, premium, and transformative real estate assets on the market.

This institutionalization brings heightened competition, modernization, and higher costs, but also deeper liquidity and more resilience, ensuring Miami’s cold storage and IOS sector will remain a hot spot for years to come.

The Industrial Team at ComReal has extensive experience in Rail Served warehouses in Miami and all South Florida. The team has successfully helped users and investors in the leasing and sales of these facilities. Contact the team for current availability of rail served warehouses and the status of this market.