U.S. Cold Storage Vacancy Hits 20 Year High as Record Deliveries Outpace Shrinking Food Spending

Record warehouse deliveries and shrinking food budgets have pushed cold storage vacancy to 7 percent, forcing a major recalibration in industrial real estate.

By: AXL Media

Published: Mar 28, 2026, 8:35 AM EDT

Source: Information for this report was sourced from Bisnow

A Record Supply Wave Meets a Cooling Consumer Market

The specialized cold storage sector is grappling with its highest vacancy rate in at least twenty years, a sharp reversal for a niche that was once a pandemic era darling. Data from Newmark reveals that nearly 7 percent of temperature controlled facilities sat empty at the close of 2025, a figure that has more than doubled over the last five years. This downturn is attributed to a record breaking 10 million square feet of new deliveries entering the market just as persistent inflation began to erode consumer purchasing power for food and groceries.

Inflationary Pressures and the Shift in Grocery Logistics

While grocery prices have climbed roughly 30 percent above 2019 levels, actual spending adjusted for inflation has remained nearly stagnant, growing by only 1 percent in that same period. According to Newmark analysts, this disconnect has forced food distributors and retailers to adopt more precise, leaner inventory strategies across the entire supply chain. As companies move away from the "just in case" stockpiling seen during the pandemic, the demand for expansive cold storage footprints has softened significantly, contributing to the current glut of available space.

The Vulnerability of Post Pandemic Speculative Operators

The rapid expansion of the sector attracted a wave of new market entrants, with the number of cold storage companies jumping from 1,500 in 2020 to roughly 1,800 by the end of last year. David Saoud, co-founder of FreezPak Logistics, suggested that many of these newer operators may soon face consolidation or exit as market conditions tighten. The struggle is most visible in facilities completed between 2020 and 2025, which saw vacancy rates hit 10.1 percent, compared to the much tighter 3 percent vacancy seen in modern assets built during the previous decade.