PHOENIX, ARIZ. – CBRE arranged the sale of a 128,929-square-foot cold-storage and distribution center occupied by Sprouts Farmers Market. Cooper Fratt and John Werstler with CBRE in Phoenix represented the seller, ONE Properties. The buyer was a fund sponsored by CBRE Global Investors.
Located at 5445 W. Missouri Ave. in Glendale, Ariz., the free-standing property is a highly-specialized cold-storage facility featuring both refrigeration and freezer space, excellent truck maneuverability, heavy trailer parking and functional loading. The facility, which serves approximately 80 grocery stores in Arizona, New Mexico, Colorado and Texas, is nearby to the US 60, Interstate 10 and the Loop 101 freeway.
“The property is well-located and leased to a leading grocer, Sprouts Farmers Market,” said CBRE’s Fratt. “CBRE Global Investors saw an opportunity to purchase an asset class underserved in the Phoenix market. With a recent state-of-the-art expansion completed by ONE Properties, the facility should serve Sprouts’ cold-storage distribution needs for years to come.”
The growth of online grocery sales has the U.S. market for cold-storage warehouses poised for strong growth, potentially creating demand for up to 100 million sq. ft. of cold-storage space over the next five years, according to a new report from CBRE.
That forecast stems from a projection by the Food Marketing Institute and Nielsen that groceries ordered online will account for 13% of total grocery sales by 2022, up from 3 percent in 2018. Such growth would amount to an additional $100 billion in annual grocery sales conducted online. Click here to view an interactive map of consumers’ likelihood to buy groceries online across the U.S.
“CBRE Global Investors has been specifically targeting cold storage as a subtype, so we are excited to expand our holdings in the sector with the addition of this asset to our portfolio,” said Kim Hourihan, Portfolio Manager, CBRE Global Investors.
Currently, the metro Phoenix cold-storage footprint is approximately 9 million square feet and the vacancy rate remains low at 2 percent, according to CBRE Research.
“With a vacancy rate near 2 percent, the cold-storage market is over 400 basis points lower than the overall market vacancy rate. Given the growth projections of grocery shopping online, cold storage will continue to be underserved in metro Phoenix unless new product is developed to keep up with demand,” said Fratt.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.